China reportedly plans to annul its licensing requirement imposed since February 2005 on the manufacture and sale of handsets in China – a move which technically will allow all handset vendors to produce and sell handsets in China, according to sources at Taiwan handset makers.

More than 40 handset makers and vendors, including BenQ, Inventec Appliances, Mitac International and Dopod International of Taiwan, have received a license to sell handsets in China since the enforcement of the regulation, the sources noted.

The liberalization will allow other Taiwan vendors, including Asustek Computer, E-Ten Information Systems and Gigabyte Communications, which have previously failed to secure a license, to make inroads into the China handset market, the sources asserted.

The sources indicated that competition in the China handset market may heat up as the liberalization will also legalize the sales of white-brand handsets in China.

The current liberalization, however, may apply just to only 2G GSM models and China may resort to other regulations to control the sales of 3G handsets, including WCDMA, CDMA 1xEVDO and TD-SCDMA models, according to the sources.