Executive Summary: China’s Convoluted Management System Is Driving Rapid Technological Progress
China seeks to lead the development of future generations of spectrum management technology. The use of wireless technologies has exploded in recent decades, and technological development is expanding the possibilities for use of the electromagnetic spectrum. As competition between the United States and China intensifies, interest has sharpened in finding better ways to manage the use of spectrum to support critical applications in areas such as warfighting, mobile communications, and remote sensing. Beijing’s approach to spectrum management has been poorly understood, but it offers important lessons regarding the benefits and drawbacks of a relatively centralized, civilian-led approach. This report therefore investigates how China manages its electromagnetic spectrum, how that spectrum is used, how China’s approach to spectrum management is impacting global standards, and what benefits (and costs) China’s approach has offered.
China’s approach to managing its electromagnetic spectrum resources has generated a number of benefits, including rapid deployment of 5G technologies, a highly active spectrum research field, and expanded influence in international markets. The relative centralization of its spectrum management authorities is also likely to improve the People’s Liberation Army’s joint warfighting capabilities in the future. However, its approach has also generated a complex, opaque bureaucratic process, high barriers to entry for smaller companies, and possibly lower efficiency in allocating and utilizing spectrum resources.
- China has four primary spectrum objectives that shape its approach to managing electromagnetic spectrum resources:
- Increasing the efficiency of spectrum allocation and utilization;
- Improving coordination on spectrum issues between the government, the military, and the commercial sector;
- Supporting the development of priority technology areas, especially 5G and 6G mobile communications, the Internet of Things (in a wide variety of sectors including smart manufacturing, agriculture, transportation, and healthcare), and the integration of satellite communications into a comprehensive mobile communications network; and
- Promoting the adoption of Chinese standards for managing the electromagnetic spectrum at international organizations.
- The approach China uses to pursue these goals has six key characteristics:
- Centralized decision-making processes: the People’s Republic of China (PRC) Ministry of Industry and Information Technology is the sole authority responsible for allocating spectrum bands in China.
- Labor-intensive coordination between military and civilian stakeholders: while civilian authorities take precedence, civilian and military users who need to share spectrum must engage in time-consuming processes of deconfliction.
- Support for national priorities: Spectrum management in China aligns with clear economic and technological goals set by policymakers.
- Close relationships between regulators and providers: PRC authorities not only set detailed national industrial priorities in cooperation with large state-owned telecommunications providers, they also actively reshape, merge, or eliminate providers when necessary to achieve their goals. Chinese regulators also, unusually, encourage cooperation among large telecommunications providers.
- Adherence to international standards: While China actively promotes its preferred international standards in spectrum use, it also generally appears interested in adhering to standards that are adopted, even if they were not China’s preferred approach.
- Secrecy surrounding government and military spectrum allocations: China does not appear to delineate dedicated bands for either government or military use.
These findings point to three recommendations for Congressional action:
- 1. Direct the Federal Communications Commission and the National Telecommunications and Information Administration to jointly lead a study investigating how the United States’ process for re-allocating and licensing spectrum bands could be streamlined, with input from other stakeholders in government, academia, and the private sector. One key advantage China’s approach to electromagnetic spectrum management has displayed in recent years is speed: it issued 5G licenses to its three primary telecommunications providers within months of the international 5G standard being finalized. The United States moved more slowly to allocate spectrum to 5G for several reasons, including an unforeseen legal complication, an unplanned lapse in the FCC’s authority to auction frequency, and the time needed to prepare and conduct auctions. Any such studies should, however, attempt to identify how to preserve the benefits of incorporating market-based incentives and information. While the PRC system can move quickly when it makes up its mind, it is often slow to change its mind when it has put so many resources behind an initial decision. The U.S. system for electromagnetic spectrum management has an advantage in its more effective incorporation of market dynamics (though auctions, for instance) that should be preserved.
- 2. Increase funding for foundational research on advanced technologies such as cognitive radio and radar, dynamic approaches to spectrum allocation, and spectrum sharing. As a consequence of its high-level prioritization of spectrum management in the 13th Five-Year Plan and continuing prioritization of basic research in mobile communications and remote sensing, China’s research in cutting-edge approaches to increasing the efficiency and utility of electromagnetic spectrum use in general appears to be proceeding much more rapidly than that of the United States.
- 3. Encourage U.S. entities – both government agencies and corporations – to participate more actively in the international standards-setting process. The United States is a major funder of the ITU, but U.S. participation in its standards-setting processes is substantially lower than China’s. Directly encouraging U.S. government agencies and offices working in spectrum management to participate in international standard setting could involve increased travel subsidies, expanded research budgets, or the creation of new organizations directly focused on researching and contributing to international wireless technology standards. Encouraging corporate participation should be pursued on multiple fronts, because the reasons U.S. corporate participation at the ITU has been lower than China’s are complex and poorly understood. Tax incentives or grants for companies pursuing research relevant to the ITU’s work would help develop a larger pool of expertise for contributing to ITU decision-making processes. Offering streamlined regulatory pathways to commercializing new technologies for companies that succeed in shaping ITU standards for those technologies could strengthen existing market-driven incentives to shape and adopt global standards. In addition, the National Science Foundation could be directed to fund research into views of the ITU and the reasons for low participation within U.S corporations, which would help identify the most effective methods for policymakers to incentivize increased participation.