AVS stands for Audio Video Standard. It's development was initiated by the People's Republic of China and its patents are 90% owned by Chinese companies. It is competing with H.264 / AAC to replace MPEG-2 video. AVS is a compression codec for both audio and video formats, and files containing AVS content carry the .avs extension (not to be confused with AviSynth scripts which carry the same extension).
Success of the AVS format would reduce the royalty and licensing costs for Chinese companies and cement the firms recognition among the industry.
AVS video decoders are already available from the OpenAVS project and the libavcodec library, and such, it is supported by a number of players including MPlayer, VLC Media Player and others. The CBHD (China Blue High-Definition) disc format will use the Audio Video Standard for its content.