Research On The Application Of Compatible Standards In Decision-making For International Engineering Procurement

Deep-seated issues in international trade have not been received enough attention in industries that require a large amount of infrastructure investment,such as railway construction and communications.These kinds of trade are not only the import and export of goods,but also the transfer and transaction of a complete set of systems such as technology,standards,and management mechanisms.Certainly,this kind of Systemed engineering trade contributes to the rapid economic growth of importing countries,but it also leads to path dependence from foreign technologies,which can make importing countries become passive receivers of technologies and systems and it is difficult for them to achieve subsequent catch-up.The balance between the positive and the negative makes the technology importing countries face difficult decisionmaking problems.When discussing the decision-making difficulties of technology importing countries,the international procurement of Thailand’s high-speed railway project can be used as an example.The ambition of Thai is to be a transportation hub in the Indochina Peninsula,so it plans to carry out high-speed railway with foreign advanced technology.A dilemma exists when choosing suppliers between China and Japan: On the one hand,path dependence in the complete set of standard systems must be noticed when single system is accepted,it can lead to monopoly;On the other hand,market capacity in Thai too small to ensure coexist run and make profits if two standard systems are introduced at the same time,and differences in standard systems will cause huge waste in later operations.In view of this,it has analyzed a series of problems caused by the transfer of the standard system in international trade from the perspective of importing countries,based on network externality theory,product differentiation theory,industrial organization theory,discussing possible situations from standards,establishing an analysis model for international procurement,focusing on the application of compatibility strategies.First,it analyzed the welfare situation in the monopoly market formed by a single standard.Second,the rationality of multiple standards are discussed from horizontal and vertical differentiation,and analyzed compatibility or not on consumer welfare in two kinds of differentiation.Then cost-benefit analysis method is used to evaluate several possible decisions,and optimal decision under economic analysis is obtained.Finally,further discussion was carried out in combination with procurement cost and conversion cost factors,and domestic political factors in Thailand.And this theoretical model was used to the case of high-speed railway project in China further,so as to make the results more realistic and to verify the theoretical model by another case.The following conclusions were obtained: For systemed engineering trade,path dependence has an important influence on early investment decisions.Standards are created for coordination at first,but multiple standards can increase social welfare because of the demand diversity of the market.Furthermore,under the conditions of network externalities,when products of different standards are compatible,consumer welfare will be further improved,and the costs incurred due to compatibility are generally borne by followers in the market.In the case of Thai high-speed railway project,from an economic and political perspective,Thailand should implement a compatible standard strategy under the two standard systems,but the implementation of compatible standards is very difficult.This also gives profound enlightenment to the implementation of relevant industrial policies in our country.That is,to enhance the industrial competitiveness of key industries has far-reaching strategic significance.Based on the above conclusions,this article puts forward recommendations for the Thai government to implement compatibility standards strategies,and it also puts forward some suggestions for China which is to improve the export capacity of the high-speed railway industry.In addition,it also brings some enlightenment to industrial security and system discourse power of China.The research value is as follows: First of all,further extending on the basis of the research on the international trade effects of standards from the perspective of compatibility,and it can enrich the theoretical research of standards on international trade.Secondly,analyzing Thailand’s high-speed railway international procurement from the perspective of standard economics,supplementing and enriching the research perspective of this case.Thirdly,try to understand the formulation of trade policies from standard importing countries.On the one hand,it will help China make country selection when exporting technology;on the other hand,it is important to explore industrial policy and international trade policy of China,which is of great significance to enhance the international competitiveness of industry in China.