Interesting news today on possible technology collaboration between Taiwan and the PRC:

More than 40 executives from local firms are in Beijing to discuss standards for cellphones, audio-visual systems, portable storage devices and LCDs

Taiwanese and Chinese companies such as DBTEL Inc (大霸) and Lenovo Group Ltd (聯想) are seeking to cooperate on development of formats for mobile phones, flat panels and other digital devices to compete with European and US standards.

China has been struggling with its policy on standards (especially for wireless technology) for a while now – on the one hand, it has started getting involved in global standardisation processes for future generations, but on the other has been trying to develop its own standards so that it doesn’t get locked in to standards developed in the West. However, things haven’t gone so smoothly with its homegrown standards:

• In 2003, China announced that any wireless computer (WiFi) equipment sold in China would have to support its proprietary (and secret) encryption standard called WAPI. Any company wishing to sell into China would have to license a solution from one of a handful of Chinese companies who were allowed to develop the system. After a long argument, many companies (most notably Intel) said they would stop selling their products in China if this was enforced – which finally forced China to back down, and scrap it’s plans for WAPI.[*]
• Ever since the late 90s, China has been working on its own 3G mobile phone system (called TD-SCDMA), which is free of all the patents held by US and European companies. Although they had some success in getting some Western countries to invest in this, it has been taking a long time to develop this system – and recent tests have shown there are still a lot of problems to be ironed out. Luckily, takeup of Western 3G systems has also been slow, but nevertheless, China’s system is seen to be 2 or 3 years behind the competition.

In this light, it makes a lot of sense for China to partner with Taiwan on development of more ‘home grown’ standards. Taiwan has plenty of experience which could help China, and of course Taiwanese companies are as keen to exploit the China market as any.

*Note that one suspected reason for the WAPI standard was that the PRC had build in a ‘back door’ which would allow them to listen in on anything transmitted using WAPI – a wireless extension to the great firewall. Rebecca may be interested to note that Cisco was one of the companies who didn’t complain about this, and would have been happy to implement it in their products.