Sens. Rob Portman (R-Ohio) and Catherine Cortez Masto (D-Nev.) have introduced a measure to scrutinize China’s influence in setting global technology standards.
In new technologies such as 5G, artificial intelligence, and IoT (internet of things), international organizations and industry associations oversee intellectual property ownership and set production and security standards to be adopted worldwide. These bodies typically have different countries represented within them.
The Chinese regime has sought to increase its presence in such associations as part of its China Standards 2035 economic blueprint, which seeks to have China’s technical standards chosen and exported to the international market. Doing so allows Beijing to become less dependent on foreign technology while Chinese companies can earn licensing royalties from their patents.
Ensuring American Leadership
Named the Ensuring American Leadership over International Standards Act, the legislation would have the U.S. Director of the National Institute of Standards and Technology (NIST) commission a study on “the impact of the Chinese government’s influence in setting global standards for emerging technologies,” according to a Nov. 18 statement from Portman’s office.
The study would also provide feedback on “how the United States and our global allies can continue to ensure that international standards-setting continues in a transparent and democratic manner.”
According to the text of the House bill, the NIST study would include assessments on how China has boosted its presence at international standards-setting organizations in the past 10 years, the impact of China’s economic blueprint “China Standards 2035” on these international bodies, and whether international standards are designed to promote another Chinese industrial plan, “Made in China 2025”—which aims for the country to achieve self-sufficiency in 10 tech sectors by the year 2025.
Additionally, the NIST study would examine how China might engage in international standardization activities in the future for next-generation technologies such as AI and quantum information science, according to the House bill.
Worried that the Chinese regime could exert undue influence on the process, Cortez Masto said “setting international technology standards must be done in a transparent and democratic manner.”
Beijing rolled out “China Standards 2035” in March 2018.
In December that year, 12 Chinese standards-related institutions met in Qingdao, a port city in eastern China’s Shandong Province, to discuss advancing the plan via military-civil fusion (MCF), according to Chinese media reports. The latter refers to Beijing’s strategy to harness the power of private industry to fuel military modernization.
China’s efforts to leverage MCF have come under close scrutiny by U.S. officials in recent years. On Nov. 12, President Donald Trump issued an executive order banning U.S. investments into Chinese companies that are connected to China’s military.
The Chinese regime has heavily backed the standard-setting effort. In 5G wireless technology, for example, China has successfully dominated.
“The Chinese government is channeling state financial support to help Huawei and other Chinese firms send personnel to attend 3GPP meetings and flood the process with Chinese technical contributions,” Melanie Hart, senior fellow and director of China policy at the Center for American Progress, said during congressional testimony in March. 3GPP is an umbrella organization that develops protocols for mobile telecommunications.
Chinese telecom giant Huawei submitted more than 19,000 technical contributions to 3GPP, while U.S.-based Qualcomm and Intel made 5,994 and 3,656 technical contributions respectively, according to Hart.
Huawei was also the leader in approved technical contributions; 3GPP members approved 5,855 contributions from Huawei, surpassing both Qualcomm (1,994) and Intel (962).
In addition, Chinese firms owned about 36 percent of the patents essential for the global 5G standard, while U.S. companies held about 14 percent—giving the former “a price advantage in global market competition,” according to Hart.
Beijing also promotes Chinese firms’ standards by including them in bilateral agreements with other countries, such as Belt and Road Initiative (BRI) projects, said Adam Segal, director of the digital and cyberspace policy program at the Council on Foreign Relations, at the same hearing.
The BRI was rolled out in 2013, with the objective of increasing geopolitical influence by building up trade routes linking China with Southeast Asia, Africa, Europe, and Latin America.
China has signed memorandums of understanding on standardization with a number of countries, including Mexico, Vietnam, and Indonesia, Segal noted. Developing countries were more likely to adopt Chinese standards because “they are cheaper than Western alternatives” and carry “the draw of the Chinese market,” he added.