COPING WITH CHINA'S SAFETY STANDARDS DOESN'T HAVE TO BE TORTURE FOR EXPORTERS

COPING WITH CHINA'S SAFETY STANDARDS DOESN'T HAVE TO BE TORTURE FOR EXPORTERS

Reports from the telecommunications and high-tech industries indicate Chinese customs officials already are turning away products that haven't passed muster under new standards for safety and protection of the environment.

U.S. industry has major and concerns about these Chinese standards. Officials at the National Institute of Standards and Technology, as well as industry leaders, acknowledge they fear Beijing may be using the standards - as legitimate as they may be - as a means of entering foreign companies and pirating design and intellectual property.

I will discuss these concerns, as well as explore the economic and political ramifications of the Chinese standards, in future columns.

For now, because so many industries are affected by the new Chinese standards today, and because of the immediate threat they pose to U.S. exporters, this week's column will focus on the most efficient and cost-effective way of passing Chinese scrutiny.

As I mentioned in my Feb. 11 column, China's technical regulations apply to all kinds of products, from electrical and medical items to information technology, according to Stanley Warsaw, senior policy adviser for standards and technology at NIST.

Product categories affected include telecommunications equipment, electronics, fire alarms, medical devices, medical diagnostic X-ray equipment, electrocardiograph equipment, pacemakers, ultrasonic diagnostic equipment, boilers and pressure vessels, electric tools, audio equipment, appliances for heating liquids, cooking ranges, electric irons, food processors and computer hardware.

Because they have major investments in the Chinese market - including manufacturing plants - the telecommunications and electronics industries are at the forefront of earning what's called a CCIB (China Commodity Inspection Bureau) mark.

STANDARDS EXPERTS

OFFER ASSISTANCE

Standards experts from telecommunications giant Lucent Technologies - notably George Arnold, director of standards and intellectual property, and Tony Caggiano, technical and product safety standard manager - have offered to devote some time to advising companies on how to cope with what can prove to be a costly regulation if not handled correctly.

The first thing these experts advise is companies come to grips with the fact that the new Chinese regulations apply to both imports and exports. That means Beijing is imposing the standards on their own companies, points out Mr. Caggiano.

In Lucent's case, both he and Mr. Arnold say, only a small portion of their product line in China - telecommunications terminal equipment or telephones - is currently affected. But Mr. Caggiano believes that will change, as China already has announced plans to expand product categories under the safety standard mandate.

Although he doesn't consider himself the expert in this area, Mr. Arnold is clear about Lucent's position. Whenever Lucent is ''faced with these sorts of regulations,'' he says, ''we want to make sure we comply so we can do business. That's basically the mode we're in now.''

FIVE STEPS IN PROCESS

OF CCIB COMPLIANCE

Moving closer to the process, Mr. Caggiano outlined the five-step process companies must go through in order to have a telephone approved for a CCIB Mark. The steps are:

* Send a letter of intent directly to the China State Administration of Import and Export Commodity Inspection (popularly called SACI). For companies planning to deal directly with the Chinese market, it's possible to contact the supervisor of certification for China. NIST officials can produce the names of relevant contacts.

* Upon receipt of the letter, SACI will send back an application form. Companies have 40 days to complete the form. It must be completed in both Chinese and English.

* The next step is to send samples of the product to be tested to either one of the over 300 SACI test labs in China, or to a ''SACI-approved agency.'' Underwriter's Laboratories, for example, reportedly is actively involved in this process.

* Once you receive a satisfactory report from the test lab, you are allowed to apply the CCIB Mark to the product in question.

* Beijing then sends an inspector to your factory every six months for follow-up audits to make sure there have been no changes to the product that will affect safety.

Language is the ''biggest barrier'' Lucent has faced in complying with the CCIB Mark, says Mr. Caggiano. Although the company hires thousands of Chinese in their overseas plants, it has been dependent on translators to get the job accomplished, he says.

While this strategy works for Lucent, it could prove a problem for smaller companies, Mr. Caggiano contends.

As for the cost of earning the CCIB Mark, he says, it's ''very much a function of the size and complexity of the product(s). If you can afford to get a product UL-listed for this country, you can certainly afford it.''

Still, some high-tech companies with a greater number of product lines are reporting that earning the mark can prove to be quite costly.

AND, OF COURSE, THERE ARE

ALSO CCIB EXEMPTIONS

Mr. Caggiano also points out there are exemptions to the CCIB standard. For example, companies importing equipment into China in extremely small quantities for consumer use won't be required to earn the mark.

In addition, companies shipping components for manufacturing in Chinese plants won't face the mandate, since the Chinese manufacturer earns the mark for the completed product.

Mr. Caggiano expects China to expand the range of products currently mandated under the safety standard. For telecommunications equipment, for example, he believes the country will imitate the European CISPR 22 standard that regulates electromagnetic interference and susceptibility.

''For years CISPR 22 has zeroed in on intentional (frequency radiators) and spurious emissions, especially in intentionally radiating equipment,'' he says. ''Now what's being added in Europe is susceptibility for immunity. That means when you design a piece of equipment, whether a radiator or not, that piece of equipment must be immune to radiation. There's also a susceptibility spec for medical equipment.''

These issues are also of concern to U.S. officials involved in communications equipment safety standards, making Mr. Caggiano even more certain that China will take on these concerns as well.