The Yin and Yang of China’s Trade Strategy: Deploying an Aggressive Standards Strategy Under the WTO

Andrew Updegrove

5/01/2005
(Original Publish Date: 4/29/2005)

Since the decision of Deng Xiaoping to subject his country's future to the effect of economic market forces, the People's Republic of China has made deliberate - and successful - efforts to become a force to be reckoned with on the global commercial stage. As part of that strategy, China embarked on an ultimately successful 15-year quest to be admitted to the World Trade Organization (WTO), thereby becoming bound by the Agreement on Technical Barriers to Trade (TBT). At the same time, China devised a sophisticated strategy to incorporate standard setting and compliance requirements into its economic strategy, and has invested significant resources in creating an infrastructure to support these activities. This strategy provides China with an alternative tool to replace the high tariffs barred by the WTO in order to convey advantages to its domestic industry in key areas of technology, especially where foreign standards requiring the payment of significant patent royalties would otherwise place it at a competitive disadvantage. However, the deployment of this strategy at times has tested the boundaries established by the TBT, leading to vigorous objections from Multinational Corporations and the governments of the nations where they are headquartered. This article reviews China's efforts to become an equal partner in the global trade community, and the development in that context of its standards strategy, the infrastructure that supports it, and the status of those "home grown" standards that China is currently promoting in competition with correlative standards developed elsewhere in the world.