There is a popular saying in China’s industrial circle that “third-tier enterprises make products, second-tier enterprises make technology and top-tier enterprises make standards.”

China has mastered manufacturing, and they are competing alongside Western companies in mobile and AI technology, leaving the top-tier — standard setting — as the means for influencing the global economy through the adoption of their systems and processes.

China has had some success, but standard setting is still dominated by the North Americans and Europeans.

China is using the Digital Silk Road, part of their Belt and Road Initiative, to further their goals of leading international standard setting.

China’s Belt and Road Initiative is a series of infrastructure projects to build railroads, highways, pipelines and shipping ports connecting China to Asia, Africa, the Middle East and Europe. Early attempts at standard setting focused on engineering and construction sectors, such as electricity, transport and energy. However, the progress China made in these areas is not very impressive.

The Digital Silk Road looks to extend China’s domestic technology out into BRI countries and create the means for economic growth in the digital economy by ensuring interoperability and data flows in areas of mobile network technology like 5G, the Internet of Things and artificial intelligence, to name a few.

This is where digital standards become important. If China can convince the international community to use their standards, then its domestic businesses will benefit economically by the standards and patents they hold, and China will be able to chart the future of technology development.

China has established five key tactics for achieving their goals to become the next standards leader:

First, they are actively putting forward proposals for international standards.

Second, they are promoting the establishment of new technical committees or subcommittees within international standard-setting organizations.

Third, they have introduced China’s Standards Mutual Recognition Working Procedure to sign more standards cooperation agreements with other countries that wish to do business with China.

Fourth, they are encouraging Chinese institutions and enterprises, particularly giant and advanced enterprises, to participate more actively in international standard-setting organizations. Huawei, for example, is a leader in 5G patents and standards adoption globally.

And fifth, China is listing their domestic standards as preconditions when making contracts and carrying out China’s foreign aid programs.

Standard setting and the Digital Silk Road is very much an economic project, more so than a geopolitical move.

But with the number of partner countries involved in the BRI, China’s moves in digital standards are having impacts globally, which shift the balance of power from Western tech giants.

I encourage you to read my paper, which goes into much more detail on many key aspects of China’s standards and the Digital Silk Road.