China's War on Standards: Fighting IP Imperialism All the Way
Asia Times Online has a great article on the state of Chinese standards initiatives. This is in light of the expected release of licensed home-grown third generation (3G) services that will be available in mid-July. 3G technology, also known as TD-SCDMA, will compete with Western W-CDMA and CDMA-2000.
This new technology follows China's push with their 11th Year Plan in developing their own innovations in standards from DVD's, codecs, to PC's (Godsen II Dragon Dreams).
The article explains why home-grown TD-SCDMA is a source of pride for China. Here are some points they made:
- First-Mover Advantage: companies that are the first to develop the standards for a product have the greatest chance to dominate the industry for long-term; China wants to be the first-movers for the Chinese.
- Experience Curve: first-movers have ability to offer products at a lower price relative to their competitors; China would like to be ahead of the curve
- Western developed products impose a high royalty intellectual property payment to use their standards, so it is in China's interest to keep the products at a lower price - therefore develop their own standards.
- China's standards are incompatible with with Western developed standards/products, but international companies cannot ignore China's large market because of standards incompatibility
- Western companies are worried that China will one day set the international standards and applications, because that means Western companies may have to pay Chinese companies IP royalty fees to use their standards
- Home-grown standards is also a way for Chinese companies to adjust to WTO reforms of foreign companies.
- Intellectual property, not material property, is the key to global economic leadership
- We are witnessing China moving from low-end to high-end tech development
Here's a great graph from Asia Times that shows the status of Chinese Standards Initiative (I copied and pasted the info an Excel file.)
Technorati Tags: 11th year plan, beijing, CDMA-2000, china, chinese, chip, development, economic, experience curve, first mover advantage, global, home grown, innovation, intellectual property, internet, IP, license, product, standard, TD-SCDMA, technology, W-CDMA, western