Audio Video Standard, or AVS, is a compression codec for digital audio and video, and is competing with H.264/AAC to potentially replace MPEG-2. Chinese companies own 90% of AVS patents.  The audio and video files have an .avs extension as a container format.
Development of AVS was initiated by the government of the People's Republic of China. Commercial success of the AVS standard would not only reduce China's royalty/licensing payments to foreign companies, it would presumably earn China's electronics industry recognition among the more established industries of the developed world, where China is still seen as an outlet for mass production with limited indigenous design capability.
In January 2005, the AVS workgroup submitted their draft report to the Information Industry Department (IID). On March 30, 2005, the first trial by the IID approved the video portion of the draft standard for a public showing time.
The dominant audio/video compression codecs, MPEG and VCEG, enjoy widespread use in consumer digital media devices, such as DVD players. Their usage requires Chinese manufacturers to pay substantial royalty fees to the mostly-foreign companies that hold patents on technology in those standards. For example, as of 2006, licenses ranging from $2.50 to $4 already make up about ten percent of the cost for a contract-manufactured DVD player unit.
According to the state-run media, a key consideration of AVS was to reduce foreign dependence on core intellectual properties used in digital media technology. Proposed as a national standard in 2004, AVS had a targeted royalty of 1 RMB (or about $0.10 USD) per player. On 30 April 2005, AVS standard video officially passed the public show and became the national standard.
AVS is currently expected to be approved for the Chinese high-definition successor to the Enhanced Versatile Disc.
Open source implementations of an AVS video decoder can be found in the OpenAVS project and within the libavcodec library. The latter is integrated in some free video players like MPlayer, VLC or xine. xAVS is also an open source AVS encoder with a working decoder.
In September 2007 DVD-forum appointed a new standard for High definition media expressly meant for the Chinese market, the so-called CH-DVD. As the name suggests, this standard follows in the steps of HD DVD, being based on much of the same technology, but using a different form of data modulation and encryption for writing the date onto the disc. It also adds official support for AVS in addition to the audio and video codecs already supported by HD DVD. It's unknown at this point whether CH-DVD players will include HD DVD support, but current HD DVD players won't be able to play CH-DVDs as they don't support these differences.
^ AVS official web site
^ Taiwan joins Chinese effort on proprietary DVD format
 External links
AVS sample clips 【經濟日報╱記者陳信榮】
2008.05.22 02:48 am
AVS（Audio Video coding Standard）為中國大陸自行研發、擁有專利權的最新數位影音視頻編碼標準。