China to call the shots in tech?

Communist state could be boss of global tech... even Microsoft.
Written by Tony Hallett, Contributor
The size and ambition of the Chinese tech market will in the future mean it doesn't determine only the standards that get used in that country but those that get green-lighted around the world.

In research considering China's moves in areas such as operating systems, RFID tracker chips, entertainment media beyond DVD and mobile and satellite communications, professional services firm Deloitte reckons the rest of the world should take note.

David Tansley, partner for Deloitte's Technology, Media and Telecommunications practice, said: "So far there has been a focus on the Chinese market in terms of its growth but that will then impact on the adoption of technology standards in other marketplaces.

"Even if a company has no involvement in China, China will affect what it does elsewhere."

Although China has in many cases backed international standardisation, in areas such as RFID, for example, it has in some cases already caused consternation in tech vendor boardrooms as it has mandated certain technical specification peculiar to its geography. This happened at the end of last year with Wi-Fi security, causing some to think the domestic standard would have a ripple effect on what ultimately gets shipped in the rest of the world.

In third-generation mobile (3G), China has worked with Germany's Siemens to develop its own standard. It is called TD-SCDMA and, while not as advanced as the two other main standards, W-CDMA and CDMA2000, the three look set to end up sharing the world's largest mobile market from as early as next year.

Tansley said: "It's clear that when it comes to 4G, China will be smarter. It will have the know-how to develop a standard or it will carefully (again) seek a friend among Western companies."

In the past, other countries have tried to mandate certain standards; for example, France. However, what makes China different is something quite simple--its size.

Now, according to Deloitte's research, it is even possible that China and other governments developing, for example, Linux in East Asia could mean R&D investments from Sun and other companies in China translating into products that challenge Microsoft on the desktop around the world.

Already Microsoft is developing a cut-down version of Windows XP for China and it may ultimately be sold outside that country.

Silicon.com's Tony Hallett reported from London.

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