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US warns China of 'technological isolation'

by Staff Writers
Washington (AFP) May 8, 2008
The United States warned China Thursday that it risked "technological isolation" for developing unique technical standards of its own that also are shutting out foreign competition.

Despite widely accepted international standards, China developed standards mandated by government regulations amid a lack of transparency and due process, said Under Secretary of Commerce Christopher Padilla.

"These requirements certainly provide Chinese domestic companies an unfair advantage, but they also carry great risks for China," he told a conference in Washington on standards and innovation in China.

In the 1980s, he said, Japan thought its market was large enough to justify unique technology standards that would eventually move the world in its direction, to the benefit of its companies.

"It was wrong," he said.

"Now China runs the same risk of turning itself into a lonely island of technological isolation, cut off from the world by government-mandated, China-unique standards that are out of line with where the market-driven global economy is heading."

Many American companies have expressed concern about security standards for information technology products that made it costly for them to enter the Chinese market, said Padilla, who is policy chief for international commerce.

"We see this happening in other areas as well, including telecommunications, electronics, digital media, and software," he said.

Citing as an example, he said it appeared that Beijing favored a China-specific third-generation (3G) mobile phone standard over internationally recognized standards.

"While China's approach may appear to provide a competitive advantage in the short term, it in fact inhibits collaboration, limits product development, reduces consumer choice, and hinders China's competitiveness and growth," he said.

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