CSR 2019: Setting a New Standard: Implications of China’s Emerging Standardization Strategy

By Michael Sutherland

Introduction

On November 4, 2017, the Standing Committee of the 12th National People’s Congress formally adopted the first major revision to China’s Standardization Law, almost thirty years after China’s original Standardization Law was adopted in 1989.[i] Standardization reform has been a major priority for the Chinese government since the 18th National Party Congress in 2012, and the 2017 revision to China’s Standardization Law is the culmination of a five-year process that began when the State Council published “The Deepening Standardization Reform Scheme” in 2012. According to remarks made by Premier Li Keqiang, this campaign was a direct result of the Party recognizing that “standardization is a reflection of a country’s core competitiveness and overall strength.”[ii]

Prior to the 2017 Standardization Law, the development of Chinese standards was largely centralized, with the majority of standards-setting power vested in the Standardization Administration of China (SAC). The Chinese government has recognized that its standardization regime had to change as China’s economy became more globally integrated. The new law allows industries to band together and create voluntary enterprise standards which can then be transformed into national standards in cooperation with SAC, enhancing the role of the market in China’s standardization process.[iii] At the same time, leaders in the Chinese Communist Party (CCP) and Chinese industry groups see the opportunities inherent in China becoming a global standards leader and have an interest in controlling the broader direction of China’s standards development.[iv]  

This paper seeks to evaluate China’s recent efforts to promote Chinese standards globally and to assess the potential implications China’s emerging standardization strategy may hold for the role of standards in international trade. Following a discussion of existing frameworks commonly applied to standards development in China, this paper builds a new framework designed to evaluate China’s standards development strategy in the context of its broader economic objectives. This framework characterizes China’s standards development strategy as a new type of comprehensive “standards push” involving three key elements: the integration of standards development and China’s broader industrial policy goals, China’s increased participation in the making of international standards, and China’s efforts to link Chinese standards to the Belt and Road Initiative (BRI). This standards push framework is then used to assess the implications of China’s standardization reform for standards enforcement in the WTO and international standards development efforts in organizations such as the International Standards Organization (ISO).

Ultimately, this paper finds that framing China’s standardization reform as part of a broader comprehensive standards push is a useful but limited approach for researching China’s standardization reform and evaluating its potential implications for the role of standards in the global trading system. Using this framework, this paper assesses that, as long as it remains an integral component of China’s broader industrial policy, standardization reform in China is likely to pose a significant challenge to the norms governing the role of standards in international trade.

Existing Frameworks for Explaining China’s Standardization Strategy

Standardization is an often overlooked element of the global economic system that is nonetheless essential for its function. As countries make new breakthroughs in fields such as information and communications technology (ICT), pharmaceuticals, and manufacturing, widely adopted international standards can ensure that products and services resulting from these breakthroughs can be easily traded and used across borders. The most successful international standards are so widely adopted that they are taken as given by most consumers, such as the Universal Serial Bus (USB) in computing, or the YYYY-MM-DD standard for communicating dates and times.[v] The popular consensus in international economics literature is that companies able to set standards enjoy a first-mover advantage when developing any derivative technology that conforms to that standard. In addition to this first-mover advantage, standardization facilitates the production of new goods by more unskilled labor, granting yet another first-mover advantage to companies that develop technical standards.[vi] Standards setters also typically receive rents (most commonly in the form of royalties) for the rights to adopt the standards they set. Even ISO, the leading international organization governing standards development, charges companies a nominal fee for the right to use standards developed by its technical committees, which are produced (at least nominally) “to be applied in the development of international regulation.”[vii]

This first-mover incentive to develop new standards is not just limited to companies operating in innovative industries; this framework applies at the country level as well. Earlier work by contemporary experts on China’s standards development, such as that of Dieter Ernst or Scott Kennedy, focuses on how countries work to promote standards that are favorable to the major players in their domestic industries, a process that often favors more developed economies such as the United States and Germany.[viii] Ernst in particular outlines the challenges faced by developing countries as they seek to catch up in the realm of standards development. Focusing primarily on Asian economies, Ernst argues that latecomers must deal with a series of tradeoffs when deciding how to formulate future industrial policy in the face of well-established technical standards.[ix] Of particular significance to China’s situation is the tradeoff Ernst identifies between timely access to advanced technologies and the ability to develop those technologies indigenously – operating within the bounds of established foreign technical standards enables faster development at the expense of continued technological dependence and vulnerability to rents generated by de factoindustry standards. China’s approach to this dilemma has been to take what Ernst calls a “two-track approach” – incorporating Chinese technology into global standards in order to strengthen its bargaining power and reduce its payments of high royalty fees, while at the same time promoting its own new international standards in an effort to change the international standards system over time.[x] China’s ultimate ambition is to transform its domestic industries into “standards makers” instead of “standards takers.”

In China’s case, the struggle for dominance in the realm of technical standards occurs among existing “standards coalitions” as Scott Kennedy calls them – various industry groups and government organizations that band together in order to promote the adoption of their own domestically conceived standards.[xi] Writing in 2006, Kennedy argued that standards coalitions in China were too weak to compete with foreign companies in the ICT sector, and Chinese efforts to promote an alternative standard for wireless internet connections, known as WAPI, ultimately lost out to foreign coalitions advocating Chinese adoption of the more widely used Wi-Fi standard.[xii] Kennedy’s assessment of Chinese standards coalitions at the time was highly accurate: their slow and centralized nature combined with a lack of international “lobbying” experience left them at a disadvantage when facing the more experienced U.S. companies that constituted the opposing standards coalition. However, despite their relative inability to advance the WAPI standard, Chinese standards coalitions continued to pursue its adoption at the international level. Chinese representatives submitted WAPI to ISO for recognition as an international standard four years later in 2010, and while ISO ultimately rejected it, the case China made in 2010 was much more sophisticated and had broader international support than the case they made in 2006, indicating the progress Chinese standards coalitions were capable of making within four years.[xiii] Chinese standards coalitions have since become an even stronger force on the international stage as a result of two complementary strategies: increasing participation in international standards-setting bodies such as ISO and the International Electrotechnical Commission (IEC), and developing education initiatives and incentive programs designed to create a new generation of Chinese standardization experts.

At the international level, Chinese efforts to become more involved in standardization range from the mundane to the cutting edge. On one hand, it seems that Chinese experts are contributing to every international standardization technical committee in which they can be involved. Right after the new Standardization Law was passed, the China National Institute of Standardization (CNIS), one of several government bodies involved in standardization, featured a story on its web page featuring Chinese participation in an ISO meeting on safety signs. CNIS praised its experts who “submitted recommendations on safety signage including ‘Caution: Falling into Water’ and ‘Beware: Jellyfish.’”[xiv]  On the other hand, Chinese experts are also participating in standards development groups in highly technical industries at a much higher rate. In March 2018, Chinese lawmakers began a national standards-setting process for new energy vehicle charging apparatuses, and the Ministry of Industry and Information Technology (MIIT) published a white paper on the standardization of blockchain technology.[xv],[xvi] In 2013, CNIS began developing Master’s degree programs in technology standardization with the goal of increasing the ability of Chinese contributors to promote China’s interests in international standards-setting bodies like ISO.[xvii]

Both the China-as-latecomer framework and the standards coalition framework are useful for evaluating China’s standards development today. When discussing China’s standards development push, Chinese policymakers and academics frequently cite a desire to regain a measure of control over China’s massive domestic technology market. In 2007, a leading official responsible for China’s technology policy claimed that “China’s market is one of the largest in the world, but the market is controlled by foreign companies, and the situation is extremely grave as we are further pressured by developed countries who use blockades and technology controls.”[xviii] This sentiment is echoed across other national level economic planning documents, with a phrase loosely translated as “first-mover advantage” (先发优势, xianfa youshi) appearing in several State Council directives dealing with standardization.[xix] Regarding standards coalitions, the 2017 Standardization Law codifies a process of public-private cooperation that has long characterized the Chinese standards development process. The law calls upon the SAC to “encourage enterprises, social organizations, educational institutions, research institutes, and other organizations to participate in international standardization activities.”[xx] The law also focuses on developing an infrastructure to strengthen standards makers at every level of commerce and government, stating:

People’s governments at or above the county level shall support pilot and demonstration projects and publicity work concerning standardization, disseminate standardization concepts, spread standardization experiences, promote the use of standardization methods throughout society for organizing production, business, management and services, and make the most of the supporting role of standards for encouraging industrial transformation and upgrading and driving innovation.[xxi]

Taken together with programs like the CNIS Master’s program in technical standards, the law seems especially concerned with strengthening China’s standards coalitions at every level by directing SAC to foster a culture of standards development within industry and enterprise associations. The push to strengthen standards coalitions in China is seeing strong results: In a 2013 research report for the U.S.-China Economic and Security Review Commission, Dan Breznitz and Michael Murphree claim that Chinese standards experts “now have a much better understanding of the specific wording of international agreements about standards, to include what practices are allowed, when, and how.”[xxii] In their report, Breznitz and Murphree posit that the Chinese “may now have an advantage over the U.S. (and U.S. firms) in international and domestic standards bodies because of their understanding of the law and the system that governs it.”[xxiii] In most standardization disputes, the winning side is most often the one that understands the system in which they operate.[xxiv]  

Standards and Indigenous Innovation

Meanwhile, the domestic push for the development of new standards has been linked to China’s push for indigenous innovation in advanced manufacturing and information technology, as exemplified by initiatives such as Made in China 2025. In concert with the 13th Five-Year Plan (2016-2020), Made in China 2025 seeks to transform China’s economy into a “quality driven economy” that is less reliant on foreign technology imports and is able to export its own technically advanced products by 2025.[xxv] In order to achieve this goal, the State Council has begun providing financial support to priority industries, funding foreign technology acquisitions, and positioning state-owned enterprises (SOEs) to become “global champions” in each named industry sector.[xxvi] Standards are an essential component of China’s push to create global champions; a saying that has become popular recently among Chinese scholars of innovation is “third-tier companies make products, second-tier companies make technology, and first-tier companies make standards (三流企业做产品, sanliu qiye zuochanpin; 二流企业做技术, sanliu qiye zuo jishu; 一流企业做标准, yiliu qiye zuo bioazhun).”[xxvii]

The standardization reform proposed so far in conjunction with the Made in China 2025 initiative has provoked concern in China’s major Western trading partners. In its 2017 report to Congress on China’s WTO compliance, the Office of the United States Trade Representative (USTR) describes that China’s “ongoing effort to develop unique national standards aims eventually to serve the interests of Chinese companies while simultaneously seeking to impede and disadvantage their foreign counterparts.”[xxviii] The American National Standards Institute (ANSI) and the United States Information Technology Office (USITO) submitted comments on China’s 2017 Standardization Law during its drafting process, pointing out that the law emphasized the “development and promotion of Chinese standards with no indication of intent to give preference to international standards.”[xxix] Concern about the potential market impacts of Chinese standardization reform has not been limited to the United States –  the Deutsches Institut für Normung (DIN), which cooperated with SAC in 2011 to form the German-Chinese Standardization Cooperation Commission, raised similar concerns, particularly about China’s perceived lack of deference to already established international standards during the drafting process of its 2017 Standardization Law.[xxx] In contrast to the adversarial approach that U.S. standards makers and the U.S. government have taken to China’s push for standards development, DIN has a longstanding cooperative relationship with Chinese standards organizations; this lends significance to the similarity between their comments about China’s Standardization Law and the comments made by ANSI, USITO, and the United States government.

Standards Push: Industrial Policy, ISO Participation, and the Belt and Road Initiative

An increased ability to compete in international standards bodies does not necessarily mean Chinese standards makers are going to promote unique Chinese standards solely for the sake of competing with American and European standards makers. Kennedy, Suttmeier, and Su in 2008 made a convincing case for the majority of new Chinese standards being non-controversial. Kennedy et. al found that the only controversial standards initiatives undertaken by China at that time were all in the ICT sector, with other standards being seen largely as China’s efforts to “catch up to the developed world.”[xxxi] However, much has changed in the ten years since this research was published. China has drastically increased its representation in international standards-setting bodies that lead in developing technical standards for developed countries. For example, in 2008, fewer than 100 Chinese experts participated in the standards-setting meetings of the International Electrotechnical Commission (IEC), the leading international standards-setting organization for all major ICT and electronics sectors.[xxxii]

In order to determine how China’s standardization strategy might evolve in the wake of these changes, this paper analyzes three elements of China’s standardization strategy and discusses their implications: the role of standards development in China’s industrial policy, the nature of China’s increased participation in ISO standards-setting, and China’s plans to integrate its standardization processes with the Belt and Road Initiative.  

Industrial Policy

In an attempt to clarify the role of standards development in China’s broader industrial policy, this paper focuses on analyzing specific State Council directives and planning documents connected to the 13th Five-Year Plan, which outlines the Party’s economic priorities from 2016 to 2020. This approach was chosen due to the lack of case studies available about China’s post-reform standardization processes, and because of the unique function of Five-Year Plans in China’s economy. China’s national standardization strategy is still emerging, and there are few viable ways of determining its role in specific sectors through case studies or other post factomethods of analysis. The 13th Five-Year Plan outlines incentives, funding schemes, and central government expectations of firms operating in priority sectors such as ICT, the automobile industry, and biopharmaceuticals. Furthermore, China’s Five-Year Plans influence economic behavior by directing funding to certain firms, provinces, and cities that contribute to meeting goals outlined in the national Five-Year Plan. The dual pressures of meeting the State Council’s expectations and acquiring access to central funding before their competitors drives most firms and local governments to adopt the State Council’s priorities as their own, which results in most Five-Year Plans broadly meeting their stated objectives.[xxxiii]

The 13th Five-Year Plan was first announced in 2016, but the policy ideas that constitute its foundation can be traced back to a State Council document published in 2006, The National Medium- and Long-Term Science and Technology Development Plan, which was styled as a 15-Year Plan outlining priorities for national technological development from 2006 to 2020. This 15-Year Plan established a new principle, “Indigenous Innovation” (自主创新,  zizhu chuangxin), which would become the guiding principle of standards development in the 13th Five-Year Plan, published ten years later.[xxxiv] Indigenous innovation as outlined in the 15-Year plan involves a dual-track strategy of encouraging Chinese firms to file more patents and propose more domestic and international standards. On both counts, the push for indigenous innovation appears to have been wildly successful; China’s State Intellectual Property Office (SIPO) is now the busiest in the world, with 928,177 applications received in 2014, 86.3 percent of which came from domestic applicants. In the U.S. Patent and Trademark Office, Chinese patent applications in ICT alone increased over 1,000 percent from 2008-2018.[xxxv]

Priority sectors outlined in Made in China 2025 are at the forefront of this push to indigenize, and several planning documents at the national, provincial, and local levels provide insight into how Chinese policymakers see indigenous innovation and standardization as complementary. In May 2015, the State Council published “Several Opinions on Accelerating the Cultivation of New Competitive Edges in Foreign Trade.”[xxxvi] Not only does the term “indigenous innovation” appear alongside “standards” nine times in the document, but it also outlines plans to “encourage the propagation of Chinese standards.”[xxxvii] Given the document’s explicitly stated purpose of “cultivating a competitive edge in foreign trade,” the motivation behind the proposed propagation of Chinese standards appears to be somewhat competitively driven.

This competitive drive is even more pronounced in the ICT sector. The “National Informationization Development Strategy,” published by the CPC Central Committee and the State Council in July 2016, not only contains several paired references of “indigenous innovation” and “standardization,” but these passages have also been flagged as “explicitly problematic” by several foreign companies.[xxxviii] One passage calls for standardization to be part of a “comprehensive multilevel protection scheme” for China’s ICT industry. While the plan is largely hortatory and aspirational in nature, with very few specific policy prescriptions, a recent report by the European Commission of the Director-General for Trade indicated that standards-setting is also appearing alongside calls for protecting new industries at the provincial level.[xxxix] For example, in Guangdong Province’s “Action Plan for the Year 2014-2015 on Building a Powerful Province With Quality,” a section titled “Strengthen Standardization Work” begins with, “we shall focus on areas of strategic emerging industries such as areas of high-end new electronic information […] and promote the establishment of advanced standards with indigenous intellectual property rights.”[xl] Apart from Guangdong’s provincial level plans, similar language can be found in ICT sector development plans in Zhejiang and Fujian, with the phrase “advanced standards with indigenous intellectual property rights” appearing even at the municipal level in plans specific to Shanghai, Ningbo, and Xiamen.[xli],[xlii]

Outside the ICT sector, standardization is connected to localization most often in plans related to the automobile industry. The “Energy-Saving and New-Energy Automotive Industry Development Plan (2012-2020),” published by the State Council, identifies “expediting the formation of technology, standards, and brands using indigenous intellectual property” as a “basic principle.”[xliii] Overall, the presence of this language across a broad spectrum of plans points heavily to a broader move toward localization, in which standards play a significant role.

ISO Participation

In conjunction with its efforts to use standards as a mechanism for reforming its domestic industrial policy, China is also pursuing an international leadership role in standards development through increased participation in ISO’s standards development process. ISO centers its standards development process on technical committees composed of industry experts from various countries. ISO publishes standards, but it does not autonomously create them; rather, ISO serves as a kind of arena in which different countries and standards coalitions lobby for their own domestically conceived standards.[xliv] Getting a standard ratified and promulgated by ISO is beneficial for countries and standards coalitions in two ways. First, it bestows the standards maker with the previously discussed first-mover advantage, as global producers overwhelmingly subscribe to ISO standards, particularly in high-tech industries like ICT. Second, ISO ratification carries an implicit recognition of the standards maker’s technical expertise, and signals that they have an influence on the market that operates on a level above that of pure market share. In China’s case, ISO standardization also signals to domestic Chinese consumers that the overall quality of Chinese goods is increasing, to the point that Chinese goods can be used as an international benchmark.[xlv]  

China was a participating member in 706 ISO technical committees in 2012. ISO’s most recent membership information lists China as a participating member in 730 technical committees, which is a significant increase. For reference, Germany, widely considered to be ISO’s most active Western member country, went from participating in 715 technical committees to 724 in the same time period.[xlvi] China’s increased representation in technical committees indicates that Chinese policymakers and industries see value in ISO participation. Chinese policymakers have recognized the advantages of ISO participation, and have not only increased their representation in ISO technical committees but now also have companies and experts chairing them. Huawei currently chairs an ISO Joint Technical Committee on AI Standardization (ISO/IEC JTC 1/SC 42).[xlvii] This particular committee includes premier U.S. ICT standardization organizations, including USITO and the National Institute of Standards and Technology (NIST). Buy-in from these organizations into Huwaei’s ISO committee is a significant indicator of China’s progress toward its goal of becoming a standards maker.

Apart from its participation in ISO standardization processes, China is also pursuing a broader leadership role in the organization. In September 2016, Beijing hosted the 39th ISO General Assembly, and the Chinese government was determined to display their enthusiasm for international standardization during the meeting while also outlining its vision for China’s future role in standards development. Zhang Xiaogang, a Chinese steel magnate, serving as ISO’s president during the Beijing General Assembly, used his remarks to point out that, despite its push to lead in international standardization, China “only led in 0.7 percent of international standards, and needs intensified participation in the formulation of international standards.”[xlviii]

During the meeting, China signed several agreements with the European Committee for Standardization, outlining a framework for mutual recognition of standards and “exchanges of personnel and information.”[xlix] Studies have shown China has a history of using multilateral organization meetings as a forum for signing separate bilateral agreements with other participants, often to support its own international objectives that are outside the parameters of, but broadly in line with, the spirit of the international organization convening the meeting.[l] China’s decision to sign a group of  bilateral standards agreements at the ISO meeting, discussed below, indicates that China is pursuing a parallel strategy of promoting its standards alongside increased participation in ISO.

Standards and the Belt and Road Initiative

During the 2016 ISO General Assembly in Beijing, China also signed bilateral standards agreements with nine other countries, including Albania, Russia, and Turkey. Chinese press reports regarding these bilateral standards agreements all emphasized their role in the BRI.[li] Apart from its various other roles in China’s international economic engagement strategy, the BRI is seen by Chinese policymakers as a premier opportunity to “export Chinese standards while upgrading Chinese industry” – language that echoes its domestic industrial policies.[lii] Alongside its publication of guidelines governing standardization, the State Council has also produced two standards development plans specifically related to the BRI, the Action Plan to Connect “One Belt, One Road” Through Standardization (2015-2017), and the Action Plan on Belt and Road Standard Connectivity (2018-2020).

While the 2018-2020 plan is more up to date on current events and accounts for political changes that have occurred in focus countries, the two plans are similar and provide insight into the parallel international standardization framework China is pursuing, apart from its involvement in ISO. Both plans exhort Chinese standards makers to facilitate the “going out” of Chinese standards and outline several strategies for accomplishing this goal. For example, the 2015­­-2017 plan calls for “conducting comparative analysis of standards in bulk import/export sectors across One Belt One Road countries,” and the subsequent promotion of Chinese standards if the countries in question have not already adopted ISO standards.[liii] The 2015-2017 plan also proposes tying BRI funding to the broader adoption of Chinese standards in countries hosting BRI projects, which may serve as a mechanism to entice these countries to adopt Chinese standards.[liv] The 2018-2020 plan goes even further, calling on Chinese standards experts to “establish a preliminary ‘standardization think tank’ to conduct research on the standardization laws, regulations, systems, and development strategies of BRI countries in order to push for early outcomes.”[lv]

Furthermore, the 2018-2020 plan offers some insight into how China plans to use BRI as a means to increase its influence in ISO. The plan proposes allocating funding for the establishment of “standardization centers” in BRI countries to “train local standards experts and support standardization capacity-building in BRI countries, so as to enhance Chinese standards’ influence overseas.”[lvi] In coordination with building the standardization capacity of BRI countries, a separate subsection of the plan proposes working with these countries to “push the ISO to establish new technical institutions in the fields which have significant impacts on the industries of the BRI.”[lvii] This seems to indicate that if the Belt and Road initiative moves forward according to plan, Chinese-led standardization efforts in ISO will receive the support of standards experts from other countries involved in BRI. Chinese standards will also likely become more prevalent as countries in Africa, Europe, and the Middle East are incentivized to adopt them if they choose to become more involved in BRI projects in the future.

Implications of China’s Standards Push for the International Trading System

The foundations of China’s emerging comprehensive standardization strategy have the potential to significantly affect the rules and norms governing the role of standards in international trade. It is outside the scope of this paper to predict the concrete effects that China’s standards push will have on international trade using trade data. Changes in imports and exports are notoriously difficult to attribute to standards empirically; the few studies that have managed to do so focus on the diffusion of a single standard across multiple countries and rely on relatively advanced econometrics techniques.[lviii] Additionally, there is currently little data available that would support an attempt to model the effect of standardization on China’s economic behavior, as China’s standards strategy is still emerging. However, there are still methods to qualitatively assess the potential implications of China’s standards push on the norms governing standards and international trade.

One method of evaluating these implications involves examining the drafting process of the 2017 Standardization Law and its reactivity to input from international standards makers. While international institutions such as ISO and IEC publish standards, they do not impose any legal obligations on their member countries that dictate how standards are used. Powerful international standards leaders including ANSI, The European Committee for Standardization (ECS), and DIN set de facto standards of best practice that most other standardization organizations generally follow, but they also have no enforcement power that can compel countries to adopt internationally accepted standards.[lix] That power effectively rests with the WTO. When SAC and the National People’s Congress began drafting the new Standardization Law, they solicited public comments from international standards makers and industry associations. ANSI, ECS, and DIN all submitted comments that shared one common point of concern – China’s draft Standardization Law contained no clause signifying intent to adhere to the WTO’s 1997 agreement on Technical Barriers to Trade (TBT), which is the closest approximation the world has to an enforceable global normative framework governing standardization.[lx]

The WTO TBT agreement stipulates that “where technical regulations are required and relevant international standards exist or their completion is imminent, members shall use them, or the relevant parts of them, as a basis for their technical regulations.”[lxi] Effectively, the TBT agreement requires WTO member countries to use internationally accepted standards or risk retaliatory action through the WTO’s arbitration apparatus. ISO, ANSI, and ECS all use the WTO TBT Agreement as a reference for how their standards are internationally applicable.[lxii]

During the drafting process, comments submitted by the US-China Business Council (USCBC) reveal that SAC scaled back the role of international standards while drafting the Standardization Law. According to USCBC, “the draft law deleted language promoting the adoption of international standards; the draft law also adds language placing conditions on the adoption of international standards.”[lxiii] Despite input from these influential standards and trade organizations calling on SAC to include language that supports the existing standards and trade governance, the final version of the Standardization Law only includes a single clause obligating standards makers in China to support  “the adoption of international standards in the Chinese context.”[lxiv] The only other language in the Standardization Law regarding international standardization activities calls for increased participation in international standardization activities, a priority that is reflected in China’s increased participation in ISO meetings and committees.[lxv]

Using the standards push framework proposed by this paper to evaluate SAC’s failure to integrate language supporting international standards (outside of a Chinese context) into the new Standardization Law has potential implications for international standardization and trade. The first potential implication is that China could indeed be preparing to use its growing list of unique national standards as technical barriers to trade to protect industries essential to its industrial policy. As foreign companies seek to enter China’s market, they may begin to face standardization measures that limit their ability to compete with domestic manufacturers. One area where this may already be occurring is the automobile industry. The recent Section 301 investigation conducted by USTR identifies several standardization measures in the automobile industry that increase local content requirements, require increased compliance testing for foreign cars entering the market, and push foreign auto manufacturers to turn over certain elements of their intellectual property during certification processes.[lxvi] The report also notes standards in cybersecurity and biopharmaceuticals that “drastically exceed the burden and scope of international standards.”[lxvii]

USTR’s finding that these standards are designed to advance China’s industrial policy goals are supported by the framework developed by this paper. Each of these areas is a priority sector linked to Made in China 2025, and as the documents analyzed in this paper establish, standardization is an essential part of advancing China’s overall industrial policy goals. As China continues to push for the adoption of its own unique standards, both domestically and internationally, particularly along the BRI, foreign companies looking to access China’s market or become involved in BRI projects are likely to face conformity with evolving Chinese standards as a barrier to entry.

The second and more far-reaching implication is that China is developing a network of standards designed to eventually supplant widely used international standards. Despite the Standardization Law’s encouragement of stakeholder participation in standardization activities, Western standards experts and industry associations appear to be increasingly shut out of technical committees (TCs) that make standards in China. The European Chamber of Commerce in China has noted that European and American businesses are afforded little to no opportunity to participate in Chinese standards-setting. The report notes that “foreign-invested enterprises are sometimes only granted observer status in TCs, or even excluded from membership altogether.”[lxviii] The report also points out that Chinese standards relating to data security and cloud computing do not align at all with international standards such as the EU’s proposed General Data Protection Regulation (GDPR).[lxix] If Chinese data protection standards and the GDPR end up competing, China’s growing standards expertise and support for Chinese standards in international projects like those involved in BRI could provide Chinese data protection standards with an advantage.

As China continues to prioritize participation in ISO, its efforts to minimize foreign stakeholder input in its own standardization processes, combined with its use of ISO meetings to sign separate bilateral standards agreements, could also be seen as an effort to increase its role in ISO at the expense of Western standards makers. This possibility is supported by China’s plans to invest in “standardization capacity building” in countries involved in the BRI, many of whom are also members of ISO.[lxx] Increasing the number of Chinese-trained standards makers in ISO, including those coming from BRI countries trained by Chinese standards experts, will also likely increase the influence of Chinese standards in international trade.

Suggestions for Future Research and Conclusion

China is likely to continue to increase its involvement in international standardization and propose its own unique standards in new areas and in areas where international standards are already widely adopted. Framing this behavior in the context of a broader standards push linked to Chinese industrial policy could help guide future research on China’s standards development. Currently, the utility of the standards push framework for evaluating China’s current standardization strategy in detail is relatively limited. However, it provides a useful starting point for evaluating future actions by China in the international standards-setting community. For example, if China continues to sign more bilateral standards cooperation agreements, this framework could prove useful for placing each bilateral agreement in the context of China’s broader standardization strategy. The standards push framework proposed by this paper will also be useful in measuring the progress China makes toward its standardization goals in the time between the current 13th Five-Year Plan and its future iterations.

Additionally, each of the three elements of the standards push framework proposed by this paper could be further explored. The tranche of Five-Year Plans, State Council directives, and guiding opinions analyzed in this paper are a small sample of hundreds of industrial policy documents. If other documents connected to China’s industrial policy and the 13th Five-Year Plan are analyzed for similar language, a data set could be built that allows for the identification of broader trends in China’s domestic standardization processes. Using this data set to track which provinces, municipalities, and industry sectors implement the largest number of new standardization measures could be useful for investigating the role of standards in China’s political economy. Finally, as China invests in improving its own standardization expertise and the standardization expertise in countries involved in BRI, tracking the participation of standards experts from these countries in ISO technical committees over time could help determine the efficacy of those investments.

As new frontiers for technical standards such as 5G telecommunications, AI, and cloud computing continue to open up in the future, it is likely that we will see China push for an even greater leadership role for itself and its standards in the global economy. Unfortunately, it appears that the new Standardization Law is unlikely to contribute to the alignment of international standards and Chinese standards as much as other standards-setting organizations hoped it would. In fact, the new law’s emphasis on increased Chinese participation in international standardization processes and adoption of international standards in the Chinese context imply an intent to keep Chinese standards and international standards at least partially at odds. As long as standardization remains an integral component of China’s broader industrial policy, standardization reform in China is unlikely to bring Chinese and international standards into further alignment in the foreseeable future.


[i] “Overview of the Standards Administration of China,” International Trade Administration, 2016, https://2016.trade.gov/td/standards/Markets/East%20Asia%20Pacific/China/China.pdf.

[ii] “Premier Li calls for improvements in standardization,” State Council of the People’s Republic of China, last modified September 14, 2016, http://english.gov.cn/premier/news/2016/09/14/content_281475442336090.htm.

[iii] “Standardization Law of the People’s Republic of China,”Standardization Administration of the People’s Republic of China, March 23, 2018, http://www.sac.gov.cn/sbgs/flfg/fl/bzhf/201803/t20180323_342012.htm.

[iv] Hui Liu and Carl F. Cargill, “Setting Standards for Industry: Comparing the Emerging Chinese Standardization System and the Current US System,” Policy Studies 75 (2017): 145, 47, 49-53.

[v] “Popular Standards,”International Organization for Standardization, accessed March 11, 2019, https://www.iso.org/popular-standards.html.

[vi] Daron Acemoglu, Gino Gancia, and Fabrizio Zilibotti, “Competing Engines of Growth: Innovation and Standardization,” National Bureau of Economic Research Working Paper Series, Working Paper 15958 (2010): 7-10, http://www.nber.org/papers/w15958.

[vii] “ISO and Policy Makers,” International Organization for Standardization, accessed March 11, 2019,  https://www.iso.org/iso-and-policy-makers.html.

[viii] Dieter Ernst, “Standards, Innovation, and Latecomer Economic Development – A Conceptual Framework,” East West Center Economic Series 134 (2013): 2-3, https://www.files.ethz.ch/isn/170131/econwp134.pdf.

[ix] Ibid.

[x] Dieter Ernst, “Indigenous Innovation and Globalization: The Challenge for China’s Standardization Strategy,” UC Institute on Global Conflict and Cooperation and The East West Center (2011): 21, https://www.eastwestcenter.org/publications/indigenous-innovation-and-globalization-challenge-chinas-standardization-strategy.

[xi] Scott Kennedy, “The Political Economy of Standards Coalitions,” Asia Policy 2 (2006): 41-42.

[xii] Ibid.

[xiii] Wang Ping, “A Brief History of Standards and Standards Organizations: A Chinese Perspective,” East-West Center Working Paper Series 117 (2011): 2, https://www.eastwestcenter.org/publications/brief-history-standards-and-standardization-organizations-chinese-perspective.

[xiv] “Seven Safety Sign Proposals by CNIS Experts Are Approved in the ISO/TC 145/SC 2/WG1 Meeting,” China National Institute of Standardization, Nov 30, 2018, http://en.cnis.gov.cn/xwdt/bydt/201712/t20171227_23748.shtml.

[xv] “China Draws Up Plans to Promote Standardization in Electric Vehicles,” Reuters, March 27, 2018, https://www.reuters.com/article/us-china-autos-electric/china-draws-up-plans-to-promote-standardization-in-electric-vehicles-idUSKBN1H30J4.

[xvi] “Blockchain Technology and Application Development White Paper [中国区块链技术和应用发展白皮书],” Ministry of Industry and Information Technology of the People’s Republic of China, March 12, 2018, accessed March 30, 2018,  http://www.miit.gov.cn/n1146290/n1146402/n1146440/c6081357/content.html

[xvii] Dan Breznitz and Michael Murphee, “The Rise of China in Technology Standards: New Norms in Old Institutions,” U.S.-China Economic and Security Review Commission, January 16, 2013, https://www.uscc.gov/Research/rise-china-technology-standards-new-norms-old-institutions.

[xviii] Dieter Ernst, “Indigenous Innovation and Globalization: The Challenge for China’s Standardization Strategy,” 4.

[xix] Liu Sanjiang and Liu Hui, “The Thought and Path of China’s Standardization

System Reform,” China Soft Science 7 (2015): 1-12.

[xx] “Standardization Law of the People’s Republic of China: Chapter I, Article 8,” Standardization Administration of the People’s Republic of China, 2018.

[xxi] Ibid, Chapter III, Article 31.

[xxii] Breznitz and Murphee, “The Rise of China in Technology Standards”

[xxiii] Ibid.

[xxiv] Scott Kennedy, Richard P. Suttmeier, and Jun Su, “Standards, Stakeholders, and Innovation: China’s Evolving Role in the Global Knowledge Economy,” NBR Special Report 15 (2008): 18-20, https://www.nbr.org/publication/standards-stakeholders-and-innovation-chinas-evolving-role-in-the-global-knowledge-economy/.

[xxv] “Several Opinions on Accelerating the Cultivation of New Competitive Edges in Foreign Trade [国务院关于加快培育外贸竞争新优势的若干意见],” State Council of the People’s Republic of China, May 12, 2015, http://www.gov.cn/zhengce/content/2015-05/12/content_9735.htm.

[xxvi] Made in China 2025: Global Ambitions Built on Local Protections (Washington, D.C., U.S. Chamber of Commerce, 2017).

[xxvii] Ying Zhan & Xuezhong Zhu, “Intellectual Property Right Abuses in the Patent Licensing of Technology Standards,” Journal of World Intellectual Property 10, 3-4 (2007): 187-200.

[xxviii] “2017 Report to Congress on China’s WTO Compliance,” United States Trade Representative, January 2018,https://ustr.gov/sites/default/files/files/Press/Reports/China%202017%20WTO%20Report.pdf.

[xxix] “Final Comments on PRC Draft Standardization Law,” American National Standards Institute, May 2017, https://share.ansi.org/Shared%20Documents/Standards%20Activities/International%20Standardization/Regional/Asia%20Pacific/China/ANSI%20Comments_PRC%20St%20Law_6.8.2017%20FINAL.pdf. 

[xxx] “China’s Standardization Reform,” Deutsches Institut für Normung, August 2017, https://www.din.de/blob/257494/ee0b06981acdd9e0e9ac342ff5f40b1a/china-s-standardization-reform-data.pdf.

[xxxi] Kennedy, Suttmeier, and Su, “Standards, Stakeholders, and Innovation: China’s Evolving Role in the Global Knowledge Economy,” 27-29.

[xxxii] Dong Geun Choi and Erik Puskar, A Review of U.S.A. Participation in ISO and IEC (Washington, D.C.: National Institute of Standards and Technology,U.S. Department of Commerce, 2014).

[xxxiii] Sebastian Heilmann and Oliver Melton, “The Reinvention of Development Planning in China, 1993–2012,” Modern China, 39 (2013): 580-628.

[xxxiv] Christopher McElwain, “The World’s Laboratory: China’s Patent Boom, IT Standards, and the Implications for the Global Knowledge Economy,” Santa Clara Journal of Law 14 (2016): 444.

[xxxv] Ibid.

[xxxvi] “Several Opinions on Acceleration the Cultivation of New Competitive Edges in Foreign Trade.”

[xxxvii] Ibid.

[xxxviii] “The Central Committee General Office and the State Council General Office Publish ‘The National Informationization Development Strategy’[中共中央办公厅 国务院办公厅印发《国家信息化发展战略纲要》],” The Ministry of Industry and Information Technology of the People’s Republic of China, July 28, 2016,  http://www.miit.gov.cn/n1146290/n1146392/c5168620/content.html.

[xxxix] Covington and Burling LLP, Measures and Practices Restraining Foreign Investment in China, Washington, DC, Prepared for the European Commission Directorate-General for Trade, 2014, accessed April 10, 2018, http://trade.ec.europa.eu/doclib/docs/2014/august/tradoc_152739.08.10.pdf.

[xl]  Ibid.

[xli] “Outline of the Ningbo City 13th Five-Year Plan for Social and EconomicDevelopment[宁波市国民经济社会发展第十三个五年规划纲要],” National Development and Reform Commission of the People’s Republic of China February 26, 2016, http://www.ndrc.gov.cn/fzgggz/fzgh/ghwb/dfztgh/201607/P020160713600628829652.pdf. 

[xlii] “Fujian Province ‘13th Five-Year Plan’ Digital Fujian Special Plan [福建省“十三五”数字福建专项规划), Fujian Provincial People’s Government, August 27, 2016, http://cs.fuzhou.gov.cn/xjwz/xxgk/ghjh/zxgh/201608/t20160827_1408391.htm.

[xliii] “The State Council Issued New Energy Automotive Industry Development Plan,” Hubei KAIT Automotive Electronic & Electrical Systems Co., Ltd., October 11, 2015,http://en.kait.com.cn/news_detail/newsId=6.html.

[xliv] Stefan Timmermans and Steven Epstein, “A World of Standards but Not a Standard World: Toward a Sociology of Standards and Standardization,” Annual Review of Sociology 36 (2010): 69-89.

[xlv] “Advanced Standards to Help Promote the Quality of Consumer Goods,” State Council of the People’s Republic of China, August 26, 2016, http://english.gov.cn/policies/policy_watch/2016/08/26/content_281475426347836.htm.

[xlvi] “ISO Member Profile: Standards Administration of China,” International Organization for Standardization, Accessed March 11, 2019, https://www.iso.org/member/1635.html

[xlvii] Louise Lucas,“Huawei’s R&D Budget Hits $14bn as Next Generations Arrive,” Financial Times, March 30, 2018, https://www.ft.com/content/7abddaca-33dc-11e8-a3ae-fd3fd4564aa6.

[xlviii] Wang Xiaodong, “ISO Assembly Held in Beijing,” China Daily, September 9, 2016, http://www.chinadaily.com.cn/cndy/2016-09/19/content_26823740.htm.

[xlix] Ibid.

[l] Chunding Li, Jing Wang, and John Walley, “China’s Regional and Bilateral Trade Agreements,” NBER Working Paper Series (2014): 3-6, http://www.nber.org/papers/w19853.

[li] Li Yang, “Belt and Road Initiative Prompts Chinese Standards to Go Abroad,” China Belt and Road Portal. November 9, 2017, https://eng.yidaiyilu.gov.cn/qwyw/rdxw/33898.htm.

[lii] Peter Cai, Understanding China’s Belt and Road Initiative (Sydney: The Lowy Institute,2017).

[liii] “Action Plan to Connect ‘One Belt, One Road’ Through Standardization (2015-2017)[标准联通“一带一路”行动计划 (2015-2017)],” National Development and Reform Commission of the People’s Republic of China, October 22, 2015, http://www.ndrc.gov.cn/gzdt/201510/t20151022_755473.html.

[liv] Ibid, Section 3, Article 4, “统筹规划,需求导向.”

[lv] “Action Plan on Belt and Road Standard Connectivity[标准联通共建“一带一路”行动计划 (2018-2020)],” Belt and Road Portal, January 11, 2018, https://www.yidaiyilu.gov.cn/zchj/qwfb/43480.htm.

[lvi] Ibid, Section 4, “专项行动.”

[lvii]  Ibid, Section 3, Article 4, “拓展对外贸易标准化合作.”

[lviii] Joseph A. Clougherty and Michael Grajek, “International Standards and International Trade: Empirical Evidence from ISO 9000 Diffusion,” National Bureau of Economic Research Working Paper Series (2012): 1-3, http://www.nber.org/papers/w18132.

[lix] Steve Charnovitz, “International Standards and the WTO,” GW Law Faculty Publications & Other Works, Paper 394 (2005), http://scholarship.law.gwu.edu/faculty_publications/394.

[lx] Ayoub Mousefi and Mengyi Liu, “The Impact of Technical Barriers to Trade: The Cases of Trade Between China, Japan, Korea, and the US,” in Innovation in the High-Tech Economy: Contributions to Economics, ed. Chuan P., Khachidze V., Lai I., Liu Y., Siddiqui S., Wang T (Berlin, Heidelberg: Springer, 2013).

[lxi] “Agreement on Technical Barriers to Trade,” World Trade Organization, accessed March 11, 2019, https://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm.

[lxii] ANSI-USAID Standards Alliance Year Five (2017-2018) Plan. (Washington, D.C.: American National Standards Institute, 2017), https://standardsalliance.ansi.org/documents/StandardsAlliance-Year-5-Plan-2017-2018.pdf.

[lxiii] “US-China Business Council Comments on the Revised Draft Standardization Law,” The US-China Business Council, June 13, 2017, https://www.uschina.org/sites/default/files/2017.06.13_us-china_business_council_comments_on_the_revised_draft_standardization_law-en.pdf.

[lxiv] Standardization Law of the People’s Republic of China, Section I, Article 8.

[lxv] Ibid.

[lxvi] Findings of the Investigation Into China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under Section 301 of the Trade Act of 1974 (Washington, D.C.: Office of the United States Trade Representative, 2018), https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF.

[lxvii] Ibid.

[lxviii] China Manufacturing 2025: Putting Industrial Policy Ahead of Market Forces (Berlin, Germany: European Chamber of Commerce, 2017), http://docs.dpaq.de/12007-european_chamber_cm2025-en.pdf.

[lxix] Ibid.

[lxx] “Action Plan to Connect ‘One Belt, One Road’ Through Standardization (2015-2017)[标准联通“一带一路”行动计划 (2015-2017)],” National Development and Reform Commission of the People’s Republic of China

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