This is an interesting piece that's come out of the WSJ recently. According to their sources, HTC is working with the Chinese government to create a new Operating System. People familiar with the matter have told the journal that HTC's Chairwoman, Cher Wang is closely monitoring the project and that the Chinese government is heavily involved as well. Apparently, the OS will be for Chinese consumption first and foremost, as oppose to Android and Windows Phone that is very Western in nature. Tight integration with Chinese services like Weibo, and presumably Baidu is reported, too.
HTC is looking to make a dent in the Chinese market, and in Asia in general. Recently, we've seen the company take the East much more seriously. With releases like the Butterfly and then the Butterfly S, along with quality mid-range devices, it's clear that HTC are betting big on China. Now that they're creating a new OS for the market, it could mean that HTC is ready to face facts and realize that the Eastern market might be their best hope of success.
There's no telling whether or not the "new" OS is being built from the ground-up or if it's simply a fork of Android. However, with Android being open source, there's a possibility that a fork of Android might end up being completely different to any other version of Android we've seen before. If it were just another fork of Android that's better equipped to handle the Chinese language, it'd be a strange move for HTC. After all, they've been working with Google's Android for some time now that a more Chinese version of it wouldn't be out of the realms of all possibility.
All of this is very interesting but, right now there's very little to go on. This news raises more questions than anything. One of the big questions that we're asking ourselves right now is just what would happen to HTC and Google's relationship if the Taiwanese manufacturer were to make their own OS to target one of the largest markets in the world? Things turned a little sour between Google and Acer when they partnered with Alibaba to launch devices running their own OS. Hopefully, some more information will come out of this soon.