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Deepening exchanges on China’s AML, enforcement procedures and practices while continuing to improve transparency and good governance

Competition policy is an important element in protecting consumer interests while providing legal certainty and ensuring a level playing field for economic operators. One of the objectives of the Competition Policy Dialogue between the EU and China is to establish a permanent mechanism of consultation and transparency. To support capacity building in the field of competition policy in China and provide related technical assistance by the EU, the EUCTP II designed the EU-China Competition Week as a series of large-scale conference segments as well as smaller workshops and closed-door roundtables. This flexible mix of formats provides the right setting for
Mr. HAN Chunlin, Deputy Director General of the Anti-Monopoly Bureau of MOFCOM is discussing draft IPR guidelines on 23 October 2015, Shanghai, China
the exchange on different topics as priorities follow the domestic environment of China’s development and reform agenda in the context of competition law and policy. In October 2015, DG Competition and the Chinese Anti-Monopoly Enforcement Agencies (AMEA) met in Shanghai for the eleventh Competition Week organised under the EUCTP II.

The coordination process for the design and development of the 11th EU-China Competition week programme started as early as March 2015. The main topic of debate with the National Development and Reform Commission (NDRC) was settlements and commitment decisions, a theme of growing significance as nearly half of the cases dealt with in Europe are expected to take the form of settlements and commitments which will help to increase efficiency of competition regimes. E-commerce and online platforms are a priority theme in both China and the EU. China’s State Administration of Industry and Commerce (SAIC) and the NDRC engaged in discussions on questions of competition analysis in the online world with officials from EU Member State authorities from Italy and the Netherlands, concluding that economic fundamentals and the legal framework remain the same both for the online and offline worlds. A workshop designed for the SAIC featured contributions from the French competition authority on identifying anti-competitive behaviors in markets, with the Competition and Markets Authority of the UK presenting experiences on hub and spoke agreements. A roundtable on procedural matters in merger investigations with the China’s Ministry of Commerce (MOFCOM) gave both sides the opportunity to discuss draft measures on both the notification and the review procedures for concentration of undertakings. On the last day of the Competition Week, all three AMEAs participated in a roundtable with DG Competition to exchange opinions on IPR guidelines which are currently being drafted, as well as the balance between competition and the protection of IPR.

Strengthening Chinese capacities in competition law and policy by referencing European experiences at the third annual summer school on competition policy

A delegation consisting of selected enforcement officials and case handlers from all three Chinese AMEAs at central and provincial level participated in an intensive professional training held at the College of Europe in Bruges, Belgium, between 29 June to 10 July 2015. The programme, which was the third in an annual series delivered under the EUCTP II, was designed in line with the current priorities of the Chinese AMEAs and in coordination with DG Competition. The training provided a
comprehensive overview of EU competition law and policy, including its evolution, analytical framework, enforcement procedures and practices. Technical sessions also covered horizontal and vertical agreements, abuse of dominance, review and control of mergers and acquisitions, state aid control, judicial review, and economic assessments. The Chinese officials reported EU experience on leniency and economic operators’ commitment system as valuable references for China, and noted the necessity to improve efficiency of procedures and economic analysis in the enforcement of China’s Anti-Monopoly Law (AML).
Visit by the Chinese delegation to the European Commission, DG Competition on 1 July 2015, Brussels, Belgium

EU-China Roundtable on the Internet of Things

Internet of Things (IoT) technology connects objects, machines, and whole supply chains, in a way which enables autonomous decision-making to carry out certain actions e.g. on maintenance or process management, supported by technological innovation including augmented reality, big data, and cloud computing. As IoT technology finds its application in numerous areas such as agriculture, healthcare, energy, logistics, manufacturing and transportation, it is considered one of the key technological areas to address future global challenges, ranging from poverty and hunger to depletion of resources and climate change. The European Commission is investing more than EUR 150 million into the development of IoT innovation ecosystems and Large Scale Pilots over the next decade. In China, strategic plans for the future development of the IoT include for example “Internet Plus” and “Industry 2020” and “China Manufacturing 2025”. Today, China is already implementing 219 smart city projects, contributing to a growing IoT market exceeding CNY 620 billion in 2014, while achieving growth rates of 24%.

Under the EU-China Dialogue on Information Technology, Telecommunications and Informatization (ITTI), cooperation on the IoT has evolved from information sharing in 2011 through to new cooperation formats such as the IoT Weeks to the publication of Joint White Papers and the establishment of an industrial collaboration platform. To support such approaches and facilitate the development towards a common understanding of the IoT and its future impacts, the EUCTP II supported a series of exchanges between European and Chinese authorities and experts. This roundtable held in Beijing on 02 September 2015 took stock of the EU-China cooperation to date and discussed IoT application areas such as agriculture, e-health, energy and smart cities. Both sides introduced recent developments and initiatives to support the further development of the IoT and engaged in exchanges between regulators,
researchers, industry and academia. The roundtable was preceded by a workshop on industrial IoT applications and IoT Large Scale Pilots, organised by CAICT (formerly known as CATR) and the MIIT, as well as the IoT for the Future Forum, which enabled industry stakeholders from both sides to meet and actively engage with potential counterparts. Following the first two IoT white papers completed by the EU-China IoT Advisory Group and published during the IoT conference last year, the two sides announced to work towards finalisation of the EU-China Joint White Paper on the Internet of Thingsand publish it before the next ITTI Dialogue meeting.
Mr. YU Xiaohui, CAICT, presenting China’s strategic plans for further IoT development on 2 February 2015, Beijing, China

Increasing the capacity of the Chinese competent authorities in governance of food processing plants and disease surveillance

China has recently implemented effective measures to deal with outdated legislation and practices managing slaughterhouses, meat processing plants and plants rendering animal origin waste. Under the EU-China Dialogue on Agriculture, the EUCTP II supported these measures promoting EU-China exchanges. In the study assignment EU regulations to govern animal waste disposal Chinese experts from the Ministry of Agriculture travelled to the UK to understand the policies and practices associated with the management of animal waste disposal. The Chinese experts
spent eight days working with governmental and industrial rendering plants to acquire new knowledge and first-hand experience about the implementation of the regulations governing the disposal of waste or by-products derived from meat processing plants or diseased  animals. Additionally during the same visit MOA experts had the opportunity to visit relevant public and private institutions to gain first-hand experience of the control and prevention policies dealing with, surveillance and standards development associated with Schmallenberg disease (SBV), the disease which prompted the Chinese competent authorities to impose temporary trade restrictive measures on EU animal genetic material. MOA experts assessing the sanitary management in an artificial insemination center on 22 September, 2015, Chester, UK

Enhancing capacity to implement food safety legislation

Over the past four years food safety issues have continued to be a matter of major concern in China. Consequently, the Chinese government initiated a review of China’s first Food Safety Law (FSL), including public consultations. In April 2015, the amended FSL was published with the date of October 1st, 2015 set for its enactment. The new version of the FSL states that the CFDA is the main agency

National and international attendants during the EU-China exchanges on the newly amended Chinese food safety law on 1 September 2015, Beijing, China
responsible for food safety. Agricultural trading partners of China, among them, the European Union (EU) and the United States (USA), provided comments during the FSL public consultation. Under the agreement reached by the EU-China Food Safety and SPS Working Group, the EUCTP II has organised several activities to support the Chinese competent authorities to enhance their understanding of the technical and political aspects related to the development and enforcement of the EU food safety legal framework. The EU-China exchanges on food safety governance seminar was attended by 272 representatives from the Chinese competent authorities, EU and non EU diplomatic missions and relevant industry bodies. During the seminar exchanges, the participants gained knowledge about the amendments and their practical implications, resultant from the revision of the Food Safety Law (FSL) that came into effect on October 1st, 2015 and about the state of play of the development of specific regulations associated with the FSL.

Under the EU-China Dialogue on Agriculture, EUCTP II implemented the activity Food Safety surveillance and risk assessment in which seventy veterinary professionals from provincial and central level Animal Disease Control Centres participated in a 5-day interactive seminar. Attendees gained an understanding of how the prevalence of diseases, such as Schmallenberg disease, are detrimental for domestic and international trade and food safety. MOA officials were empowered to contribute to the strategic development of the MOA’s field epidemiology training program (FETPV) at provincial level and gained an understanding of how to foster cross-institutional collaborations to investigate zoonotic disease outbreaks.

Central and provincial level representatives from MOA engaged in interactive training on risk assessment and epidemiology on 23 July 2015, Qingdao, China

According to the Food Safety Law which entered into effect in October 2015, the development of food standards must be science-based and therefore, the assessment of the risk associated to food consumption becomes compulsory. Under the agreement reached by EU-China Food Safety and SPS working group, the EUCTP II organised the study assignment EU management of risk communication and data exchanges. This study supported the upgrading of the capacity of the China

CFSA and BVL experts participating in a risk assessment workshop at BVL headquarters on 15 June 2015, Berlin, Germany
National Center for Food Safety Risk Assessment (CFSA) of the National Health and Family Planning Commission (NHFPC). Two experts from CFSA spent two weeks in the German Federal Office of Consumer Protection and Food Safety (BVL) in Berlin, Germany and one week in Lower Saxony State Office for Consumer Protection and Food Safety (LAVES) in Oldenburg, Germany to understand the structure, plan and surveillance programs to assess risk of agricultural products at central and state levels in Germany. Furthermore, the visitors gained first-hand experience about the practices to asses risk at industrial level.

The 5-day study assignment on Food Safety Legislation and Governance held during the Summer Academy in Global Food Law & Policy in Bilbao, Spain brought together international practitioners, policymakers, industry representatives and leading academics working in the field of food law and policy. This assignment provided an expert from the China National Center for Food Safety Risk Assessment (CFSA) an unique opportunity for professional development and networking in an inter-disciplinary setting. Thus allowed her to understand the analysis and development of international regulations governing food risk and the

The Summer Academy in Global Food Law & Policy on 23 July 2015, Bilbao, Spain
challenges to enforce them at domestic and international level. Additionally, this activity allowed CFSA to establish links with the EU and global leaders in the area of risk governance.

Reinforcing the regulatory framework of one of China’s high-growth potential industries

China will have the world’s biggest film market by 2020, equalling that at the United States, currently the world's largest, as early as 2017.
The National People's Congress (NPC) is currently reviewing China’s first film industry promotion law. To assist the NPC in its legislative review process, the EUCTP II organised a seminar and a study assignment to Europe to provide China’s top legislators with a better understanding of relevant EU Member States’ experiences with film industry regulation. In August 2015, China’s Ministry of Finance and State Administration of Press, Publication, Radio, Film and Television jointly published a circular on the collection and use of special funds for the development of China’s film industry. On 31st October 2015, a draftof China's first film industry promotion law was submitted to the NPC Standing Committee for a first-round review.
National People's Congress officials at the European Commission (DG CNECT) on 30 June 2015, Brussels, Belgium

Reinforcing China’s efforts in curbing insider trading and market abuse

In recent years, the China Securities Regulatory Commission(CSRC) has focused on cracking down on insider trading and market manipulation,illegal practices which jeopardize the transparency and integrity of capital markets as well investors' rights.

China Securities Regulatory Commission officials at the Netherlands Authority for Financial Markets on 17 June 2015 in Amsterdam, Netherlands
In the last year and a half, more than one hundred individuals and companies have been referred to public security authorities by the CSRC for engaging in illegal trading via the use of inside information. In order to support both the CSRC and Chinese stock exchanges’ efforts in curbing insider trading and market abuse, EUCTP II organised a study assignment for six CSRC, the China Securities Depository and Clearing Corporation Limited, the China Securities Investor Protection Funds the China Securities Finance Corporation Limited, to better understand the European legislative framework in this field. China’s national prosecuting departments have recently announced that a crackdown at financial crime is to be stepped up.

Reinforcing China’s integration into the global financial system

China is actively involved in several international financial organisations such as the World Bank, the IMF and some regional/ sub-regional development banks. The People’s Bank of China has been looking at joining more international financial institutions such as the European Bank for Reconstruction and Development (EBRD) and at cooperating further with regional development banks. To support the People's Bank of China in these efforts, EUCTP II organised a study assignment on the blueprint for infrastructure construction in Europe and the role of the development of financial institutions. In October 2015, China made a formal request to become a member of the EBRD.

People's Bank of China officials meet European Commission officials (DG FISMA and ECFIN) on 24 September 2015 in Brussels, Belgium

Minimising duplication and compliance costs at the border with improved inter-agency coordination and single window customs clearance

At any border there are multiple agencies supervising and transacting with traders to ensure control, security and revenue collection. Better coordination amongst these agencies can ensure their functions are carried out effectively without unduly burdening traders. Coordinated border management can have a powerful trade facilitation effect for traders, reducing costs and delays, and improving certainty and consistency. At the same time, significant benefits can accrue to government as it can ensure more efficient service delivery and economies of scale; pooling of resources) and reducing redundancies. In addition to better inter-agency coordination, implementing a single window can significantly reduce compliance costs by enabling traders to submit all information and documents through one entry point to satisfy all import, export and transit related regulatory requirements. Implementation requires concerted institutional reforms and clear operating guidelines, supplemented by new ICT systems to channel information both between border agencies and government and traders.

Trade facilitation is a priority under the EU-China Strategic Framework on Customs Cooperation 2014-17 (the Customs Dialogue). Accordingly, EUCTP II organised the Study assignment on coordinated border management and single windowin Sweden and Belgium from 31 August–4 September 2015. The Chinese delegation attended a workshop with industry experts designing single window.

People's Bank of China officials meet European Commission officials (DG FISMA and ECFIN) on 24 September 2015 in Brussels, Belgium
systems, studied the Swedish single window system and visited the Sweden-Norway Svinesund border post to see how inter-agency coordination can significantly speed up customs clearance of international trade. Experts and the Chinese delegation jointly drafted a general roadmap of the legal, institutional and operational steps required to realise a single window. The detailed study assignment was supplemented by meetings in Brussels with the World Customs Organisation and Belgian Customs, to discuss how to use various international standards and tools to design a best practice single window that complements other systems in place internationally.

Mapping the value added in EU-China trade for trade negotiations and analysis

As the production of goods becomes more globalised, policy makers need new tools to measure the value added across supply chains. To enable policy makers to identify, for example, the position of the domestic microchip industry in global value chains (GVC) for personal computers, gross trade data needs to be complemented with data on trade in value added (TiVA). TiVA accounting practices trace the origin and destination of goods and services trade, compared with conventional trade measurements, which track the gross value of final goods flowing across borders. Given that China is embarking on a new wave of reforms to diversify its economy, better tools to estimate TiVA will provide crucial data and evidence to the Chinese authorities on which to develop new economic policies. It will also enable more fine-grained analysis of the EU-China trade relationship in terms of value chains, and industry and firm competitiveness which can inform trade negotiations and other cooperation activities.

Under the Customs Dialogue, the EU and China are continuing work to enhance mutual understanding of each other’s trade statistics. Accordingly, EUCTP II organised the Study assignment on estimation of TiVA which took place between 24-29 September 2015. Eight delegates from the General Administration of Customs (GACC), the National Bureau of Statistics (NBS) and the Chinese Academy of Science (CAS) attended two full days of technical discussions with the OECD which, with the WTO, is leading international efforts to better understand TiVA. Discussions encompassed the latest methodologies being developed to gather and analyse TiVA data and how to improve the design of National Accounts to create a more transparent, comparable set of data for policy-makers internationally. The delegation then attended 1.5 days of technical discussions with Statistics Netherlands to study the Dutch model for creating an official national set of TiVA data for policy-makers, traders and the general public which the Chinese agencies are considering emulating to improve the transparency and accuracy of TiVA data.