China: The Final Frontier in Telecom Approvals

Leslie Bai
What once was a formidable maze of culture, laws, and overlapping regulations is now a truly open market with clear pathways to marketing electronic products.

China has a culture and a market that for most Western companies has long been shrouded in mystery and political intrigue. However, as one of the largest growing information technology (IT) markets in the world, China now opens a critical window of opportunity for companies to enter this market. With a population of more than 1.3 billion people, China offers a potentially lucrative market for foreign goods and services.

Being a relatively new country to IT technology, China represents a huge potential market for manufacturers to sell their products. This is particularly true in the area of telecommunications. Just five years ago, most areas of China had five-digit telephone numbers. Today, many cities have eight-digit numbers, and many of China's 250 million city dwellers possess a pager, a cellular phone, or both.

The Chinese government has undertaken a massive effort to revise its laws and regulations in a manner consistent with World Trade Organization (WTO) rules. There are still substantial barriers in place that have yet to be dismantled. Import barriers, an opaque and inconsistent legal system, and limitations on market access combine to make it difficult for foreign firms to compete in China. Although China's trade liberalization efforts represent a step forward, new regulations continue to be introduced. A significant new regulation is the China Compulsory Certification (CCC) Mark, which was introduced in May 2002.

Companies that are contemplating obtaining approvals for electrical or electronic products—whether for telecommunications, computing, radio, electronics, or household appliances—will face some distinctly Chinese obstacles. Distance, language, unfamiliar culture, and unsophisticated commercial market conditions can sometimes make entry into China both difficult and expensive. A formidable maze of culture, laws, and regulations confronts any company embarking on this venture.

This article summarizes four major approvals currently implemented in China: the China Compulsory Certification (CCC) Mark, Network Access License (NAL), radio type approval, and security products sales permit. For each type of approval, practical guidance is provided, and the most current information on the process is presented.

China Compulsory Certification (CCC)

From May 1, 2002, China implemented the CCC Mark for a one-year transition period. As of April 30, 2003, CCC has been fully enforced. The authority governing CCC is called the China Certification and Accreditation Administration (CNCA). The new CCC Mark replaces two old systems, CCIB (for foreign products) and CCEE (for domestic products). CNCA has published its first catalog, which includes 19 types of products covering a total of 132 categories. All products in the CCC product catalog, whether manufactured by a foreign or a Chinese company, must comply with the same CCC implementation rules to enter the Chinese market.

In fact, CNCA itself as the CCC regulator doesn't issue the CCC certificates. Under CNCA, there are three organizations: China National Accreditation Board for Certifiers (CNAB), China National Accreditation Board for Laboratories (CNAL), and China National Auditor and Training Accreditation Board (CNAT). CNAB initially accredited two certification bodies, and so far it has accredited nine certification bodies, all of which are in China. Each is accredited and authorized to certify particular types of products and issue the CCC Mark.

A CCC certification body is not allowed to perform CCC testing. All testing for CCC must be performed at CNAL-accredited test laboratories. CNAL had accredited 68 laboratories at the time CCC was announced. Currently, CNAL has accredited 882 testing laboratories in China, each of which is accredited for CCC testing on certain types of products. Because CNCA has not achieved any mutual agreement with any other accreditation body, currently CCC testing must be performed at CNCA-accredited laboratories in China. There is only one exception. On November 20, 2002, CNCA China and SPRING Singapore (formerly Singapore Productivity and Standards Board) signed a Memorandum of Understanding (MoU) that allows for those products under CCC categories to be certified in either country to enter into the other country without being certified again. This is the first such MoU signed by CNCA China since CCC was implemented in May 2002.

The CCC Mark requires the following steps to be taken to accomplish the whole process:

All applications must be made using the standard form or electronically with a Declaration of Conformity to Chinese standards. The application must be submitted in Chinese.

Sample testing includes safety testing and EMC testing. For safety testing, China (as a member of the CB Scheme) accepts a CB Test Report with China deviations. If the CB report does not cover China deviations (and a China deviation is applicable), additional safety testing will be performed in accordance with Chinese standards. For EMC testing, a CNCA-accredited lab will be assigned by the certification body to perform EMC testing according to Chinese standards. All Chinese standards are written in Chinese but designated as IDT, EQV, or NEQ based on their similarity to international IEC standards. IDT means the two standards are exactly the same; EQV means the two standards are technically equivalent but may (or may not) have some minor deviations; and NEQ means major technical deviations exist, and the test results are provided for reference only.

If a factory that manufactures a product has never been inspected under either the CCIB or CCEE systems, factory inspection is mandatory before a CCC Mark is granted. The factory inspection typically runs two days. The certification body assigns a technical engineer and a quality assurance engineer to inspect the facility. Ten aspects must be inspected, including:

Except for business licenses and CB reports and certificates, all documents must be submitted in Chinese. The application package is considered a legal document and must be signed by the legal authority of the company. Although it can be very tedious to compile the documents and create the application package, most of the information can be found in company and product literature.

The CCC certification fees are paid directly to the certification body. Fees can be paid either by Chinese RMB or the equivalent U.S. dollars. The payment covers all CCC fees including application, registration, testing, factory inspection, etc. There are no additional fees to be paid to the assigned test lab that performs the testing. The test lab will collect testing fees from the certification body after the process is completed.

The cost and time frame for the CCC Mark varies based on several factors: product type, product category, CB report, China deviations in the CB report, and factory inspection. Cost for the CCC Mark ranges from $1500 to $20,000. A typical time frame from the time the CCC application is submitted until the CCC Mark is granted runs anywhere from 3 weeks to 6 months. The test time also depends on the schedule of the assigned test lab. It is worth mentioning that all CNCA-accredited labs are connected with the Chinese government to some extent. These labs basically have little or no competition, and, for many of them, profitability is not within their mission. In fact, CNCA has regulated all fees, and certification bodies charge the fees on behalf of the test labs. Consequently, manufacturers should not expect the process to work as it does with a typical A2LA- or NVLAP-accredited independent test lab in the United States.

Network Access License (NAL)

Many companies view approvals purely as an expensive hindrance to commerce, but the reasons behind them can be justified. In reality, approvals serve to prevent the supply of potentially dangerous and poor-quality products into the marketplace. It is necessary to ensure that telecommunications products operate correctly when connected to the national infrastructure, and that they do not constitute a risk to the safe and proper operation of the networks to which they are connected. China is no exception to this rule. The importation and supply of unapproved or gray-market products can lead to prosecution and forfeiture of equipment by authorities.

China's Ministry of Information Industry (MII) stipulates the telecom approval regulations, and the Telecommunications Administration Bureau under the MII takes charge of telecom product approvals granted in the form of a Network Access License (NAL). Each type of approved product will be issued a Network Access Identifier (NAI) with the certification number.

On June 25, 2001, MII announced the first three categories of telecom equipment, which cover a total of 28 types of products. All regulated products must be MII approved before entering the Chinese market. MII also assigned 10 laboratories to perform NAL testing. Each lab focuses on certain types of products. It is important to note that these labs may not be CNCA accredited, and currently MII and CNCA still operate under different certification systems.

An applicant for an NAL must be a legal entity located in mainland China. The application package can be submitted to one of two MII certification centers, both located in Beijing. The NAL application process is shown in the flow chart in Figure 1.

There are typically four types of applications: renewal, regular equipment, high-end equipment, and equipment modification. The whole process varies based on the type of application. Although Figure 1 shows the whole process and covers all types of applications, this article examines only the typical application process. For certain types of applications, such as high-end equipment (e.g., core routers, data switching, ATM, etc.), the process can be extremely complicated. Manufacturers should seek consultation from professional approval agents before proceeding in such cases.

The major difference between an MII approval and European or FCC approvals is that MII includes quality assurance in the approval process. Manufacturers must have a satisfactory quality system in place. If a manufacturer is not ISO 9000 certified, MII will audit the manufacturer's quality system. From the MII point of view, the quality audit and technical audit are equally important.

The following documents must be submitted for NAL testing and MII approval. All documents must be submitted in Chinese.

Equipment Type Examples Type 1: Wireless Base Stations Wireless paging Analog mobile communications GSM mobile communications CDMA mobile communications GSM base station controller CDMA base station controller Digital hierarchy base stations Type 2: Microwave Communication Equipment PDH digital microwave communication equipment SDH digital microwave communication equipment SPDH digital microwave communication equipment Point-to-multiple-point digital microwave communication system Type 3: Satellite Communication Earth Station —

Table I. MII catalog of radio equipment for type approval.

Typically, testing must be performed by one of the 10 MII- assigned labs in China. Testing can also be performed in the customer's lab under special arrangement. Such testing must be performed and reported by an MII-assigned lab. MII does not accept any reports other than from MII-assigned labs. Most of the Chinese standards are similar to ITU standards but are written in Chinese. It is important to fully discuss with the assigned test lab the testing scope, number of testing samples, test specifications, procedures, and cost of testing.

The cost of testing is determined and charged by the test lab. The amount and payment method of testing fees is negotiable. It is highly recommended that manufacturers employ an approvals expert to discuss these issues with the testing lab on behalf of the manufacturer. The MII approval center will also charge other fees to cover services such as expert panel appraisal and certification. Such fees vary depending on the type of product. The whole process may take several months to complete, but for some straightforward cases it can take as little as 3 weeks. All equipment under MII and NAL regulation must be affixed with an MII approval sticker, which is the NAI. The NAI is made by the MII Certification Center with an MII Certification number. The cost for an NAI sticker also varies depending on product type, but typically the cost ranges from 0.50 RMB ($0.06) for terminal equipment to 4.00 RMB ($0.50) for routers. The NAL is normally valid for three years. It is important that manufacturers apply for renewal of the NAL at least three months prior to its expiration. If the renewal application is submitted after the NAL has expired, the manufacturer must repeat the entire process.

Radio Type Approval

MII regulates both telecommunication and radiocommunication equipment. Initially, there were two organizations under MII that accepted radio type-approval applications, the Telecom Administration Bureau (TAB) Certification Center and the State Radio Regulation Committee (SRRC) Certification Center. Currently, the TAB Certification Center accepts only NAL applications. SRRC takes charge of radio type approvals. The application for radio type approval is free of charge by SRRC, but in-country testing is mandatory. The cost of testing is determined by SRRC and is charged by the test labs. The application process and documentation for radio type approval is similar to that of the NAL application. Quality assurance is also part of the certification process.

Equipment Type GSM 900-1800 dual-band digital cellular mobile station GSM 900-1800 dual-band cellular base station GSM transmitters 800-MHz CDMA cellular mobile station 800-MHz CDMA cellular base station FM transceiver Wireless paging transmitter Analog hierarchy system base station and mobile station Digital hierarchy system base station and mobile station Point-to-point spread-spectrum equipment 26-GHz LMDS broadband wireless access equipment 3.5-GHz wireless access equipment 2.4-GHz short-range devices Fixed satellite earth station equipment Digital transmission radio station Digital microwave communication repeater PHS wireless access system DECT wireless access system Cordless phone Maritime satellite earth station SSB equipment Low-power wireless devices FM broadcasting transmitter AM broadcasting transmitter TV broadcasting equipment Multiple-channel microwave system

Table II. SRRC-regulated radio equipment for type approval.

The sampling procedures are significantly different between NAL and radio type approval. For all types of radio equipment, manufacturers are required to provide 20 sequential serial numbers of the product. The testing lab randomly chooses one or more units to test.

The first catalog of radio equipment regulated by MII is shown in Table I. In addition to these MII-regulated radio products, SRRC has issued more types of intentional radiators under type approval. There are currently 27 types of radio equipment under SRRC regulation (see Table II). SRRC also regulates the technical specifications for each type of radio equipment (e.g. frequency range, radio-frequency power, spurious emissions, etc.) In addition, SRRC quotes the standards on which the radio equipment was tested.

Because the process of radio type approval is similar to that of NAL application but made to a different department of MII, this article does not discuss the details of that application process. However, it's worth mentioning that although SRRC is in charge of the application and certification of MII-regulated radio equipment for type approvals, manufacturers of radio equipment should be aware that SRRC is also responsible for radio spectrum management and monitoring. In addition to radio type approval, SRRC actually has another regulation, called the Radio Equipment Importation Permit.

For all radio equipment, an importation permit is required and issued by SRRC when products are shipped into China for any purpose. Until recently, this regulation was not really strictly implemented, but now Chinese customs has begun checking for importation permits when radio products arrive in China.

The application for an importation permit must be made to SRRC. The following documents are required:

If the radio equipment falls within SRRC's regulated types of products and is for sale in China, the radio must obtain type approval. If the radio does not require type approval, an importation permit is required and must be presented for customs clearance when shipped into China. If the radio is under SRRC regulation but for purposes other than sale in China, radio type approval is not required. However, an importation permit must be presented at customs. Typically this type of permit is valid for 60 days for customs clearance. The radio must be shipped out of China within 60 days from the date it arrives in China.

Security Products Sales Permit

Security products, especially those made by foreign companies, have been under tight control by the Chinese government until recently. The Ministry of Public Security (MPS) announced 11 types of security products (even completely designed and made in foreign countries) that may be imported into China if they are tested and certified by MPS. The products subject to MPS approval are:

The approval is granted in the form of a sales permit. The process of applying for MPS approval includes two steps: a) product testing and evaluation at an MPS-assigned test lab or research center, and b) application for an MPS sales permit at an MPS Certification Center.

For testing and evaluation, the following documents must be submitted to the testing and evaluation facility:

For the application for an MPS sales permit, the following documents must be submitted to MPS Department 11:

It's not guaranteed that MPS approval will be granted even if the testing and evaluation are successfully completed. The final decision as to whether MPS approval is granted is made by MPS Department 11. For obvious reasons, it's highly recommended that security products manufacturers seek a consultation from a professional approval specialist before proceeding with an application for MPS approval.

Important Questions CCC MII MPS Are documents required in Chinese? Yes Yes Yes Is there a labeling requirement? Yes Yes Yes Is there any safety requirement? Yes No Yes Is there any EMC requirement? Yes No Yes Is there any telecom requirement? No Yes No Is there any quality requirement? Yes Yes No Must testing be performed in China? Yes Yes Yes Are all different models tested? Yes Yes Yes

Table III. Important questions for China approvals.

The entire process for MPS approval can take from several weeks to several months. The cost of testing and evaluation is determined by the testing and evaluation facilities. All approved security products are required to affix an MPS sticker to prove MPS approval. The stickers can be purchased from MPS Department 11 at the time the MPS approval is issued. The sticker carries the MPS certification number for the approved product.

Conclusion

China is one of the few countries that represents a truly final marketing frontier for manufacturers. Drawing an analogy with the pioneers of the 1849 California gold rush, the secret of success is simple—it is all about who gets there first. With its entry to WTO, China has opened up as a market that everybody has a chance to penetrate. However, to access the China market, manufacturers must be prepared to face a formidable maze of culture, laws, and regulations.

This article has presented an overview of the major China approvals for electrical, electronic, IT, and telecommunication equipment. Depending on the type of product, manufacturers must consider CCC, NAL, radio type approval, or a security products sales permit. Table III summarizes some important questions for each type of China approval.

Leslie Bai, a NARTE-certified EMC engineer, has more than 15 years of experience in global regulatory compliance. He is a founder of both Siemic (China) Certification Services, a compliance testing and certification facility located in Beijing, and Siemic Laboratories, a wireless and RF testing facility and global certification service provider in Fremont, CA. Bai can be reached at lesliebai@siemic.com.