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China pushes home-grown technology

China has ordered “strong support” for the development and use of domestic technology in its telecoms industry amid a restructuring of the country’s telephone operators and the approaching launch of third-generation wireless services.

The demand for greater favourable treatment for domestic products highlights China’s determination to leverage its status as one of the world’s most important telecoms markets and ensure it is at the forefront of technology development.

It also has implications for international telecoms equipment vendors that face increasing competition both within China and overseas from Chinese companies such as Huawei and ZTE.

In a statement at the weekend, the government said its planned reorganisation of telecoms operators should be accompanied by a raft of measures to promote home-grown technology.

Government departments and enterprises would be “encouraged” to give priority to the use of products featuring “autonomous innovation”, it said. Financial institutions would be “guided” to increase support for companies that developed or manufactured products featuring local technology, giving them priority access to capital markets.

“Relevant government departments will make use of favourable overseas loans, aid grants and other export policies to promote the globalisation of products featuring autonomous innovation,” the statement said.

An increase in such support for Huawei, ZTE and other Chinese vendors could fuel their already impressive success in winning an important share of the market for network equipment in developing countries.

Meanwhile, the statement made clear that the government wanted local operators to do more to favour domestic suppliers, which have in the past complained about the easy access to China’s market granted to international rivals such as Nokia and Alcatel-Lucent.

State asset administrators would make the use of autonomous innovation a benchmark in their appraisals of operators’ performance, the government said.

The likely effectiveness of such instructions is unclear, however, with past efforts to promote local technology bearing mixed results.

The government shied away from mentioning its current flagship project: telecoms technology based on the Beijing-backed 3G standard TD-SCDMA. The technology is widely used in Japan, Europe and the US and allows swift data functions such as web surfing on phones and e-mail.

TD-SCDMA lags far behind the more established international 3G standards, WCDMA and CDMA2000.

Despite TD-SCDMA’s troubles, the government’s statement underscored China’s determination to play an active role in setting global “4G” standards.

Источник: Financial Times

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