China Roils Wireless Industry With New Encryption Standard
China, putting the global technology industry in a tizzy, has unveiled a homegrown technique for keeping mobile wireless data secure and ordered computer makers to use it.
A new policy, which sets China's own encryption standard, took effect Monday. It applies to wireless local area networks that allow high-speed, wireless Internet connections within a fixed area such as an office or a Starbucks outlet. The policy requires any such equipment that is imported into China or sold here to conform to Beijing's new encryption standard, which differs from global standards.
Encryption is a broad term describing methods of safeguarding information on data networks by disguising it. For a wireless Internet hookup, which offers an easier target for hackers than connections via landlines, encryption is particularly critical.
Although the new policy provides a six-month grace period for certain goods in the small but fast-growing sector, it is already having a ripple effect across the industry. Dell Inc. said it anticipates halting shipments of affected products to China when the grace period ends. Other major industry players, from U.S. chip giant Intel Corp. to Japan's Sony Corp. to Chinese hardware manufacturers such as Legend Group Inc., are scrambling to figure out the potential impact on their business. U.S. industry groups have been lobbying Chinese and U.S. policy makers over the issue.
Wireless networking isn't the only technology for which China wants to set its own standards. Chinese policy makers hope to use homegrown technical standards to generate demand for Chinese innovations world-wide, and are adopting or considering unique standards for third-generation cellphones, DVDs and electronic imaging technology for cellphones.
The new encryption standard seems certain to further heat up simmering trade tensions between the U.S. and China on the eve of Chinese Premier Wen Jiabao's first visit to America, which begins Sunday. The furor that the new standard is generating also shows how integral China has become in the global production chain.
Are the new standards "superior or just gratuitously different?" asked a Western consultant in Beijing who advises several multinational technology companies, adding, "Is this protectionism by another name?" An industry executive said: "We are concerned that government regulators world-wide and companies continue to enable the growth of this important and powerful new technology."
Liu Chaoyang, a director of the Chinese group that drafted the new standard, denied the measure was launched as a "technical barrier" against foreign equipment vendors. He said China designed its own standard to protect national security, as wireless LAN networks are prone to attack and the international standards in current use have holes. He added that products made in China for export won't have to comply with the new standard.
As in the U.S., China's market for Wi-Fi, or wireless fidelity, is growing quickly. Industry executives estimate that total sales will hit 600 million yuan ($72.5 million) this year, and could reach $500 million by 2005. Of this year's total, equipment sales by multinationals are expected to double from 2002's level to 308 million yuan, said Lu Guoying, a telecom analyst with CCID Consulting.
Regulatory Uncertainty
Industry executives expressed concern that the new standard could cut market growth, although they are uncertain because Chinese regulators haven't given details on how to implement it. The Japanese Chamber of Commerce and Industry in China has set up a group to study the issue that includes companies such as Sony and NEC Corp.
"We're not sure how this will affect these companies, but we are afraid that the companies won't be able to manufacture and won't be able to sell PCs in China," said chamber Secretary-General Yasunao Komatsu.
Dell China also is studying the new standard, a company spokeswoman said. "According to our current understanding of the guidance, we will have to stop shipments [into China] altogether" of both Intel's Centrino and its own TrueMobile Wi-Fi technologies as of June 1, she said.
Chuck Mulloy, an Intel spokesman, said the grace period would allow Intel to continue to export its Centrino technology to China, its second-largest market in terms of total sales, for now. "In the longer term, we really need to study the requirements and the technical aspects" of the standard. He said industry groups are "working with authorities to better understand the requirement and to see if we are headed down the right path."
U.S. trade officials also have weighed in, with visiting Commerce Department officials and Deputy U.S. Trade Representative Josette Shiner bringing up the issue in separate meetings with Chinese regulators recently.
Domestic Expansion
Some Chinese companies see opportunity in the new standard. Beijing LHWT Microelectronics Inc. supplies broadband chips for wireless LAN equipment manufacturers. Most of its clients are foreign companies that sell products overseas, but Zheng Jing, a Beijing LHWT marketing executive, said his company has decided to expand into the domestic market because of the new standard. "It will help us to ward off foreign competitors in the domestic market," he said. "We will have a bigger market. It's all good for us rather than anything bad."
A Legend Group executive said the new standard is "very helpful for domestic equipment suppliers" and could mean "a turnaround for domestic vendors who are now lagging behind foreign rivals."
In 1999, China attempted to regulate different encryption standards by imposing a blanket ban on products containing foreign-designed encryption software that affected everything from e-mail systems and mobile phones to Internet networking equipment. The move sparked an outcry and open defiance from foreign companies. The strong response forced China to back down. In 2000, it reissued regulations and narrowed the ban to a type of highly specialized encryption software.
中国无线技术加密标准引发业界慌乱
中国已自行推出了适用于一项新的热门无线技术的加密标准，引起全球业界一阵慌乱。
从周一开始生效的这一新政策适用于无线局域网，此种网络允许在办公室或星巴克(Starbucks)咖啡厅等特定区域内使用高速无线互联网连接。新政策要求，中国进口的或在中国销售的所有无线局域网设备，都必须符合中国政府推出的这一与全球标准不同的新加密标准。加密对于无线互联网连接来说至关重要，因为此种连接较经由地线的传统连接方式更容易受到黑客攻击。
虽然新政策为规模较小但发展快速的无线互联网行业的某些产品提供了6个月的宽限期，但该政策已在整个行业引起连锁反应。戴尔公司(Dell Inc.)称，预计宽限期结束时，公司将暂停向中国发运受此政策影响的产品。业内其他大型公司，从美国晶片巨头英特尔(Intel Corp.)到日本的索尼公司(Sony Corp., 又名:新力公司)，再到联想(Lenovo, 曾用名Legend Computers)等中国硬件制造商，都急于了解新政策对其业务的潜在影响。美国的行业团体已出面就此问题游说中国和美国的决策者。
中国希望制定自身技术标准的领域还不仅仅局限于无线网络技术。
中国决策者希望自定的技术标准能为中国的新技术带来全球需求，他们已经或正考虑为第三代移动电话、DVD和用于移动电话及数码家庭的电子成像技术制定自己的技术标准。
在中国总理温家宝下周首次访美前夕，上述无线技术新标准必将令中美两国间的贸易紧张局势进一步升温。新标准引起的骚动也显示出中国在全球生产链中是如何的不可或缺。
一位在北京为数家跨国技术公司提供咨询的西方顾问发出这样的疑问：中国制定的这些新标准究竟真的是技高一筹呢还仅仅是毫无理由的别出心裁？业内一位高层管理人员也说，这是不是改头换面的贸易保护主义呢？人们担心世界各国监管当局和公司能否继续保持无线局域网这项重要新技术的发展。
中国这项新标准起草小组的负责人刘朝阳(Liu Chaoyang, 音译)否认推出此标准是旨在将其作为针对外国设备销售商的技术壁垒。他说，中国设立自己的标准是为了保护国家安全，因为无线局域网容易受到攻击，而现行国际标准存在各种漏洞。他还称，中国生产的出口产品不必遵循新标准。
与美国的情形相同，中国的无线保真技术(wi-fi)市场规模也较小但发展迅速。业内人士预计，今年该市场总销售额将达人民币6亿元（合7,250万美元），2005年将增至5亿美元。赛迪顾问(Ccid Consulting)的电信业分析师吕国英认为，思科系统(Cisco Systems Inc., 简称：思科)和诺基亚(Nokia)等跨国公司今年的设备销售总额预计将较2002年增长一倍，至人民币3.08亿元。
虽然中国监管当局尚未公布新标准的实施细则，但业内高层管理人士担心，新标准会抑制无线局域网市场的发展。中国日本商会(Japanese Chamber of Commerce and Industry in China)已成立一个特别小组专门研究新标准问题，小组成员包括索尼和日本电气公司(NEC)等日本IT企业。商会秘书长Yasunao Komatsu说，尚不清楚新标准将对日本IT企业造成何种影响，但该商会担心这些企业将不能在中国制造和出售个人电脑。
戴尔中国公司(Dell China)的发言人称，公司也在研究新标准。她说，根据公司目前的理解，到明年6月1日，公司将不得不停止向中国发送使用英特尔Cetrino技术及戴尔自身TrueMobile无线保真技术的产品。
英特尔发言人Chuck Mulloy称，宽限期使得公司能继续向中国出口其Cetrino技术产品。就总销售额来看，中国目前是英特尔的第二大市场。他说，长期来看，公司的确有必要研究新标准的要求和技术特征。 他还说，行业小组正与监管当局合作，以便更好地理解新标准，并确定公司沿著正确方向前进。
美国贸易官员也已介入，近期来访的美国商务部(Commerce Department)官员和美国贸易副代表Josette Shiner都曾在与中国监管当局的会谈中提及此事。
一些中国公司看到了新标准带来的机遇。北京六合万通微电子技术有限公司(Beijing LHWT Microelectronics Inc)主要为无线局域网设备制造商供应宽频晶片，该公司的客户目前大多为在海外出售产品的外国公司，但该公司的营销主管郑京(Zheng Jing, 音译)称，由于新标准的原故，公司已决定将业务拓展至国内市场。他说，新标准将有助于公司避开国内市场的外国竞争者，公司将得到更大的市场，新标准对公司有益无害。
联想的一高层管理人员称，新标准对国内设备供应商非常有帮助，对现在落后于外国同行的国内销售商可说是一个转机。
中国上一次尝试自订技术标准是在1999年，当时它禁止了所有含外国设计加密软件的产品在华销售，此举影响到从电子邮件系统到移动电话再到互联网网络设备的众多产品，外国公司对此提出强烈抗议并公然加以违抗。中国政府被迫让步，于2000年3月重新发布监管规定，将禁售对象缩小至一种专业性很强的加密软件。
