China agrees to drop WAPI standard

IDG News Service - The government of China has agreed to suspend indefinitely its proposed proprietary national standard for wireless LANs in light of objections from the U.S. government and IT vendors, U.S. and Chinese officials announced Wednesday.

The standard, called Wireless LAN Authentication and Privacy Infrastructure (WAPI), was scheduled to be adopted as a mandatory security measure in China on June 1, but Chinese officials agreed to work with international standards bodies instead after meeting with U.S. trade officials Wednesday.

China will work to revise the WAPI standard, taking into account comments received from Chinese and foreign IT firms, said U.S. Trade Representative Robert Zoellick. China now has no deadline on implementing WAPI, Zoellick said at a joint press conference with China Vice Premier Wu Yi.

Zoellick and Wu didn't comment further on the WAPI agreement, which was one of several trade agreements the two countries signed Wednesday.

"Between our two countries, trade needs to be a two-way street," Zoellick said.

The mandated Chinese standard has caused concern at international electronics companies because details of the standard have been shared with only a handful of Chinese equipment makers, leaving foreign companies the option of either licensing the technology though agreements with Chinese vendors or staying out of the Chinese market. Electronics vendors worried that WAPI could have fractured the WLAN equipment market.

Intel Corp. praised the WAPI agreement. China's decision on WAPI "demonstrates its commitment to leadership in the IT industry," said Intel spokesman Chuck Mulloy. "Intel commends the governments of the People's Republic of China and the United States for their patience, persistence and flexibility in working through this very important and complex issue."

The two countries didn't resolve a continuing dispute over Chinese taxes on semiconductor chips during the 2004 meeting of the U.S.-China Joint Commission on Commerce and Trade. A value-added tax of 17% is levied on sales of all semiconductors in China. The Chinese government gives most of the tax back in a rebate for certain chips manufactured in China. The resulting effect is a 17% tax on imported semiconductors and a 3% tax on domestically made chips.

In March, the U.S. government filed a complaint with the World Trade Organization over the chip tax. Dispute settlement consultations will continue in Geneva the week of April 26, Zoellick said.

"As always, we prefer to solve problems without litigation if possible," he said.

During Wednesday's talks, Chinese officials agreed to step up their enforcement activities to fight intellectual property piracy, and they said they support technology neutrality in the adoption