Op-Ed Contributors

Respect differences in standardization

By Dieter Ernst (China Daily)
Updated: 2010-11-24 07:56

China's approach to innovation and standardization hardly played a role in international economic diplomacy until a few years ago. With China's economic power on the rise, that assessment has changed dramatically. Today, Beijing's innovation policy and its perceived threat to Washington's innovation and competitiveness are a hot topic in US-China economic relations, adding to contentious disputes over exchange rates, trade and foreign direct investment. The role of standardization, together with intellectual property rights and government procurement, are at the center of this conflict.

An important objective of the standards project of Honolulu-based East West Center's National Bureau of Asian Research is to improve the understanding, in the US and China both, of the role standardization plays in the other country's innovation system, and to contribute to constructive solutions to this conflict. Significant differences exist across countries and industries in the organization and governance of standardization processes.

Since the US and China have fundamental differences in their levels of development and in their economic institutions, they pursue quite different approaches to standards and innovation policy. The consensus in the US is that market forces and the private sector should play a primary role in innovation and standardization. China, on the other hand, relies more on the government to define the strategic objectives and key parameters.

In the US, there is widespread expectation that further reform of China's standards system will "naturally" converge to (almost) full compliance with a US-style market-led voluntary standards system. That expectation can be found, for instance, in American National Standards Institute's "United States Standards Strategy". The strategy document proposes the "universal application of the globally accepted principles for development of global standards", which are based on the US voluntary standards system.

Yet, as this report documents in detail, China's evolving standards system provides little evidence that convergence to the US system is likely to materialize. When Chinese reformers argue for a transition to a more market-driven standards system, they emphasize that the government will continue to play an important role as a promoter, enabler and coordinator of an integrated standards and innovation policy.

China's primary concern is to develop this vast quasi-continental country as rapidly as possible, and to catch up with the productivity and income levels of the US, the European Union and Japan. Strengthening China's domestic innovative capacity is considered the key to a sustainable transformation of its economy beyond the export-oriented "global factory" model. To achieve this goal, China's government is very serious in its aspiration to move from being a mere standard-taker to become a co-shaper, and in some areas a lead shaper of international standards.

But China's indigenous innovation policy and its entry into the global standards game as a new contender has raised concerns in the US that this may erode American leadership and hasten the decline of the US economy. The US government considers China's innovation policy to be "discriminatory", implying that this policy is used as a trade-distorting ploy to challenge American supremacy in the global knowledge economy. A recent report by the US Chamber of Commerce alleges that China's innovation policy is "a blueprint for technology theft on a scale the world has never seen before".