European business says technical standards 'new battleground' for China, rest of world

© Reuters. FILE PHOTO: People walk along at financial district of Lujiazui in Shanghai, China October 15, 2021. REUTERS/Aly Song

SHANGHAI (Reuters) - A European business group said on Thursday that technical standards were a "new battleground" for Chinese companies and their overseas rivals and urged Beijing to "provide fair and equal treatment" for all firms involved in setting such requirements.

"While the politicisation of standardisation is in part a result of China's own approach, it is not actually in China's interests," the European Chamber of Commerce in China and the Swedish Institute of International affairs said in a joint report on Thursday.

According to the Chamber, China currently is responsible for just 1.8% of international technical standards - broadly defined as frameworks for new technologies that industry players agree to abide by to ensure interconnectivity or compatibility across a vast range of products.

Yet that percentage is growing rapidly, as China is now pushing hard to boost its influence in standards-setting.

China has emerged as a new leader in standards development for certain domains, such as 5G, for which companies like Huawei Technologies Co Ltd have led many contributions to 3GPP, a global industry group for the telecom industry.

China in October published an outline for its plan to promote a national strategy for technical standards, calling for increased participation in global standards setting and a move away from state-led standards development toward a "state and market"-led model.

According to Joerg Wuttke, president of the Chamber, standards associations in China will at times keep foreign members away from discussions, either formally or informally.

In one Chinese work group for telecommunications standards with international members, discussions sometimes "take place outside that committee, and we basically are with our nose against the window," said Wuttke in a media briefing.

Meanwhile, despite official calls from Beijing to minimize overt state direction of standards development, the reports' authors argue that government influence looms via the heavy role of Chinese state-owned enterprises and state-affiliated research institutions.

That increases the likelihood that China's contributions to international standards-setting will serve the country's own political and economic agenda, deviating from what the authors describe as a market competition-centric model of standards setting in Europe.

The chamber writes that the EU should cooperate with China but "be clear about international rules and reciprocity."

"The EU has no interest in the bifurcation, fragmentation, or regionalization of technical standardisation into two or more spheres," the authors write.

"Such a decoupling of standards will shrink markets, hamper international trade and reduce innovation."