China and the United States have been involved in difficult discussions-both high-profile disputes and silent confrontations-on information and communications technology (ICT) standards and related policies. While the United States is trying to maintain its lion's share of the digital economy in global markets, China wants to increase its own share in proportion to its growing capacity for manufacturing and innovation. Conflicts are unavoidable, but at the same time neither nation can afford a full-fledged standards race. Systematic and meaningful solutions to this clash are needed in order to sustain ICT industries in both countries and in the global digital market. To achieve a solution, both sides need to reevaluate their positions in previous discussions, taking into consideration the other side's views. While solutions are not easy to find in the available international rules and practices of the World Trade Organization (WTO) and other international organizations, it is still desirable for both parties to refrain from disputes and enter into theoretical and policy discussions aimed at exploring interest-maximizing mechanisms.
In 2004, disputes suddenly arose over information and telecommunication standards between the United States and China and escalated to an unexpectedly high level. These disputes concerned both the underlying policy issue of intellectual property rights (IPRs) in information and communications technology standardization and specific standards, such as the standard surrounding wireless local area networks (WLAN). The wireless-device security standard favored by the Chinese, known as WAPI (WLAN Authentication and Privacy Infrastructure), and 3G (the third-generation mobile standard) were two of the eight major issues discussed in the Vice-Premier-level bilateral dialogue of the Joint Committee for Commerce and Trade (JCCT) in 2004.1 WAPI was also intensely negotiated in the World Trade Organization (WTO). China later submitted the IPR standardization issue to the WTO in 2005, but it encountered resistance from the United States.2
These discussions have caused unrest not only in the trade arena, but also in the political arena. Although both the United States and China criticized each other initially, the storm has seemingly abated. While discussions on the same issues continue, there are also new discussions on issues such as the Chinese mandatory conformity regime, brought to the attention of the WTO in 2007, and the Trusted Computing Modem (TCM) standard.3
Though the American concerns over these new standards are no less than the concerns over previous standards, they fall short of outspoken disputes. However, this change in tone does not necessarily mean these issues are becoming less important or less contentious. In fact, the opposite may be true. Since the emergence of the WAPI issue, Chinese industries and academics have expressed great frustration with the American approach to the U.S.-China disputes on ICT standards, as well as distrust of the sermon-style arguments used by the United States to persuade China to change its policies.4 From the U.S.'s perspective, the concern over Chinese standards initiatives might have been more substantial since Chinese standards awareness has been entrenched. Since both sides have noticed the difference yet resisted change, the situation may be worsened.
The next question is whether the United States and China will enter into a fullfledged standards race in which China will pursue its go-alone standards game and the United States will try to force China back to the current regime so as to maintain a dominant share of the global digital economy. It is obvious that the changing international trade landscape and the global nature of ICT standards will remind both sides that a vehement standards race is neither practical nor beneficial for either party. The question then remains: What strategies will each country pursue in the context of a multilateral policy scenario in which other countries are also showing great interest in ICT standards? …