The kit, which will be made available to Chinese manufacturers in the fourth quarter, bundles hardware, software, debugging and testing tools and includes a DVD player drive made by Japans Sanyo Technosound, the firm said in Beijing.

In September, Thakral's plant in Shanghai will begin manufacturing the kits, which will enable Chinese OEM's and other makers to sell the DVD players for a retail price of less than 2,000 yuan ($240), they said.

The new DVD technology offers higher video and audio quality than the video compact disc (VCD) format it is expected to replace, but the new players will play VCD 2.0 discs.

``Chinese manufacturers have been looking for a way to convert to DVD not only to boost their margins but because implementing a global standard will enable them to develop an exportmarket'' Alain Bismuth, LSI Logics director of consumer DVD products said in a statement.

VCD technology is widely used in China, where players cost as little as around $120 and are ubiquitous in urban homes, cafes and bars and on long-distance buses. Nearly 20 million VCD players are expected to be sold in China in 1998, industry sources say.

Many of the movie titles available in China, both foreign and domestic, are pirated and sell for as little as $1.20.

China's rampant piracy is a source of friction with its trade partners, but consumers have no other way to see most of the latest Hollywood titles because of strict state controls on the distribution of foreign films and outright bans of some titles.

Thakral, which distributes consumer electronic products in China, would release some 300 titles of home entertainment software in DVD format this year, managing director Inderbethal Singh Thakral said in a statement.

Also on Wednesday, the Silicon Valley-based LSI Logic launched a design facility inBeijing to enable Chinese manufacturers of digital home entertainment products to integrate the firms specialised semiconductors in DVD'S, satellite television set-top boxes and digital cameras, LSI Logic said.