This article originally appeared in the newsletter of the American National Standards Institute.

Standards are critical in technological development, helping to ensure product functionality, interoperability, and safety. The Chinese government also recognizes standards as an important component for international industrial competitiveness and has made it a priority to become more influential in the bodies that set international standards. China is doubling down with policies aimed at this goal and, at the same time, its participation in international standards-setting organizations (SSOs) has increased dramatically in recent years. For example, Chinese-led technical committees or subcommittees in the International Organization for Standardization (ISO), one of the largest international standards-setting organizations (SSOs), increased 75 percent from 2011 to 2019.

Q: Why is it important for US companies that China is an active participant in international standards-setting?

China is both the largest producer of goods exported across the world and a huge market for imported goods and international investment. As a result, Chinese input is crucial for ensuring product compatibility. Chinese participation in international standards-setting also has some indirect positive effects on China’s domestic standards environment. China’s increased buy-in to international standards-setting is likely one of the reasons that China has adopted more international standards domestically, which reduces market access barriers for foreign companies. Increased Chinese experience in international standards-setting could also have a positive influence on better aligning Chinese domestic SSOs with WTO principles for standards-setting like openness, transparency, impartiality, and consensus. Additionally, Chinese participation in technical discussions in international SSOs may help Chinese experts better understand the concerns of foreign companies that at times might not be able to fully participate in domestic standards-setting in China.

 

Q: Why is it concerning to US companies, then, that China is taking a more active role?

Despite the many positive aspects of increased Chinese participation, it has also raised concerns among US companies. One set of concerns has to do with the potential for Chinese participants to introduce weaknesses with due process, openness, impartiality, and transparency, which are common to the Chinese standards system into international SSOs. Additionally, financial incentives that compensate Chinese companies for standards contributions incentivize quantity over quality. Large numbers of low-quality proposals gum up international standards-setting and take time and resources away from evaluating technically sound proposals. While most companies are generally satisfied with how the international standards-setting system functions currently, anecdotes about the Chinese government pressuring Chinese companies to vote as a bloc in international SSOs or Chinese companies flooding technical committees with proposals have fueled these concerns, even though such behavior does not necessarily constitute a trend.

Another concern is how Chinese standards-setting activities interface with broader industrial policies. Industrial policies like Made in China 2025 that can distort markets and provide unfair government support for Chinese companies have already created concern. Government-driven efforts to bolster these policies by providing Chinese companies advantages in standards setting will only further intensify such concerns. While companies from all countries participate in standards-setting to gain a competitive advantage, the level of government involvement and policy support in China is unique, especially when juxtaposed with countries like the United States where standardization activities are grassroots-driven and industry-led.

 

Q: What are the implications of China’s efforts to export its standards to other countries?

In addition to participating in SSOs, China has policies aimed at promoting Chinese standards abroad through overseas construction contracts and equipment exports to help Chinese products and services “go global,” especially to developing countries that often lack the resources to develop their own standards.

Despite China’s efforts, there are currently few examples of countries opting for Chinese standards over international ones. Other countries have little incentive to unilaterally adopt Chinese standards unless they have Chinese products in their market to which they can apply these standards. However, in the long term, there is concern that such policies could lead to the creation of separate technological spheres of influence.

Posted by Jack Kamensky