The 3G standard setting strategy and indigenous innovation policy in China is TD-SCDMA a flagship?

In the time of “network economy”, industries and the public have stressed several “battles for dominance” between two or more rival technologies, often involving well-known firms operating in highly visible industries. In this paper, we are going to focus on the Chinese self-developed standard TD-SCDMA to perceive the implication and target of the nation’s policy and strategy. The motivation of the research starts from the interesting fact we observed: TD-SCDMA is named as the Chinese made standard, however the Chinese hold core patent technology is still about 7%, while most of the rest part is still taken by other foreign companies. The “faultage” between the small share reality and a self made standard sweet dream implies a well plotted strategy. In order to understand it, we firstly raise the question of why the Chinese government postpones the 3G decision again and again. Then we go further to probe why the standard-setting of TD-SCDMA has aroused wide attention as a strategic tool to fulfill “indigenous innovation”, and finally becomes part of national science and technology policy to increase international competitiveness? We are going to use economics theories to understand the essence of the creation of TD-SCDMA, and its relation to China’s interests.