China plans virtual world for commerce

Lai acknowledged that Chinese manufacturers can't efficiently crank out just one custom-ordered shirt. But they can wait until numerous people and clothing shops around the world submit similar orders, then assemble 5,000 of the same blue, pinstriped button-down shirt and ship it within a day or two, he said.

Lai said the CRD could eventually become a bigger version of eBay Inc., which connects buyers and sellers worldwide online in both auction and fixed-price formats. EBay is now also creating social networks where registered users can discuss everything from shoes to Barbies.

Just-in-time manufacturing is expected to generate the largest amount of revenue for the CRD, but the network also will host cultural exchanges, corporate meetings, educational classes and other events common in virtual worlds.

Registration will be free, Lai said. Users will buy virtual items with credit cards or micropayments in dozens of currencies.

Software by MindArk
The CRD will be based on technology from Sweden's MindArk, maker of the "Entropia Universe" virtual world.

Entropia built virtual "islands" from company templates. CRD's e-commerce transactions will go through Paynova, Sweden's equivalent of PayPal, and Germany's CryTek will provide some of the graphics.

Everything in the CRD will live on servers in Beijing maintained by government programmers. The government has dictated that there will be no pornography or online gambling on the CRD, which it is touting as a public-private partnership.

China's communist regime promotes Internet use but filters out material it considers subversive. In the weeks leading up to the Communist Party Congress, which convenes Monday, authorities have been deleting blogs about the death penalty or human rights, for example.

Lai said the government would take a "hands-off" approach to taxing companies or individuals that do business through the CRD, however.

Christian Renaud, chief architect of Networked Virtual Environments at Cisco Systems Inc., said Westerners would likely have an "immediate allergic reaction" to the CRD because it is state-owned.

But a centrally controlled site could have unique advantages over World of Warcraft, Second Life, There.com, Kaneva and dozens of other Western virtual worlds, which appeal to different users and don't interact with each other.

"The beauty of it is they can create uniformity," Renaud said. "In the United States, if you tried to get all the virtual worlds together, you'd still have Senate meetings on it 15 years from now."

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