China's Global Ambition to Standardization Impact on Trading Partners

Abstract

China has ambitious targets with its standardization system: Standards shall become a key pillar for the innovation power of Chinese industry and at the same time helping to pave the way in important export markets. This Think Piece explores the ongoing reform of Chinese standardization system, analyses some key elements, and explains how this may affect its trading partners.The reform is a challenge for the Chinese industry: They will have to learn to engage and cooperate in defining and shaping standards for future markets, without government support, but together with international competitors. This requires a sensitivity for both international and domestic developments, and a willingness to abstain from globally incompatible “China only” solutions. We still see many standardization activities in China which seem to be disconnected from the rest of the world: Simple “study” of related international standards will not help to solve this problem – it requires active engagement and participation of Chinese industry globally.The reform is especially interesting since China continues with maintaining in parallel compulsory and voluntary standards: Compulsory standards will continue to replace technical regulations, despite all the known disadvantages such compulsory standards entail. On the other hand voluntary standards shall become more innovative and export oriented through a decoupling from most of current government controls. These two tendencies contradict each other and it is still unclear how this system is going to work in reality.One of the key issues related to the Chinese standardization system is unfortunately not being addressed: The lack of a comprehensive framework of technical regulations. This makes the implementation of a modern risk‐based approach toward product safety very difficult, it also endangers also the entire reform project. It allows an outdated system to continue, a structure where the government remains responsible for safety and quality of goods and services. The consequence is an emphasis on compulsory controls, a time consuming structure which is adding to the cost of production and trade.Nevertheless, the new structure of Chinese standardization will allow China to more forcefully engage in trade negotiations: The new “association standards” might be considered “less political”, thus also more palatable for an audience very sensitive about any sign of Chinese dominance in the region.