On The Horizon: Joining WTO Means Playing By Global Rules - InformationWeek
Business & Finance
06:22 PM
Bradford Brown
Bradford Brown
Building Security for the IoT
Nov 09, 2017
In this webcast, experts discuss the most effective approaches to securing Internet-enabled system ...Read More>>

On The Horizon: Joining WTO Means Playing By Global Rules

China is trying to use its market size to leverage control of wireless.

If China participated in the international standards-setting process relating to the wireless sector, it could sell more of its wireless products globally. It also could buy more wireless products from its trading partners at competitive prices.

Technology products can't be developed, manufactured, and refined without broadly accepted technical standards. As a result, manufacturers most often seek broad industry consensus on those standards. In the wireless arena, IEEE 802.11 is essentially a global standard. More than 1,000 products have supported this standard since 1999, and many wireless networks in homes and businesses use products based on it, according to the Wi-Fi Alliance.

China, however, has its own idea when it comes to wireless. As noted in the "2002 China Science and Technology Indicators," published by the Scientific and Technical Documents Publishing House in Beijing, China has "deployed and implemented a technical-standards strategy" that aims "to break up [the] technical-standards monopoly imposed by developed countries in international trade."

That may be one reason China has created a wireless LAN encryption standard that's incompatible with the 802.11 and the 802.11i security standards used in most wireless products. China is trying to use the size of its market and a proprietary standard to leverage control of the wireless sector. To that end, it appears that China is requiring foreign companies that want to manufacture WLAN products in the country or export them there to partner with Chinese companies designated by the government as production partners.

To put this in perspective, IDC says that 26% of U.S. exports to China are high-tech goods. In 2002, that reached $125 billion. That's a lot of PDAs and laptops.

There are many reasons this is the wrong move for China. Products based on a proprietary standard won't be attractive in a global marketplace. A proprietary standard will drive development costs of existing products up as companies try to adapt them to the Chinese standard. It's inefficient for everyone but Chinese companies. The Chinese will lose and so will everyone else in the wireless space.

The Chinese lobbied hard to be part of the World Trade Organization, yet many feared they weren't interested in a level playing field but just wanted more trade leverage and global credibility. The Bush administration, in a letter to His Excellency Zeng Peiyan, the vice premier of the People's Republic of China, that was signed by Secretary of State Colin Powell, Commerce Secretary Don Evans, and U.S Trade Representative Robert Zoellick, recently reminded the Chinese of their WTO commitments.

If China wants to be part of the international standards process, it should work with the IEEE in an open setting, arguing it out like everyone else. Instead, it has walled itself off and created a wireless standard for its own market.

China has entered the WTO, but culturally it still doesn't embrace free trade. The rest of the world hopes it will.

Bradford C. Brown is chairman of the National Center for Technology and Law at the George Mason University School of Law. Reach him at bbrown2@gmu.edu. (Any opinions expressed in this article are solely those of the author and do not necessarily represent those of the George Mason University School of Law.)

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll