China's President Xi Jinping raises his glass and proposes a toast at the end of his speech during the welcome banquet for leaders attending the Belt and Road Forum at the Great Hall of the People in Beijing on April 26, 2019.
Nicholas Asfouri | AFP | Getty Images
China is set to release an ambitious 15-year blueprint that will lay out its plans to set the global standards for the next-generation of technologies.
The move could have wide-ranging implications for the power Beijing wields on the global stage in areas from artificial intelligence, to telecommunications networks and the flow of data, experts told CNBC.
"China Standards 2035" is set to be released this year after two years of planning. Experts said it is widely seen as the next step, following the "Made In China 2025" global manufacturing plan — but this time, with a much larger focus on technologies that are seen as defining the next decade.
"The diagnosis is, we are entering an era that will be defined by new technological systems and networks and technologies and the leaders in those are yet to be determined and this gives China the opportunity to determine that," Emily de La Bruyere, co-founder of consultancy Horizon Advisory, told CNBC in an interview.
"That means power in the world is up for grabs."
What are standards?
Technologies and industries around the world have standards that define how they work and their interoperability around the world. Interoperability refers to the ability for two or more systems to work together.
The telecommunications industry is a good example. New networks such as 5G aren't just turned on. They take years of planning and development. Technical standards are created through collaboration between industry bodies, experts and companies.
Those technical specifications are adopted and integrated into what becomes known as standards. That ensures that standards are as uniform as possible, which can improve the efficiency of network rollouts and ensure they work no matter where you are in the world.
Technical standards is not a topic that is simply abstruse but a concrete way to shape the playing field and landscape for the future of these technologies.
Elsa Kania
Center for a New American Security (CNAS)
Standards are behind many of the technologies we use every day, such as our smartphones.
Major American and European technology companies, such as Qualcomm and Ericsson, have been part of standards setting across various industries. But China has played an increasingly active role in the past few years.
What do we know about the plan?
In March, Beijing released a document which translates as "The Main Points of National Standardization Work in 2020."
Bruyere and Horizon Advisory co-founder Nathan Picarsic said this gives us an insight into what might be found in the final blueprint for China Standards 2035, particularly when looking at Beijing's plans internationally.
Some of the points in the plan from March include a push to improve standards domestically across various industries, from agriculture to manufacturing. But one section of the document highlights the need to establish a "new generation of information technology and biotechnology standard system."
Within that section, there is a focus on developing standards for the so-called Internet of Things, cloud computing, big data, 5G and artificial intelligence (AI). These are all seen a crucial future technologies that could underpin critical infrastructure in the world.
The document also outlines the need to "participate in the formulation of international standards" and that China should put forward more proposals for international standards.
One expert said the move is a dual play — to strengthen standards domestically and boost the economy, and to have influence globally.
"China domestically is trying to up its standards game. One of the big weaknesses in the economy is the fact that nothing happens in a standard normalized way across time, distance and space. You have different requirements in this city, different requirements from day to day from month to month," Andrew Polk, partner at Beijing-based research and consultancy firm Trivium China, told CNBC.
"(China Standards 2035) is a combination of domestic exigencies and the need to improve their own economic performance and efficiency and their desire to set the standards, literally and figuratively, abroad."
As Beijing began researching for China Standards 2035, an official reportedly said it was the country's opportunity to "surpass" the rest of the world. Dai Hong, director of the second department of industrial standards of China's National Standardization Management Committee, was quoted by state-backed publication Xinhua as saying at that time that many of the patents and technical standards for next-generation technologies had not yet been formed.
China's standards push
China Standards 2035 gives the country a new impetus but over the past few years, the influence of the world's second-largest economy was already growing.
"5G is a prominent example in so far as, 5G is the case we have seen the most aggressive companies not just to set standards at home but to actively shape global standards setting," Elsa Kania, adjunct senior fellow with the technology and national security program at the Center for a New American Security (CNAS), told CNBC.
5G refers to next-generation mobile networks that are seen as critical in supporting future infrastructure.
Chinese firm Huawei, one of the leading players in 5G networking equipment, has also been a key player in standards setting. It has the highest number of patents related to 5G, and is ahead of its closest European rivals Nokia and Ericsson, according to intellectual property analysis firm IPlytics.
In addition, it has been a key part of forming the technical specifications for 5G via an industry body known as 3GPP. Also known as 3rd Generation Partnership Project, it brings together standards organizations that seek to develop global standards for cellular networks.
"Technical standards is not a topic that is simply abstruse but a concrete way to shape the playing field and landscape for the future of these technologies," Kania said. "The decision made on standards can have commercial consequences while also shaping the architecture to the advantage or disadvantage of companies."
China's national standards push is already underway. Beijing has already formed a new committee focused on creating standards for blockchain technology.
The world's second-largest economy is looking to become a leader in the nascent space after President Xi Jinping last year urged the country to "seize the opportunities" presented by the technology. Some of China's major technology companies including Huawei and Tencent are part of that committee.
Belt and Road
Launched in 2013, the Belt and Road Initiative (BRI) is a massive infrastructure project that seeks to link more than 60 countries from Asia through to Africa and Europe in a complex network of roads, rails and ports.
But last year, Xi expanded the scope of the BRI to include technology. The BRI is also seen as one way China is able to spread its standards and influence.
The more technical and technology standards are defined by Beijing, the more associated data will become subject to the Chinese government's various data localization and access policies.
Nathan Picarsic
co-founder, Horizon Advisory
"The PRC (People's Republic of China) makes diplomatic agreements—such as memorandums of understanding— incorporating PRC technical standards extensively within the BRI realm as a major policy component of its action plans," Ray Bowen, senior analyst at Pointe Bello, said in a written testimony last month to the U.S.-China Economic and Security Review Commission.
Adam Segal, director of the digital and cyberspace policy program at the Council on Foreign Relations, noted in a testimony to the same committee that standards have been written into memorandums of understanding with a number of nations.
Developing economies such as Vietnam and Indonesia are likely to adopt those Chinese standards because "they are cheaper than Western alternatives and the draw of the Chinese market," Segal said.
Data flows
As China's influence on global technology grows, more and more questions about its access to data will emerge.
"China's standards play overlaps with and intends to expand its strategy of asymmetrical access to data," Horizon Advisory's Picarsic said. "The more technical and technology standards are defined by Beijing, the more associated data will become subject to the Chinese government's various data localization and access policies."
Some legislations in China appear to compel any company to comply with government requests for help with vaguely-defined "intelligence work."
This is one reason that the U.S. and other countries have raised concerns about Huawei. They feel that should Huawei be allowed in their 5G networks, data running through those pipes could be accessed by Beijing. Huawei founder Ren Zhengfei has repeatedly said that Huawei would never hand customer data over to the Chinese government.
US approach
Standards are certainly on the agenda right now in Washington.
The U.S.-China Economic and Security Review Commission is due to hold a hearing on Monday titled "A 'China Model?' Beijing's Promotion of Alternative Global Norms and Standards." It had to be postponed because of the coronavirus.
But in general, there is no unified effort from the U.S. to this point. President Donald Trump has even proposed funding cuts to the National Institute of Standards and Technology.
"Standards, it's probably the least sexy thing you can think about," Trivium China's Polk said. "And it takes sustained long term effort, attention and investment. That is why you worry about western governments being behind the ball on this and having the capacity to have as sustained focus (as China) on these issues."
The coronavirus pandemic has also distracted governments from this issue. While China may be able to balance dealing with the fallout and their long-term focus on standards, it may not be as easy for the U.S.
"It seems like the Chinese are preparing themselves to try to walk and chew gum at the same time, in terms of addressing the short-term challenges and keeping their long-term goals in check. I don't see the balancing of long-term and short-term objectives as much in the U.S.," Polk said.
Challenges ahead
China may have big ambitions, but dislodging the dominance of the U.S. and Europe won't be an easy task.
"While increased Chinese participation and government involvement has created some procedural challenges, it has not created undue influence or tipped the competitive scales in favor of the Chinese," Naomi Wilson, senior director for policy in Asia at the Information Technology Industry (ITI) Council, said in a written testimony last month to the U.S.-China Economic and Security Review Commission.
"In fact, U.S. and multinational companies are still largely regarded as the most influential participants in ICT-related standards bodies — based on their technical leadership and expertise, deep understanding of standards processes and rules, quality of contributions, and consistent participation over time."
The ITI represents over 70 global information and communications technology companies.
China will also need to boost the quality of the companies contributing to global standards. The country will need to develop companies that are able to do what Huawei is doing, but in a variety of different technology sectors, according to Polk.
"These standards are set by industry bodies through companies that participate in them. Usually the companies want the best, the highest standards, and the best tech usually wins out. That is why the U.S. and Europe have the incumbent advantage. They have highly advanced companies," Polk told CNBC.
"They (China) won't be able to get away with dominating standards regimes in various areas with subpar technology. They have to have Huaweis in other areas."
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