avzombie.com

With the threat of cheap Chinese-made HD DVD players now very much a reality, the Blu-ray Disc Association confirms that it has begun to talk with Chinese vendors about licensing BD technology. To that end, the BDA has formally begun evaluation of AVS (Advanced Video System) and DRA (Digital Rise Audio), both Chinese specific codecs, for inclusion into any Blu-ray product platforms made and sold in China.
The inclusion of regionalized video and audio codecs is mandatory, and represents the Chinese government’s policy of IP parity with the US, Europe and Japan.
In reality, the BDA is now faced with no alternative but to license Blu-ray to Chinese vendors. Failiure to do so would be to effectively lose the region entirely to its rival.