China’s standardization & intellectual property policies : in light of WTO regime and membership




Sozumert, Sait

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China's policy makers see international standards as a barrier to their country's economic development, more importantly, as an offence to the country's national pride. This belief has been reinforced by the view that multi-national companies have used international standards to force developing countries to deprive them of the ability to enter the international markets by forcing them to pay high royalty rates, due to the patents incorporated in these standards. Moreover, these standards, as they believe, have been created at international standards setting platforms dominated by multi-national companies and developed countries. In return, China has launched several initiatives to create home-made Chinese standards free from patent claims of these companies. China's home-madestandards, some of which differ significantly from international standards, also reportedly serve to protection of its domestic market. China's accession to the WTO was formally approved in November 2001 and China became the WTO's 143rd member on December 11, 2001. WTO membership opened a new era for China. In spite of the international expectations for removal of all trade protection mechanisms which are incompatible with the international trade regime, China is reported to have sought to reform its policies by employing new strategies concerning IPR and standards. The thesis of this report is that China has not diverged significantly from developing home-made Chinese standards after the country’s entry into the WTO, but Chinese authorities have adopted more flexible strategies to implement this policy. Accordingly, this report is about change in policy strategies. I argue that China has continued to enforce its own will upon foreign companies with a strong self-confidence stemming from its ability to negotiate on unequal terms with foreign companies, owing to its sheer market size. However, China's new strategies have been shaped by weak coordination and disagreement among government agencies and institutions. To illustrate the potential explanatory power of this account, I have examined two important home-made standards initiatives by China; Wireless Authentication and Privacy Infrastructure (WAPI) and Audio Video Coding Standards (AVS). From the examination of the WAPI and AVS cases, I conclude that China's strategies have continued to evolve through disagreements and negotiations between Chinese government institutions within policy boundaries set by China's WTO membership and increasing international criticism.




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