The International Standards Organisation has rejected China's proposed encryption standard after criticism from the IEEE (thanks, Dave!):
China has asked the International Standards Organization to nullify its decision due to what it calls the engineer group's "unethical activities," such as allegedly conspiring against WAPI, insulting China, and using intimidation and threats, Xinhua reported, without elaborating.
I'd say it was more likely the IEEE 802.11i standard already does the job better than the proposed Chinese standard. Besides, engineers fought US government attempts to cripple encryption standards for most of the 80s and 90s. They didn't win that battle to roll over now for the Chinese government.