The Chinese are coming

Up until now the United State’s has been the world’s undisputed technology powerhouse, but recent rumblings from an eastern land suggest that the technology world is going to have to come to terms with the influence of an increasingly confident China, sooner rather than later.

Given the frenetic growth of the Chinese economy it was inevitable to happen at some point, but new figures from the Organization for Economic Cooperation and Development (OECD) show that China has overtaken the United States as the world’s biggest supplier of electronic goods.

In 2004, Chinese technology exports totalled $180 billion, compared to the United States’ $149. Lenovo’s takeover last year of IBM’s personal computer business is perhaps the most graphic example of China’s new found importance.

But China’s ambitions extend far beyond being a low cost manufacturer of computer hardware. The country is seeking to use this new-found economic muscle to break the developed nations’ stranglehold on the development of technology standards and so play a more active role in the setting of the high-tech agenda for the benefit of its own technology industry.

Only last week the People’s Daily reported that the Chinese government’s Ministry of Information Industry (MII) has given the go ahead for the use of the AVS audio-video coding standard that was developed, ostensibly so that Chinese companies would be spared the burden of paying for MPEG patent licensing, and which will form part of the country’s rival to the forthcoming HD-DVD standard.

This is just one example of China looking to develop its own technology standards, with other examples ranging from operating systems to its own 3G standard, TD-SCDMA. China’s game plan is to build up support for these standards amongst Chinese consumers and then export these standards to surrounding countries in south East Asia and beyond.

This is one of the reasons why companies such as Nokia, Microsoft and Cisco are so keen to invest in China. The prospect of tapping the China market has been a draw for powerful western companies ever since the days of the Opium Wars, frequently for very little gain, but this time the stakes are much higher.

By investing now, these western technology giants hope to build up support amongst Chinese companies and consumers so giving them a greater chance of promoting their own standards.

Why should you care you may ask? Well competing standards are bad news for users and consumers, not just for business - just think of Betamax vs VHS. How the established technology players handle the growing influence from China will be vital if we are all to share in a common technology future.