A recent report by Chinalabs, a domestic IT counselling firm, has shed much needed light on the necessity to sort out China's standards policy.

The paper entitled "Neo-Globalism: China's High-Tech Standards Strategy Research Report," allows for a rarely-heard non-governmental voice to speak out on one of the key global issues the Chinese Government must respond to.

Yet, by overstating the urgency to grasp the commanding heights of technical standards, the report has made some suggestions that are not pertinent to China's reality.

In a sense, the report can be seen as part of the growing global chorus of "discontent with globalization."

It justly condemned multinational firms' manipulation of the unfair international standards in order to thwart competition in developing countries.

Such criticism can easily win the attention of a large domestic business audience.

Many Chinese companies have found themselves increasingly caught up in disputes related to patents or technological standards as the nation opens further according to its commitments to the World Trade Organization (WTO).

For instance, China-made DVD players were impounded in European ports in 2002 for failing to pay for the patents used.

The exorbitant fees that foreign patent holders, usually multinational firms, have demanded have bitten so deep into domestic manufacturers' pockets that many of them have been forced out of the market.

A recent case was the dispute over China's attempt to introduce WAPI encryption technology as its standard.

Due to strong protests by the US Government and industrial circles, the WAPI encryption standard has now been postponed indefinitely.

Such cases have kindled a sense of frustration among domestic businesses as well as a wide-ranging debate about China's development strategy, particularly in the high-tech field.

This is surely one of the defining debates of our time.

Since China embarked on the road of reform and opening in the late 1970s, a "market-for-technology" strategy has been widely implemented to accelerate the country's absorption of foreign investment. It virtually became the consensus that foreign capital accompanied with advanced technology would be a great boon to the Chinese economy.

The country's lasting growth miracle over the past two decades has incontestably endorsed such a "market-for-technology" strategy.

Over these years, many domestic enterprises had co-operated with foreign companies in tapping the great potential in the domestic market.

But these happy days are now a thing of the past.

After China's WTO accession in late 2001, the influx of foreign investment has conspicuously increased, but this has not been reflected by an increase in link-ups between domestic and foreign firms.

With wider and freer access to the Chinese market, multinationals are shifting their focus from sharing the market with their Chinese partners to grabbing as big a slice of the market as possible.

Consequently, domestic market competition became white-hot.

Equipped with better financing, management and technology, multinationals have made the most lucrative part of the market, such as the high-tech product market, their prime target.

Competition pressure has driven domestic high-tech companies into such a tight corner that some are even crying for government support.

The situation definitely requires pause for thought from Chinese policy-makers.

Obviously, "techno-nationalism" is not an option.

A key reason why Chinalabs' report advocates a "neo-techno-globalism" instead of techno-nationalism is just because it is too expensive to develop high technologies without global co-operation nowadays.

The report highlighted the vital importance of technical standards in promoting technological development, especially in the promising information and communication industries.

And its call for a due voice for developing countries in the drawing up of international standards is also appropriate in terms of the current international order.

The report has also correctly urged the Chinese Government to play a pivotal role in involving more domestic enterprises in drawing up the country's technological standards while encouraging international co-operation.

However, drawing too much from its review of the "market-for-technology" policy, the report has gone too far in challenging the underlying development strategy China has adopted to climb up the ladder of comparative advantage.

In retrospect, we do find that the "market-for-technology" policy has not worked very well in some sectors.

The inefficiency of the policy was exemplified by the lack of independent technological research and development capacities of domestic automobile makers.

The government had strictly limited domestic competition for more than one decade in a bid to create favourable conditions for those few selected domestic automobile makers to learn technology from their foreign partners.

In sharp contrast with the booming car market in recent years, the poor performance of domestic carmakers in developing cars with self-owned intellectual property rights unfortunately proved the protective policy was a total failure.

Ignoring such failed "market-for-technology" practices is irresponsible, but exaggerating such failures may be equally mistaken, if not a more devastating error.

The fundamental driving force behind China's robust growth was and is the country's unique comparative advantage over other economies.

Though its per capita gross domestic product reached US$1,000 last year, the country as a whole remains poor in capital and rich in labour resources.

Therefore, to make the most of its cheap and skillful labour force, but not expensive technological innovation, will still be the best way to continuously increase the country's economic strength during its participation in the global economy.

The high-tech sector does reap a disproportionately large portion of profits from the international division of work. Chinese enterprises have a huge stake in securing a footing in the high-tech market.

Given the crucial role technical standards play in setting the pace for new technologies, it is natural that some domestic companies will try to enhance their competitiveness by promoting the country's own technical standards.

Moreover, in some specific sectors where national security is concerned, self-developed standards are often a must.

But an independent standard strategy itself is not a recipe for technological superiority.

It is misleading to promote a new standards strategy as a shortcut for Chinese enterprises' pursuit of technological clout.

The "market-for-technology" strategy has failed not because the country failed to import enough advanced technologies, but because domestic enterprises have not devoted enough to technological assimilation and innovation.

To build China into a technological power is a pressing task. But the work should and can only be done step by step and with full consideration of the country's actual technological capability, standards, industrial policy and the market.

Otherwise, more haste, less speed.

So, while capitalizing on the country's comparative advantages in labour-intensive sectors, a substantial increase in technological research and development input is what the country needs most.