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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (3818)	12/7/2004 7:16:38 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Non-market oriented revolution of standards in China Last Updated(Beijing Time):2004-12-02 16:21 Chinese enterprises and the government are setting off a costly and controversial revolution of standards now. After TD-SCDMA became a Chinese standard, industries involving Linux, digital cameras, IGRS (Intelligent Grouping and Resources Sharing), IPv6, AVS, RFID and hi-fi disc players have formulated their Chinese standards one after another under the leadership of the Ministry of Information Industry of China or relevant departments. However, the rapid development of China's standards aroused the vigilance of transnational companies and developed countries that have "mature standards" and advanced conflict and confrontation unavoidably. There also appeared two opinions in the industries on the strategy of formulating Chinese standards. One of the opinions is for "going all out and developing quickly", hoping China formulate standards as soon as possible and make its voice heard and play an important role in the international standard system; the other opinion is for "awaiting opportunity", believing China can follow foreign "standards' first and wait for the opportunity to make itself heard because its technical level is limited and is not capable of formulating technical standards. But the grant of the patent on the standard of DVD almost strangled China's DVD industry. The implementation of WAPI was postponed indefinitely, the selection of the technical standard of 3G is not clear and the prospect of standard for EVD is blurred. All these real cases constitute a basis for saying "China is still not capable of formulating technical standards". Experts believe that standards should be a technical alliance in form and should be formulated and improved by enterprises together. But in China, the past formulation of standards was largely guided by the government and reflecting its intention in the end. The immediate result was many standards could not be used by industries after being worked out and had to be put aside for a long time instead of helping enterprises form a core competitive force. A vicious cycle was formed eventually. Besides, in foreign countries most enterprise giants that have the advantage of possessing key technologies usually participate in the formulation of standards together, and from the beginning of the job, they take into comprehensive consideration on all the links related to the industry chain such as the standard text, intellectual property right and platform technology. The funds expended are usually enormous. But China has limited funds for this and such work often cannot be carried out thoroughly. By now, there are no enough precedents that Chinese enterprises have formulated standards and carried out them in the world successfully. It is just because of this that the current strategy of the Chinese government for developing standards is also should be reviewed again carefully. In the past, China always thought foreign enterprises controlled industry chains and held their rivals by formulating standards, but it was found after careful study that they don't make profits by standards but through confirming their advantageous market positions in technical standards by patents. They also created many skills for applying for patents, which built "high walls that cannot be surmounted or pushed down" for following countries and enterprises. We can get some elicitation from the development history of the Huawei Technologies Co., Ltd.: It didn't introduce or formulate standards itself, but it has many patents, thus it can make profits and win competition without its own standards. That's why Cisco could not get the upper hand of it in the end even after it took the latter to the court when Huawei entered the US market. Moreover, China also encountered another problem: Even if Chinese enterprises acquired independent intellectual property rights in a few fields, they are easy to be copied by other companies for lack of effective protection in the domestic market and reasonable profits is hard to get from the market. In the view of the big direction, so-called standards and patents are both components of the rules of the game of market economy while the role that the government should play is to safeguard the fairness of the rules of market economy and it is unacceptable to put the cart before the horse. Source:CE.cn en.ce.cn