Telecommunications: Primacy of Power and Regulatory Battles for Promoting National Standards - Part 18

More importantly, strong competition from WCDMA and CDMA 2000, with their well-established subscriber bases, could curtail adoption.

The third concern is the continuous dilemma of how to balance the proper roles for government in terms of supporting standards-setting and commercialization and the market responsiveness of enterprises. Edward Steinfeld argues that more interventionist approaches to industrial policy are fiercely contested by those who prefer that the market play a more central role (Steinfeld, 2004). So far the state has been the leading actor pushing for the success of the TD standard. The interest, intention, and diverse sources of initiatives of other actors involved have been undervalued by the Chinese government, including operators, vendors, domestic manufacturers, etc. For instance, China Mobile, with its GSM infrastructure, could have opted for an easy 3G upgrade by choosing WCDMA technology. In 2006 China Mobile Chief Executive Officer Wang Xiaochu reportedly stated that his company was unlikely to pick TD as a standalone technology for 3G (Morse, 2006). Later, the Ministry of Information Industry also rejected a plan by China Mobile to adopt both WCDMA and TD standards. Obviously China Mobile has accepted its mission to develop the TD standard with great reservation. Recently, China Mobile chose to use “nationalism” as a marketing tool for their TD cell phone. They have repeatedly used such rhetoric as “the development of TD with my support” (TD Fazhan, youwo zhichi) on their TV advertisements. Another example is Huawei, China's leading telecom equipment manufacturer. It has successfully expanded to overseas markets by selling products based on the two dominant standards. Throughout its manufacturing, IPR has already been established internationally by owning dozens of important patents associated with those two standards. New government-supported initiatives for distinctive Chinese standards may not be welcomed by such globalized firms who have reaped the benefits of technoglobalism. By contrast, other Chinese manufacturers who have heavily focused on the domestic market will benefit considerably from China's distinctive home-grown standards.

The Chinese government has made it a priority to ensure that the home-grown TD standard flourishes. Administrative intervention, policy support and financial aid have proved effective for cultivating this relatively new and immature standard against today's largely stable standard. The follow-up question is that after the issuance of 3G licenses, to what degree will government support facilitate the development of the TD standard without impeding healthy market competition? With pressure from the United States and EU, China is less likely to give up any of the two dominant standards endorsed by them.

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