Google's Chinese store for its mobile operating system - the most popular globally - only offers free apps.

BBC: A Chinese girl uses a mobile phone

Baidu, the ten-year-old leading Chinese search engine firm, is developing a new mobile operating system, like Android or Windows, the Chinese media reports.

FORBES: Baidu's Answer to Android And The Mobile Market

China is working with software firm Canonical on an open-source operating system customised for Chinese users.

BBC: China to create home-grown operating system

Phones using the Google Android operating system lead the Chinese market, with Samsung brands in the pole position.

FORBES: Competition Getting Tougher In China For Apple iPhones

Ultimately, a China-domestic smart phone operating system (with Chinese-made apps) plus a domestic mobile search engine will be the best strategic 3G smart phone combination for MII.

FORBES: Baidu's Answer to Android And The Mobile Market

In December, China issued what is known as a technical barrier to trade notification to the World Trade Organization that detailed a proposed law requiring handset makers ensure preloaded apps and operating-system updates are in accordance with Chinese laws before the phones are sold in China.

WSJ: China Criticizes Android's Dominance

Android operating system, including many of the most popular Chinese social-media and gaming applications, a spokesman for the company said.

WSJ: Amazon Adds China Apps Store

And this is exactly what Alibaba just did by launching Aliyun, a mobile operating system based on Android and tailored for the Chinese market.

FORBES: How Alibaba And Mozilla Are Trying To Break Google And Apple Duopoly On Smartphone

One way to accomplish this goal is to work with Alibaba, the Chinese search, social networking, and eCommerce company, which has its own smartphone operating system, Aliyun.

FORBES: Google Can't Have It Both Ways