TechWeb suggests that China’s biggest search engine, Baidu, is developing its own Android-based Mobile OS called Qiushi, which will be released by year-end with hopes of dominating the Chinese market by going super local.

While it reinforces the rumor of Baidu’s search-focused light operating system for mobile devices that was revealed a couple of months back, the company continues to deny it by referring to Qiushi as a mobile ad product.

“Mobile internet is an important component of our future strategies. Baidu is hoping to play a key role in the mobile internet field, partnering with operators, content producers, mobile vendors and software developers to push forward the industry development,” said Baidu VP Ren Xuyang.

Creating its own mobile OS would definitely support this vision by seamlessly integrating the different mobile services of Baidu, including its mobile  input method, service aggregator, maps, browser and search.

This does not exactly bode well for Apple as China has always been dependent on homegrown, local Internet sites and services.