In the past decades of opening up, China’s economic development and trading capacity have experienced breakneck growth. The European Union and China are now two of the biggest traders in the world. China is now the EU’s second-biggest trading partner behind the United States and the EU is China’s biggest trading partner. China is the EU’s biggest source of imports and its second-biggest export market. China and Europe trade on average over €1 billion a day (source: DG TRADE website).
China is now at a critical juncture, as it aims to shift to a slower but more balanced pattern of development which requires a strengthening of the institutional basis required for a market- led economy. This transition is complex and may not always be smooth. Moreover, economic reform has to take place against the background of competing political and economic interests. At the same time, stable economic growth and employment creation are important for domestic political legitimacy. China is witnessing rapid ageing of the population and rising regional and socioeconomic disparities which create domestic tensions.
Internal change in China has external impact. Economically and financially, in trade and investment flows, and in other areas, China is seeking space and a voice. As a consequence, the decisions China makes about its political, economic and social development matter to the EU more than ever. The EU’s prosperity is linked to sustainable growth in China. The EU therefore has a significant stake in the success of China’s economic and governance reforms. As China’s biggest trading partner, representing about 15% of China’s trade, and an attractive and secure destination for its outward direct investment, China needs the EU as much as the EU needs China.
A top EU priority1 is to promote reform and innovation in support of transforming China’s growth model into a more sustainable one, based on greater domestic consumption, an expanded service sector, and openness to foreign investment, products and services. The EU’s economic strengths are complementary to the priorities of China’s 13th Five Year Plan, such as innovation, services, green growth and balancing urban and rural development.
On the other hand, the Chinese Government’s industrial policies aim to create national champions able to compete globally in sectors such as civil aircraft, new materials, the digital economy, banking, energy and infrastructure. It is important for the EU to work with China to promote collaboration as well as open and fair competition in each other’s markets.
The SESEC projects should be conceived against such large context.
As in many other fields, the EU will have to deal with a number of emerging trends in China in the field of standardization:
- China’s ongoing standardization reform has seen the uptake of a more market-driven model of standardization in which numerous Standards Development Organisations are market agents competing with their products, i.e. standards. To a certain extent, this modifies the picture for European players and brings new challenges for European interests to influence the development of standards in that market, potentially obstructing market access for European industries.
- Other policy ambitions of China that are supported by home-grown Chinese standards, such as ‘Made in China 2025’ (supporting industrial development) and ‘The Belt and Road Initiative’ (supporting global trade), bring additional challenges to the role of Europe in the global economy as well as Europe’s presence on the Chinese market. Increased intelligence gathering and analysis thus are crucial for Europe to deal with those challenges.
- China’s policy of “going global” is accelerating. Its companies are being encouraged to trade, invest abroad, and find resources as never before. The Belt and Road Initiative will in particular have a major impact on standards even if at the time of writing, it is difficult to measure the breadth and depth of this impact.
- China’s growing global influence and interests lead to a corresponding demand for a greater say in global economic governance. There is also a much stronger presence of China in international and global standardization setting, for example, ISO, IEC, 3GPP or oneM2M.
- China’s transition to a more sustainable pattern of development is complex and may lead to bouts of turbulence within China and global standardization landscape. Europe has several decades of experience to offer on the topic of sustainability in the field of standardization.
- The latest Five Year Plan is designed to accelerate economic, social and environmental re-balancing and a shift to consumption-driven growth. Encouraging whenever possible and relevant the adoption of ENs in China would facilitate European products to access that market.
There is a lot for Europe to work on in terms of access to China’s technical committees and to demystify the picture after the standardization reform in China. The 2016 new EU Strategy on China2 states the following:
“The EU should continue to pursue dialogues with China on standards, regulation and conformity assessment procedures in key sectors in order to reduce costs and entry barriers, and to promote the primacy of international standards in areas such as health and safety… environmental protection, food and consumer product safety, climate action and data protection. Co-operative research can be deployed to promote the use of common standards in the future”.
Recognizing the importance of this development for the European economy and in alignment with the above-mentioned EU strategy on China, the European Standards Organizations, CEN, CENELEC and ETSI and their members, decided to continue with a new phase of the Seconded European Standardization Expert project.