Sounds like Microsoft is trying to become a big player in China’s living rooms with their investment last week in Sichuan Changhong Electric Co. Ltd., one of China’s largest TV makers. The USD $12.3 million investment ensures that Changhong will develop TVs and other products that can hook up to the Internet.

The deal is about Microsoft’s software, not hardware:

Current versions of Windows are capable of connecting a TV with the Internet, and these types of systems are already available in China.

Changhong’s own M10 Living Room Entertainment Center is an example. Based on Windows XP Media Center Edition, the M10 is designed to connect with a television and comes with a remote control and wireless keyboard, allowing users to access music, videos and the Internet from a couch instead of a desk.

I think Microsoft is simply trying to make some new friends in the emerging Chinese marketplace. If the Changhong deal goes well, it’ll definitely give a boost to both Windows Media Center and the recently announced Mediaroom too.

Microsoft also signed an agreement with Shanghai Media Group (SMG) last week. Financial terms were not disclosed, but SMG agreed to “use Microsoft products across its new-media division, which includes Internet video, IPTV and mobile television.”

I expect we’ll hear more from Microsoft in China very soon!