The subsidized rollout follows incentives offered by digital broadcasters in the UK, Taiwan and other markets as they attempt to develop new audiences for their services.
60 new stations
China's TV regulator approved 40 digital pay-TV channels last year, Wang said. Sixty more will be approved in the next two weeks, she said. The loans will be made through China Development Bank.
State-owned China Central Television, which has 15 channels, began operating six digital pay-TV channels last week. Many local Chinese TV stations also are getting into the new technology.
"Digital TV needs pay television and pay television needs digital television," said Sun Yusheng, president of CCTV's digital TV unit.
DVN, which has 46 percent of the set-box market in China now, is working with Qingdao Cable Co. in eastern China to develop a platform for value-added services, including games and entertainment, real-time information for stocks and other data.
"The concept is to create a new business model, with value-added services," said Terry Lui, DVN chief executive.
The Chinese government last year announced that Qingdao is the key city for the digital conversion. The government also picked 48 other cities for conversion.
e-government platform
Digital TV is priority for the Chinese government because it offers officials the opportunity to implement a direct information channel, or so-called e-government.
The government chose digital TV as an e-government platform rather than the Internet because China's personal computer penetration rate is so low. Only 7 percent of Chinese households have personal computers, while 100 percent have TV sets.
"In some communities, there is even household TV ratio of 1.5, which means some households have two TV sets or more," said Wang. "This is why we picked digital TV as a direct channel between government and the people, rather than the Internet."
Two-thirds of China's population lives in rural, sometimes remote, areas that don't have access to cable and will have to receive digital TV from satellite dishes or digital broadcasts by local TV stations.
"This will take a massive effort as the nation is so huge and the number of households so many," Wang said. Helping farmers pay for expensive digital TV sets is the only solution, she said.
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