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Draft Chinese Guidelines for Industrial Standards for the Internet of Things

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On January 15, 2021, the Ministry of Industry and Information Technology (MIIT) announced guidelines (draft) for building a basic security standard system for the Internet of Things, and gathered public opinion until February 14, 2021. It was.

The Internet of Things (IoT) can be defined as a network of physical objects that incorporate sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the Internet.

The draft aims to build and develop an IoT basic standard system that will be implemented in two phases.

By 2022, the system will be established, at least 10 industry standards will be drafted, and the defined security requirements will be clarified.

By 2025, more than 30 industry standards will then be drafted to improve the security level of IoT cross-industry applications.

5 main criteria

Considering the impact of IoT on daily life and the rapid increase in connected devices, the urgency of setting standards is clear. Data exchanged through the device must be securely managed, processed, transferred, and stored.

In this regard, it is important to establish a unified standard so that the technology can be built for use in different products designed by different companies. In other words, this makes technology products scalable because they can be designed, produced, and used around the world. Industry standardization is essential to globally guarantee device interoperability.

Regarding the basic security standards for IoT, the draft emphasizes that they primarily refer to the security standards for key basic link IoT terminals, gateways, and platforms.

The draft identifies five key standards in the IoT Basic Security Standards System: general security requirements, terminal security, gateway security, platform security, and security management.

For each of these standards, the draft provides key standardization areas and directions. These can be summarized as follows:

Under general security, draft requirements consist of guide standards for IoT basic security systems, including basic security terms, architectural models, security scenarios, security integrations, security classifications, application standards, and security protocols. ..

Terminal security standards are standards that apply to the basic security systems of the IoT. This includes card security, module security, communication chip security, general device security, industry device security, device testing, and evaluation criteria.

Gateway security standards include IoT gateway device security, data exchange and processing security, communication and interface security, physical environment security, component security, testing and evaluation.

IoT platform security standards include general platform security, platform business system security, platform interaction security, and platform testing and evaluation.

Security management standards are primarily used to guide the industry to implement common security management requirements, including security information coordination, security management and maintenance, and certificate management standards.

The Chinese government will rapidly develop the above standards while allowing the IoT basic standards system to be updated to meet the needs of such a rapidly changing industry. In addition, the implementation of IoT basic standards will find established support and promotion mechanisms at both national and local levels. In addition, the draft stipulates international cooperation between China and other countries in setting basic security standards for IoT and encourages China’s active participation in the development of international standards for IoT security.

Opportunities and Challenges in China’s Innovation Sector China Standard Plan 2035

The need to provide standards in the innovation technology sector, more specifically in the IoT, is highlighted in China Standards Plan 2035. The plan will allow the Chinese government and major technology companies to set global standards for emerging technologies such as IoT and 5G. Internet, artificial intelligence, etc.

Read in conjunction with the Made in China 2025 Strategy, China Standards Plan 2035 aims to be a leader in technological innovation with the aim of achieving technology self-sufficiency and developing the ability of Chinese companies to design and manufacture high-tech products. Indicates the intention of. Not only set the relevant criteria.

Setting technical standards retains the significant value that enables interoperability between devices and their usability around the world. The international panel has long been dominated by Western nations, and China is keen to change the status quo in the future. Nokia Corp. And Qualcomm Inc. Technology giants like this make billions of dollars a year from patents used by rivals that make smartphone systems. Beijing wants to make sure that the technology it develops is designed to match standards.

A recent article published by The Wall Street Journal states that China has national funding and political influence to take the lead in setting the technical standards for organizations that rely on cutting-edge technology, especially 5G networks. I reported on the channeling of. From the treatise: Chinese authorities lead at least four global standards bodies. According to official documents, Beijing and local governments are providing up to 1 million yuan (about US $ 155,000) in annual benefits to companies leading the development of global standards, while Western funding is declining.

According to recent information from the Ministry of Industry and Information Technology (MIIT), 90 companies in China have proposed a secretariat to the China Institute of Electronic Standardization and submitted a joint application to establish a National Integrated Circuit Standardization Technical Committee. went. This is a relatively vulnerable area for China, as the industry relies on access to US technology and is home to small businesses. 90 Chinese companies include Huawei, HiSilicon, Xiaomi, Datang Semiconductor, Unichip Microelectronics, Zhanrui Communication, ZTE Microelectronics, SMIC, Datang Mobile, China Mobile, China Unicom, ZTE and Tencent. Through the committee, these companies will strengthen cooperation between weak industries.

Encourage foreign investment in technological innovation

Last year, China’s new infrastructure program evolved into a strategy to stimulate job creation and achieve two goals: to prepare for new changes in the global economy, especially in the areas of technology and sustainable development. Foreign investment opportunities are engraved in state policies and incentive schemes for business stakeholders to participate in this next stage of China’s development, including industrial internet, new energy vehicles (NEV), artificial intelligence, etc. The major segments have been liberalized.

In particular, China has a wide range of advantages in supporting integrated circuit (IC) and software industry tax incentives, favorable financing, IP protection, R & D, import / export, human resource development, etc. to attract foreign knowledge. Developed the policy. How. Following this, the legal system for strengthening the safeguards for intellectual property protection was amended.

Among other industries where foreign companies are encouraged to invest in China, it is worth mentioning the opening of the automotive industry, including the manufacture of NEVs. The joint venture (JV) restrictions on passenger car manufacturing regarding capital adequacy ratios and the maximum number of JVs that foreign investors can establish in China shall be lifted nationwide in 2022.

Here, foreign investment in information and communication technology (ICT) to which the IoT is applied is permitted, but be aware that it is often difficult for foreign companies to secure licenses and meet other establishment requirements. give me. For example, many people find that regulations related to data management and cyber infrastructure are in favor of domestic companies. Therefore, they often choose the JV route to enter the Chinese market. In the future, it may be necessary to address these hidden barriers to direct and free market access.

Technology and innovation decoupling

In the technology sector, foreign companies now need to address the decoupling of innovation, including R & D and standards, and the decoupling of digital / Internet, including data governance, networking equipment, and telecommunications services.

Digital decoupling is affecting foreign companies engaged in activities related to ICT, telecommunications and networking equipment. They are struggling to enter the Chinese market and compete with Chinese digital and tech giants like Huawei. Foreign companies may also be subject to further restrictions under export control laws and related catalogs. (Here we provide a detailed analysis of export control laws that limit trade activities.)

Meanwhile, when it comes to decoupling innovation, concerns about standards and data are widespread throughout the EU. In fact, in fields such as machinery and chemistry where the contribution of foreign investors is important in terms of know-how and technology for Chinese companies to become independent, Chinese standards are consistent with international standards, but IoT The EU Chamber of Commerce, which is considered to be the core of China’s development, reports differences in standard settings.

EU companies operating within China’s digital sector report that they want foreign companies to participate in standardization efforts in China. These are standards that must be complied with globally as well as locally. This will also level the playing field between foreign and domestic players in the market. This is a consistent issue for many foreign companies. China had previously promised such inclusion.

about us

The China Briefing was created and created by Dezan Shira & Associates. This practice supports foreign investors in China and has been supporting them through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen and Hong Kong since 1992. I am. For assistance in China, please contact china @ dezshira.com.

It also maintains offices to support foreign investors in Vietnam, Indonesia, Singapore, the Philippines, Malaysia, Thailand, the United States and Italy, as well as operations in India and Russia and trade research facilities in line with the Belt and Road Initiative. There is.

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