September 12, 2005
RFID - the China angle
China does not appear too keen to agree to the EPC standards for RFID. This is because China already has its own extensive company identification codes and expects to be allowed to use them for trade. It appears that under the standard ISO/IEC 15459-1, it would be possible for China to do so. This standard relates to the procedures for instituting Issuing Agency Codes so that globally unique company ID codes can be recognized. There is some support for the Chinese view in the United States as well. Some observers feel that so long as the company code can be identified as unique, it does not matter if it is an EPC, DUNS, or a Chinese NPC.
It can be said in favor of the Chinese contention that the DoD, which has adopted RFID technology in a big way, uses different coding systems as a part of its supply chain. These codes are military codes, the IATA codes, the GS-1 codes, etc. The Chinese are also wary of using the EPCglobal system to share shipment information. Within China, it is not easy to arrive at a consensus because of the absence of a centralized decision making entity; there are different departments and ministries handling different aspects of RFID development and implementation. Paying heed to China's point of view may be necessary for the US because of the fact that China is a major trading partner and that the US had a trade deficit of $27.5 billion from January 2005 to May 2005. Many countries that have endorsed the EPC standards import heavily from China.
Another factor affecting the process of arriving at a global RFID standard could be China's decision to discontinue the linking of the Yuan with the Dollar. This may lead to a strengthening of the Yuan against world currencies including the Dollar, which may lead to an increase in prices of Chinese goods. If such a thing were to happen, it may result in buyers looking for cheaper sources and may weaken China's attempts to challenge the EPCglobal monopoly on RFID standards.
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