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China challenges Intel: WAPI vs. 802.11i fight resumes

There is a fight brewing between two forces of roughly equal strength: China and Intel. The Chinese government is actively seeking support from other nations to help break Intel's domination in the wireless broadband market. The way China wants to do it is to create a coalition of countries to support China's home-grown wired authentication and privacy infrastructure (WAPI) as an alternative to some aspects of WLANs. WAPI is a solution to the security loophole of the existing 802.11 standard. More specifically, it offers direct competition to 802.11i, which is dominated by Intel. WAPI technology is waiting for final voting on March 7 to determine whether it is adopted as the international standard.

"We are sure to vote for WAPI and reject 11i'," an official with the Standardization Administration of China (SAC) said. Developed by IWNCOMM, a private company in Northwest China's Xi'an city, WAPI has attracted some attention for the security it offers wireless networks. "If you agree with China that security is of utmost importance in the ballot, then vote for WAPI and reject 11i,'' says a document China circulated to International Standard Organization (ISO) members, seeking support for its position.

For more on China's WAPI move:
- see this report

BACKGROUND: This is the second round in the WAPI fight. The first round ended in April 2004 with a Chinese retreat. In 2003, China said that by December 2003 all WLAN gear makers selling WLAN equipment in China would have to incorporate WAPI in their products. Under intense international pressure, China agreed to extend the original deadline to June 2004. Most non-Chinese companies saw the Chinese move as having little to do with WLAN security and everything to do with China's richly deserved reputation as a prolific and capable serial thief of industrial secrets. The Chinese not only insisted that WAPI be incorporated into WLAN gear sold in China, they insisted that the integration of WAPI into non-Chinese gear be made by 14 Chinese companies (the number was later increased to 22) designated by the Chinese government. Many of these companies had intimate connection to, or were even controlled by, the government.

Western industry leaders and analysts saw the Chinese move as a straightforward, and not even cleverly concealed, effort by the Chinese government to facilitate a way for Chinese companies to have ready access to the most intimate engineering and design details of WLAN products made by leading non-Chinese companies. As has often been the case in many other industries, Chinese companies incorporate Western technology into their own products without permission or license and then compete in the West with the very same companies whose secrets they stole. Wireless industry leaders, as well as the U.S. and European governments, were unwilling to give in to China on the WAPI issue and exerted relentless pressure on the Chinese. Intel, Broadcom and other companies announced that they would stop doing business in China altogether. The Chinese finally relented and agreed to postpone the imposition of a mandatory WAPI integration "indefinitely." As we wrote a few weeks ago, it appears that, in Chinese, "indefinitely" means two years.

What a difference two years make. China is now richer, more powerful and more confident. As the Lenovo-IBM deal shows, it has been aggressively pushing to extend its presence in high-tech markets. It has now come out of its corner and is ready to fight the WAPI battle all over again. The latest move by China also shows that it is not only good at stealing industrial secrets, it is also good at emulating Western PR and presentation practices. China now says WAPI is all about WLAN security, and it may well get away with it this time. Stay tuned.

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