Home networking, the Chinese way

Has China finally figured out how to play the technical standards game?

Published October 30, 2006 11:37PM (EST)

Once, many years ago, I pitched a story to an editor at Wired magazine about a behind-the-scenes battle over arcane technical standards, that had, I claimed, huge implications for the future of the Internet. The editor stared at me, deadpan, for a few seconds. Then, with great ponderousness, in between bites of a large roast beef sandwich, he enunciated carefully: "Standards... stories... are... boring."

Even now, more than a decade later, I hear his pronouncement ringing in my head as I think about how to interpret what political scientist Scott Kennedy calls, in his new paper, "The Political Economy of Standards Coalitions: Explaining China's Involvement in High-Tech Standards Wars," China's "overwhelming record of failure in standards development to date." (Thanks to Silicon Hutong for the link.)

Here's the problem: buried underneath a landfill of unintelligible acronyms, WAPIs and TC-SCDMAs and AVSs and IGRSs is a story about China's attempt to undermine Western control of the nuts and bolts of the high-technology economy. Mastery of the high-tech universe belongs to those who control the standards, not those who make the widgets. If China could set its own standards for wireless networking and DVD encryption and cellphone transmissions, then it wouldn't have to pay licensing fees and royalties to the Western multinationals who own the intellectual property that is currently embedded in existing international standards.

Chinese resentment at how "the technological terms of trade are stacked against them," as the University of Oregon's Pete Suttmeier describes it, dates back at least as far as the Opium Wars, when Western military might forced the legalization of the opium trade and extracted numerous other extraterritorial concessions. There is a powerful historical impetus behind Chinese efforts to achieve equity in what some see as a kind of technical neo-imperialism. The battle is no longer fought with gunboats, but with the specifications that determine how consumer electronic devices work. As Suttmeier told me last fall, "What the Chinese want to do is hack the system up, in ways that give them more leverage as they go forward."

That's the big picture. But the nitty gritty details, which require diving into a tedious analysis of warring white papers, deliberations by standards bodies, and thickets of impenetrable jargon, are generally mind-numbing. (I defy anyone to take the name of the industry alliance formed by the Chinese companies Lenovo, TCL, Konka, Hisense and Great Wall, "Information Equipment Resource Sharing System Service Standards Working Group," and do anything remotely sexy or clever with it.)

This is all a long-winded way of explaining why How the World Works spends more time contemplating global ecocide or insidious pharmaceutical attemps to rig free trade agreements than it does China's generally unsuccessful attempts to impose its own home-grown technical standards on the rest of the world.

But then, two weeks ago, my interest was piqued by a story by EE Times' Mike Clendenin detailing how "IGRS," a Chinese home networking standard, "is gaining traction in the market, spurring its designers to pursue it as an international standard and to encourage the input of multinationals."

The "Intelligent Grouping and Resource Sharing" standard is aimed at getting all your consumer electronic gizmos, TVs, mobile phones, PCs, printers and digital media devices talking to each other out of the box. I think it is safe to say that a successful implementation of such a standard would be considered one of civilization's greatest achievements, on a par with the discovery of the wheel, or possibly even the introduction of reality television. But aside from the lasting historical significance of such an advance, the obvious question is, How did China manage success in this domain? China's attempt at its own encryption standard for wireless networking, WAPI, was an international debacle squashed ignominiously in the face of virulent objections from the U.S. government and foreign multinationals. There is already an alternative standard for home networking, the Digital Living Network Alliance, which is being pushed by the biggest names in consumer tech, including everyone from Sony to Microsoft to Intel to Nokia.

This is precisely the question that Scott Kennedy attempts to answer in his brand-new paper, by comparing the WAPI saga with the rise of IGRS. Basically, he says, it comes down to successful transnational coalition building. The attempt to push WAPI was largely spearheaded by the Chinese government, in opposition to substantial objections not only from the West, but from domestic Chinese electronic device manufacturers within China who saw their own businesses likely to be harmed by a showdown with the West. WAPI had political backing, but very little industry support.

In contrast, the IGRS effort is, by Kennedy's reckoning, more of a grass-roots effort that has benefited from government facilitation, but is open to building coalitions with non-Chinese companies, and working within the system.

In a global context, says Kennedy, WAPI was clearly designed as a way to promote Chinese industry at the expense of the West -- it was, in short, protectionist. But:

...As Chinese abilities expand, however, standards efforts will not necessarily become more protectionist. That is because China's strategy to modernize has been based for over two decades on attracting billions of dollars in foreign investment and deeply integrating Chinese industry into global production networks. The weight of these relationships generates economic, and thus political, opposition to protectionist strategies within China.

...As China industrializes and becomes more involved in the WTO and the global economy, Chinese companies are gradually learning to play the capitalist game -- not only by old Chinese rules and just in China, but also by international rules and in international forums. Though foreign businesses will lose some of the standards contests in China, these defeats will not result from outright mercantilism but rather from the fact that some of these companies will be in the wrong coalition. Other foreigners will win by being in the right coalition.

One could well ask, Does the integration of China into global production networks mean that China has been co-opted by technological neo-imperialism? Or are global production networks actually the Trojan Horse through which ever more canny Chinese standard makers infiltrate the rest of the world? Or are both analyses equally true? Personally, I just want a home networking system in which all my devices talk fluently to each other -- as equals -- without my having to do anything. It would be nice if the global economy worked that way too.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

MORE FROM Andrew Leonard

Related Topics ------------------------------------------

China Globalization How The World Works