Three big wigs in the Bush administration sent a letter to China's deputy prime ministers urging them to back off the plan to ban Wi-Fi gear that doesn't include a Chinese-made proprietary encryption standard: The letter came from Secretary of Commerce Donald Evans, Secretary of State Colin Powell, and U.S. trade representative Robert Zoellick. Last year the Chinese government released its proprietary standard, known as WAPI, to a group of Chinese companies and said that any foreign company that wanted to sell Wi-Fi gear in China would have to work with those companies to include WAPI in the products. Foreign companies fear sharing their intellectual property with Chinese competitors and would prefer to use standard gear around the world to realize cost savings.
This article points to Britain and the United States as nations that have set technical standards in a similar way but I'm hard pressed to come up with examples. Some U.S. cell carriers built networks based on CDMA, a standard created by Qualcomm, instead of the worldwide GSM standard but that choice was in no way dictated by the government and of course some other carriers here opted instead for GSM. European governments have dictated that operators there use GSM but GSM is a worldwide standard--there's no nation that insisted on a proprietary tweak to it within its borders.
The story points to analysts who say that in requiring WAPI China is trying to take its turn as a standard-setter. But forcing companies to do something isn't the way standards are set. They're set by consensus among industry leaders and companies follow them by choice.
In other news of pressure to the Chinese government over WAPI, Pat Gelsinger, the CTO of Intel, plans to meet with Chinese officials to talk about the requirement. Clearly the requirement would affect Intel which would have to alter its Centrio chips, for example, to accommodate for WAPI in order to sell products to the Chinese market.