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Viewing cable 06BEIJING14062, WHITE PAPER ON RFID TECHNOLOGY RELEASED

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Reference ID Created Released Classification Origin
06BEIJING14062 2006-07-05 05:24 2011-08-23 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Beijing
VZCZCXRO8799
RR RUEHCN RUEHGH
DE RUEHBJ #4062/01 1860524
ZNR UUUUU ZZH
R 050524Z JUL 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 0897
RUCPDOC/USDOC WASHDC
INFO RUEHCN/AMCONSUL CHENGDU 6702
RUEHGZ/AMCONSUL GUANGZHOU 0984
RUEHHK/AMCONSUL HONG KONG 7772
RUEHGH/AMCONSUL SHANGHAI 5175
RUEHSH/AMCONSUL SHENYANG 6486
RUEHIN/AIT TAIPEI 5788
RUEATRS/DEPT OF TREASURY WASHDC
RUEHGV/USMISSION GENEVA 1219
UNCLAS SECTION 01 OF 02 BEIJING 014062 
 
SIPDIS 
 
USDOC FOR DAS LEVINE AND 4420/ITA/MAC/CEA/MCQUEEN 
STATE PASS USTR 
USTR FOR STRATFORD/WINTER/MCCARTIN/GRIER 
USTR FOR MCHALE/WINELAND 
NIST FOR JILLA 
TREASURY FOR OFFICE OF INTERNATIONAL INVESTMENT 
TREASURY FOR OASIA/ISA-DOHNER AND KOEPKE 
GENEVA PASS USTR 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECPS PGOV ASEC WTRO CH
SUBJECT: WHITE PAPER ON RFID TECHNOLOGY RELEASED 
 
1. (SBU) Summary:  The recent release of the "White Paper 
on China's Radio Frequency Identification (RFID) Technology 
and Policy" has raised questions within both industry and 
government as to which path China will choose as it tries 
to develop yet another standard with world-wide trade 
implications.  Ms. Zhang Qi, Director of the Ministry of 
Information Industry's RFID Working Group told Econoff that 
it was not her plan to "force Chinese standards down 
anybody's throat." Companies that wanted, however, to 
import products into China would have to adhere to Chinese 
standards, just as they currently do with other countries, 
Qi said.   End Summary. 
 
 
2. (SBU) On June 9 2006 the Ministry of Science and 
Technology (MOST) with the concurrence of 14 "other 
Ministries and Commissions" released a document entitled 
"White Paper on China's RFID Technology and Policy".  The 
18-page white paper reviews the status of RFID technology 
and identifies sectors for development of RFID technologies 
and priority application.  The white paper calls on China 
to development its own RFID standards.  The white paper is 
very much a "broad brush" text that leaves questions about 
coordination with international standards unaddressed. 
(Note: A single world-wide standard for RFID currently does 
not exist, although the United States? EPC and Japan's UID 
are the most popular). 
 
China's RFID Standard-Friend or Foe? 
------------------------------------ 
 
3. (SBU) Given the ongoing dispute regarding China's effort 
to impose its own WAPI standard, the release of the white 
paper caused some consternation in the U.S. business 
community.  Wal-Mart indicated that any plan to force 
companies who export products from China to use a Chinese 
standardized RFID tag would create serious cost overruns 
and distribution delays. 
 
4. (SBU)   Ministry of Information Industry (MII) RFID 
Working Group director Ms. Zhang Qi pointed out to Econoff 
that in contrast to the wireless encryption standard where 
there is worldwide accord, RFID standards are still in 
their genesis.  This means that China can play a crucial 
role in their development.  Acknowledging that the white 
paper stresses the importance of homegrown technologies and 
standards, Ms. Zhang said that that does not mean that 
foreign companies would be kept out of the development 
process.  She pointed out that the seven working groups she 
heads have already presented her with 27 proposals and that 
many of them were from American companies, including 
Microsoft, Hewlett Packard and Compaq.  She added that she 
is more than happy to work with nternational organizations 
such as ISO, and welcomed input from foreign RFID 
associations and organizations.  She underlined her belief 
in the transparency of the process and referred to her 
personal website where she outlines many of her views.  Ms. 
Zhang was particularly keen to hear from American 
associations and industry and was open to Econoff's 
suggestion that USG agencies that directly deal with RFID 
issues visit her. 
 
5. (SBU) Asked why China did not choose an existing 
standard, Ms. Zhang said that the subscription fees alone 
make this option prohibitively expensive as millions of 
Chinese vendors would have to pay EPC or UID fees to use 
their standards.  (Note: EPCglobal's standards are 
available for free on their web-site. Those who want to use 
EPCglobal's system have to pay a subscription fee to be 
assigned a series of electronic product codes which are 
uniquely their own. The subscription fee is on a sliding 
scale and depends on the size and revenue of the company. 
End Note). A homegrown standard, however, could offset 
those costs whilst also meeting the white paper's stated 
 
BEIJING 00014062  002 OF 002 
 
 
goals of homegrown technological innovations and the 
creation of Chinese RFID standards.  Ms. Zhang responded to 
a question about interoperability by saying that China has 
no intention to force foreign companies to use Chinese 
standards when products and goods are being exported from 
China and that individual companies could use whatever RFID 
technology they wished (Note: For example Wal-Mart which 
exports over USD 20 billion of goods from China per year 
has mandated that its top six hundred vendors would have to 
use EPC's RFID standard by the end of 2006).  She went on 
to say that any company that is importing goods into China 
and/or those that do business domestically would have to 
use the Chinese standards. 
 
Comment 
------- 
 
5. (SBU) Ms. Zhang is a plain-speaking, forceful 
interlocutor who is clearly eager to interact with foreign 
visitors and allay fears about China's intentions regarding 
RFID standards.  It is encouraging that such a leading 
figure in RFID development wishes to engage with the 
international community at this early stage in China's RFID 
development. 
 
Randt