by Chu Yan

Since China’s accession to the WTO, its steel industry must take the next steps toward better domestic production and the possibilities of global trade. Chu Yan, vice president of Beijing Global Metallurgical Technology, discusses how ASTM International’s example in creating standards for steel can guide China in these steps.

This article reflects the author’s opinion and does not represent the view of the Chinese standardization system.

The Chinese steel industry is at a crossroads since China’s accession to the World Trade Organization (WTO). As a leading steel producer, consumer and importer, China is committed to opening its steel market to global competition. This brings new growth opportunities for Chinese manufacturers as well as many challenges. China is still behind developed countries in the diversity and quality of its steel products. Particularly, current product lines are severely unbalanced: low-end steel products for general use are oversupplied, but valued-added, high tech products are still in shortage. By contrast, the product lines and manufacturing abilities of many foreign steel producers are more favorable, and they could easily expand their market shares in China over the domestic companies.

At this juncture, the Chinese steel industry is confronted with the grand challenge of maintaining its current domestic market shares and, at the same time, exporting into international markets. To achieve this goal, several key questions need to be addressed, including how to diversify and balance production lines, how to improve product quality and lower cost, and how to conform to international standards.

As a veteran in Chinese standardization and a member of ASTM International, I would like to share my personal views on 1) how the Chinese standards system can learn from ASTM in order to advance the sophistication of Chinese standardization and 2) how our steel industry can benefit from ASTM’s standards development process to become more competitive in the global market.

In this article, I will address the following five aspects: the benefits of market-driven standardization, the need for a broad-based membership, the lessons of a transparent standards development process, the adoption of ASTM standards, and collaboration with ASTM.

Market-Driven Standardization

The most important lesson Chinese standards developers can learn from ASTM is that its standards are developed based on market needs. The market-oriented nature of the ASTM process is the reason why ASTM’s standards have been widely used or adopted and become the international benchmark in the field for more than 100 years.

China’s steel standards originated in the 1950s and were based on the Russian model. They were mandatory as a result of the planned economy. Over the past 20 years, Chinese economic reform has been transforming the planned economy to a market economy, which has brought many changes in standardization. Mandatory standards are gradually being replaced by voluntary ones. Nevertheless, the Chinese standardization process is still based primarily on the needs of the manufacturers. It is crucial for the Chinese standards development system to follow ASTM’s footsteps to make its standards voluntary, trade-oriented, and to serve market needs and consumer demands. An up-to-date market-driven standardization system is a pre-requisite for the Chinese steel industry to improve its product quality, balance product lines, and become more competitive in the global market. A voluntary and consensus-based standards system is also crucial so that China may abide by the agreements stipulated by the WTO Technical Barriers to Trade Agreement.

Broad-Based Membership

China would benefit tremendously from emulating the organizational structure of ASTM’s committees. ASTM’s membership includes all market players—producers, customers, end-consumers, government officials, and academics—all of whom participate in the development of standards to ensure the true reflection of market needs. Through this multilevel participation, ASTM has well-established procedures for the efficient and timely development of standards.

The Chinese standards development procedure is still based predominantly on the producer as the pillar, although it is trending slowly toward a broader-based committee system. China has established the Iron and Steel Standardization Technical Committee, with five subcommittees covering basic standards, analytical chemistry, mechanical testing, steel wire, and steel tubes. However, the committee has limited membership, and so the standards developed by the committee do not fully represent and protect the interest of producers, users, and other stakeholders. As a result, it is difficult for these standards to have a lasting effect in the marketplace.

A Transparent Standards Development Process

ASTM’s voluntary consensus standards are developed through a process that is transparent, with regulations for the conduct of committee business and the editorial structure of standards. These tools enable all involved parties to negotiate and resolve their differences. They also ensure that the resulting standard will accurately represent the market.

The Chinese standardization system should break away from its outdated adoption methods, which were established under the framework of a planned economy. Our nation should learn from ASTM’s structure and its approval mechanism to create its own market-oriented, voluntary, and consensus system that is compatible to both the domestic and international markets. During the development process, the Chinese standardization system should also pay particular attention to the way ASTM takes advantage of Internet-based communication before and after each meeting to help resolve disputes in the development of standards. But most especially, Chinese standards developers should actively seek out the input of all levels of customers before, during and after meetings.

Adoption of ASTM Standards

In order to enhance the competitiveness of Chinese steel enterprises in the domestic and global markets, the number of product lines must be increased, and the quality of products must be improved. The Chinese steel industry should increase the plate-to-pipe ratio, the production of plate and strip, and the production of value-added high-end products. To facilitate industry reform, the Chinese standards system must develop new standards relatively quickly to meet the market’s demand for high quality products.

Having worked in the standardization field since 1965, I have witnessed gradual changes in the Chinese steel industry’s attitude toward ASTM standards, from ignorance and resistance to recognition, research, and even use. Under the planned economy before the 1970s, it was very difficult for Chinese standardization professionals and the steel industry to understand the concept and use of the ASTM standard. After China started its economic reform and joined ISO in 1978, the Chinese standardization system, the steel industry, and international trading companies gradually realized that ASTM standards are technically sound and have international acceptance. In early 1980s, Chinese standards developers adopted a policy of actively applying international standards and advanced foreign standards, and ASTM standards were listed among a handful of advanced foreign standards. Since the late 1980s, the ASTM standard has been highly valued in China.

By adopting ASTM standards directly or with some modifications, the Chinese standards development system can save a lot of time and financial resources. Essentially, adopting ASTM standards is equivalent to getting free technology transfer. In my opinion, ASTM standards for steel and its raw materials are very sophisticated in
terms of their content, technology, and adoptability. Meeting the ASTM standards will afford the Chinese steel products a competitive edge in both domestic and global markets.

Collaboration with ASTM

After Chinese accession to the WTO, fostering collaboration between the Chinese steel industry (and the Chinese standards development system, in particular) and ASTM will be important and beneficial to both sides. The reasons and benefits for ASTM are many:

• As ASTM puts more and more emphasis on internationalizing its products (its existing and future standards), it may well become more interested in the Chinese market.
• The American steel industry needs to gain a market-share in China. ASTM standards are the fast-track tickets for American steel products to the Chinese market.
• As an international standardization organization, ASTM has not only to bridge the gap between producers’ desires and consumers’ expectations, but it also must provide mediations between trading partners and competitors.

ASTM needs to consider the opinions of nations other than the United States, including the developing countries. In particular, ASTM may wish to pay more attention to the opinions and desires of the Chinese steel industry, since China is the largest developing country in the world and one of the world’s largest steel producers and consumers.

Collaboration with ASTM is also important to the Chinese steel industry:

• The latter is determined to reform its industry structure and to take its products into the global market.
• China should take advantage of already-developed voluntary consensus standards.
• As an old Chinese saying goes, “It’s better to learn from the best,” and the Chinese standards system can study ASTM’s experiences and establish a new Chinese-style standards system that is transparent, efficient, and capable of meeting the challenges and demands of the post-WTO market economy.

Cooperation between the Chinese steel industry and ASTM is a win-win situation.

I would like to make several suggestions regarding this potential collaboration. It should begin with a bilateral academic exchange that will help ASTM understand the current status and demands of the Chinese standardization system and provide Chinese standardization professionals a chance to thoroughly study the ASTM system. Many components of ASTM’s system are important to understand, especially the setup of standards systems, the procedures of protocol design, the structure of product standards, the research forum for future trends, and post-approval education. The focus of the study should be on how to write standards that meet the needs of the market and customers, and how to adjust the structure of the standards accordingly to promote technical improvement for the steel industry, to increase the quality of the steel, and to add value to the products. The Chinese standardization system can conduct exchanges through several means:

• Exchange of standards documents: The Chinese standardization system should start with timely translation of ASTM documents to Chinese.
• Classes and lectures: Chinese standards developers can invite ASTM experts to teach in symposia or to give talks in academic conferences. (I would like to suggest boldly that ASTM convene a future meeting of Committee A01 on Steel, Stainless Steel, and Related Alloys in China.)
• Arranging visits to ASTM and/or participation in A01 meetings for qualified Chinese technical experts and product consumers: Since 1982, I have visited ASTM six times, and I found each trip rewarding. If the technical personnel in Chinese steel companies could visit ASTM, they would benefit even more.
• Participation in the ASTM standard developing process: ASTM has many foreign members. Through my participation in ASTM Committees A01, C08 on Refractories, and E50 on Environmental Assessment, I have learned a lot about the management of ASTM. I highly encourage standards professionals, entrepreneurs, and technical experts in China to make more contact with ASTM and to even become members. Through involvement in ASTM’s standards developing process, the Chinese standardization system will gain technical knowledge and management know-how, while representing the interests of Chinese steel manufacturers. Direct participation and involvement will raise the awareness of standardization in China and improve the sophistication of Chinese standardization. A maturing standardization organization will better facilitate the emergence of Chinese steel products into world markets.

With the Chinese steel industry standing at its crossroads, there are many ways it may look to the example of ASTM International and its Committee A01 for methods to improve its manufacturing and standards development processes. It is hoped that future collaborations may bring about mutual benefits for both entities. //

Copyright 2002, ASTM