SHANGHAI -- In what is sure to send cold chills through those who bring back dozens of black-market DVDs from trips to China,  the nation has announced plans to develop its own next-generation DVD standard to break the monopoly of foreign companies and avoid paying heavy licensing fees. Two formats are in the running for future consumers: HD DVD and and Blu-ray.

HD DVD is supported by such companies as Toshiba, Intel and Microsoft, and Universal Studios; Blu-ray is supported by Dell, Hewlett Packard, Sony, Apple and Paramount Studios.

The Xinhua News Agency, the official news agency of China, said the new standard will be based on but incompatible with HD DVD. It is not expected to hit the market until at least 2008.

Reports suggest 80% of DVD players are made in China. However, the makers pay stiff licensing fees -- around 40% of the cost of each player.

China has tried this before. The country developed its own DVD standard -- "EVD," for enhanced versatile disc -- in 1999. Last year, protoype EVD players hit the market but consumers haven't jumped on. There was no indication whether the new Chinese standard -- the name of which Xinhua did not disclose -- is based on EVD.