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With the progress of globalization, current product design in manufacturing enterprises demand distributed, heterogeneous, and real-time supporting environment; however, most of manufacturing enterprises in China, especially those small and medium enterprises, can not afford to buy the expensive software, hardware and service for the special purpose. Collaborative design is the most important task of all activities at the product development lifecycle under Networked Manufacturing (NM) and Application Service Provider (ASP) oriented system is an effective approach to NM platforms. In this paper, combined industrial requirements with our efforts in some research projects funded by the Hi-Tech R&D Program of China and Beijing Municipal Sci-Tech Program, an ASP-oriented distributed collaborative design system namely Co-Design is proposed to support remote collaboration among enterprises in a pervasive computing environment. Architecture of the system is presented and some key techniques of collaborative design are researched. Now the proposed Co-Design system has been implemented and used as ASP tools to help several small and medium enterprises to accelerate their product development and typical application examples shows that substantial benefits can be achieved by reducing of collaboration expenditure, development cost and shortening time to market.