China, with its massive population, is a very interesting market for computer companies. Only 25% of China's population has access to the internet, so it's a massive growth market. The Chinese themselves realised this too, and in order to not be dependant on foreign powers, they decided to develop their own processor.
This would become the Loongson, currently in its second generation. The third generation, which will sport 4 cores and later 8 cores, will be released in 2010. Where it gets really interesting, however, is when you look at the software these Loongson chips are running. Since it's a MIPS chip, it can't run Windows
In other words, one of the biggest growth markets in the computing world might be conquered not by Intel and AMD's x86 running Windows, but by a 64bits MIPS chip running open source operating systems like Linux and the BSDs. The key here, as Wired notes, is that Loongson-based devices will be much cheaper for Chinese buyers than Western x86 machines.
Of course, the Loongson chip still has a long way to go before it can compete performance wise with Western products, but progress is being made, and China is determined. "The country is incredibly motivated for the project to succeed - it has become a cornerstone of the National High-Tech R&D Program embarked upon in 1986," Wired writes, "And we know that the Chinese are very good at leveraging economies of scale."
Combine all this with the fact that the third generation Loongson chip will include specific instructions to speed up x86-to-MIPS dynamic binary translation, and you can see that the Chinese are really taking this seriously.
Which is good news for all of us. x86 Needs competition.