China’s growing efforts to standardize domestically and actively participate in international standard setting have been widely observed. Domestically, China revised its standardization law in 2017, the first since the law was enacted in 1989. In fact, a standardized reform has been in place since 2014.
On the international level, from 2011 to 2020, the number of secretaries by China working in the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) has increased. 73 percent and 67 percent, corresponding. In addition, Chinese citizens have been elected as the leaders of ISO, IEC and the International Telecommunication Union (ITU), the three largest and oldest standards-setting organizations in the world. Zhao Xiaogang served as head of ISO from 2015 to 2017, Zhao Houlin was the ITU secretary-general from 2015, and Shu Yinbiao started his three-year term as president of IEC in 2020.
China also does not regret making efforts to internationalize its standards outside of these international organizations. For example, since September 2019, the country has signed standard cooperation agreements with 52 countries or regions through the Belt and Road Initiative.
As a latecomer in the field of technology governance, China’s growing activism has caused much anxiety in Western countries, the dominant founders and players in the existing system. Scholars and commentators have come to a consensus that China will change the current global technological governance order, but different in of them explain of an upcoming change. Some argued that this was due to the new norms and philosophies that China discussed, while others argued that Chinese motives and approaches were used in the standards are fundamentally different from those of the West.
Are these explanations valid? Are China’s standards, philosophies, dynamics and approaches to standards setting really different from those in the West?
Intellectual Property Rights (IPR) are tied to setting technical standards. Although China has made great strides in protecting intellectual property rights in recent decades, some critics argue that its standards for embedded essential IP are different from those of standard in the West. Instead of making a profit through embedded monetization and IP licensing, China is accused of using unique domestic standards to force foreign embedded essential IP holders to lower royalties and increase rates profits for domestic producers. This reason needs to be studied more.
First, the Chinese government’s role in disseminating standards may be overstated. Although there are unique domestic standards in China, only a few of them are widely commercialized for both political and economic reasons. Politically, the Chinese government system is called “dispersed authoritarianism”. Domestic standards set by different ministries are sometimes inconsistent and therefore difficult to follow. Economically, since so many Chinese companies are export oriented, they tend to adopt internationally recognized standards rather than domestic ones. Therefore, for these two reasons, the competitiveness or utility of any single domestic standard remains questionable, let alone comparing them to widely accepted global standards. .
Second, Chinese business actors are increasingly, albeit slow, upholding the role of patent licensing. This shows that large Chinese companies have been working to adhere to existing standards, regardless of the strategy the central government pursues. In March this year, Huawei released White Paper on Innovation and Intellectual Property 2020. Between 2019 and 2021, the company estimates that it will receive between $ 1.2 billion and $ 1.3 billion in revenue from patent licensing. More importantly, the Chinese giant 5G has also announced a licensing fee structure for 5G smartphones, with a license limit per unit of $ 2.50. After Huawei revealed its decision, many wondered if ZTE, another leading 5G telecom company in China, would follow the trend of monetizing its 5G patents.
China has been accused of using the standard setting as a means of protection, disrupting international trade. Indeed, the Chinese government has been using standardization as part of industrial policy – protecting primitive industries and promoting indigenous innovation. In addition, the unique domestic standard has posed barriers for some international companies to enter the Chinese market. However, the use of standard setting as an exclusion strategy is not unique to China. Rather, it has been used by Western countries for a long time. In the 1980s, for example, the EU announced its own regional standard for high-definition television (HDTV), known as the Multi-Channel Analog Component (MAC), which created barriers to entry for Japanese company. More notably, WTO’s Technical Barriers to Trade (TBT) Agreement continues to point out that technical standards are a longstanding and frequently used tool in countries around the world.
Last but not least, China’s approach to standards setting is also cause for concern. China is adopting a top-down and centralized approach while the United States is adopting a top-down, market-oriented, and bottom-up approach. Besides that, some concerned China’s policy towards multilateral governance rather than a multi-stakeholder model (loop in civil society and business) in the international arena.
To be sure, the Chinese, domestic and international standard setting methods are different from those of the United States. The rising power, however, shares some features with the EU. The EU has been using it market-oriented public-private partnerships paradigm. Although technical standards are developed by private standardization bodies, such as the Deutsches Institut für Normung (DIN) in Germany, they can also become part of the regulations made by countries. EU member and European Commission launched. In some cases, the institutions of the EU as well as the governments of the member states are important for the successful application of the standards, as is the case in GSM.
In China, although the standard setting was led by state actors or semi-state actors, they could no longer dictate the process. Parties in the private sector have strengthened their presence in technology governance. For example, Scott Kennedy note that although the Science and Technology Department of the Ministry of Information Industry was previously responsible for Smart Resource Grouping and Sharing (IGRS), government officials rarely attend public group meetings. IGRS. More importantly, Kennedy also pointed out that the contrasting fate of wireless local area networks and home networks is largely determined by the behavior of business actors rather than governments.
A more recent example of 5G is another illustration of the growing presence of private organizations. Both private domestic companies, such as Huawei and foreign companies, such as Nokia and Ericsson, have been recognized as key contributors to the 14 5G standards announced last January. . With that in mind, criticism of China’s multilateral tendencies is also not convincing. As industry becomes more and more important in setting and disseminating standards, the Chinese government will seek to cooperate and incorporate businesses into the governance structure. It is true that China has long promoted multilateralism; however, that does not mean that China is against the multi-stakeholder structure.
As a newbie, China is sure to bring changes to the global governance of the setting of international standards. However, more research needs to be done to determine how “new” these changes are and to the extent to which China has been socialized into the existing world order.