Standards battle holds up Chinese revolution

While China's reputation as a tech manufacturer goes from strength to strength, in terms of getting technology into the hands of the man on the street, it's still way behind.

The key hold-up is the Chinese government's unease about relying on Western technology standards, preferring to develop its own domestic equivalent. The battle over international standards is currently raging over the MPEG format and the world of mobile 3G technology.

China's drive to create an alternative to the MPEG format has already gained support from heavyweights like Microsoft and IBM and the new format will be standard across the country by 2004, according to a report by Dow Jones.

Unsurprisingly, the quest for a new audio-video compression standard is all about money, with Bejing unwilling to pay the fees that the MPEG Licensing Authority charges. The specially developed Chinese format will cost users a mere one yuan – around eight pence – per device, significantly lower than the charges for using the MPEG standard.

A similar argument is weighing down the roll-out of 3G in one of the world's largest 2G markets.

When it comes to issuing licences for third generation technology, Bejing is keeping its cards close to its chest.

The launch of third generation technology will also involve the adoption of a 3G standard, but with three possible contenders lining up to get their hands on the honour and a decision still pending, mobile operators are dubious about investing in the technology, fearing their profits will be hampered if they're landed with a standard that will only work in China.

Staff from CNET Asia contributed to this report