SECURITIES

Further developing China’s basic principles for IPO registration system


China is looking at moving away from an IPO verification/filing system to an IPO reviewing system. To inform these efforts, EUCTP II organised a study visit to Europe for officials from the China Securities Regulatory Commission (CSRC) on European information disclosure rules and experiences in IPO reviewing process. Following this activity, CSRC approved 12 new IPOs in late December 2014 and it has recently been announced that China is likely to see a 60% increase in IPOs in 2015. To continue supporting China’s effort in this field, a follow up activity on the supervision and regulation of securities public offerings is scheduled to take place in 2015.


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CREATIVE AND CULTURAL INDUSTRIES & OVERALL SERVICES top

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

By 2020, China is expected to become both the world’s biggest film market and the world’s biggest e-commerce market. However, the regulatory frameworks in both industries are still a work in progress, and the applicable laws and regulations require updating, clarity and effective enforcement.

EUCTP II organised a study assignment for officials from MOFCOM to Europe aimed at improving China’s e-commerce regulatory framework by drawing on EU experience. Delegates discussed the possibility of obtaining assistance from UK practitioners to develop a framework for a Chinese e-retail index. Proposals were made to further develop trainings by European practitioners to Chinese merchants looking to trade in the UK and in other European markets. In early January 2015, it was announced that China would soon release the first draft of its E-commerce Law.
Ministry of Commerce delegates meet with representatives from the Department of Communications, Energy and Natural Resources of Ireland
Regulatory restrictions limit the current market access of foreign law firms seeking to practise in China. China’s intention to liberalise the legal services market would allow foreign law firms to operate in China and would ensure a more internationalised market. Following up on the seminar on the globalisation and regulation of the legal profession, EUCTP II organised a study assignment for the Chinese Ministry of Justice on the EU’s experience regulating and liberalising its legal services market. This study assignment is part of an ongoing, successful cooperation between the EC and the Chinese Ministry of Justice. Discussions are underway to establish future cooperation topics: cooperationor joint operation between Chinese and foreign law firms; Chinese law firms to use services provided by foreign lawyers.

Chinese officials meet with representatives from German Bar Associations in Berlin
 

Finally, to assist the National People's Congress in its legislative review process, EUCTP II organised a seminar to provide China’s top legislators with a better understanding of relevant EU Member States’ experiences with film industry regulation. Topics such as the European Union's copyright framework and Europe's various film rating systems were extensively discussed. In January 2015, China’s film director's guild called for reforms and asked for the launch of a film ratings system.


Participants at the workshop in Beijing, 5 November 2014

The delegation meets the Department of Culture of the Government of Catalonia China is still facing several challenges in the field of Creative and Cultural Industries which could hinder growth. There is a clear need for integrated strategies at the local, regional and national levels. To support China’s efforts in the field of Creative and Cultural Industries, EUCTP II organised a study assignment to Europe. Delegates were provided with concrete and successful case studies on how creative and cultural industries can promote growth and create cultural capital. It also enabled the delegation to establish fruitful connections with their counterparts in Europe.
REGULATORY REFORM top
The Chinese government is making progress in improving the development and enforcement of its administrative law by reforming government roles and responsibilities. The State Council Legislative Affairs Office (SCLAO) is increasing its efforts to reduce administrative intervention, strengthen market supervision, guarantee fair competition and improve the country’s legal system. Since 2011, EUCTP II has supported an annual study assignment on administrative law for SCLAO. In September 2014, EUCTP II supported a study assignment for 15 high-level legislative drafters and decision makers from SCLAO at both central and provincial levels. In relation to the enforcement scheme of China’s administrative law, the topics of food safety, environmental protection, and cyber security were of primary concern to the officials. High-level meetings for policy and technical exchanges were organised with more than 16 EU and MS authorities. The final study report produced by SCLAO confirmed the activity as highly relevant to their current reform priorities. It emphasised the value of establishing a unified information platform among relevant agencies which would contribute to a consistent enforcement mechanism, thus reducing the risk of unfair treatment. The report also called for further research on the relationship between China’s administrative judicial and penal system in relation to law enforcement.


Meeting with Scottish Government on environmental protection enforcement
22 September 2014
 
ANIMAL HEALTH top

Supporting sustainable technical EU-China exchanges to enhance food safety:

During the 2013 and 2014 SANCO-AQSIQ and SANCO-MOA dialogues there was a general consensus on the need to increase cooperation in the area of surveillance, risk assessment and control of animal-related diseases. During its implementation, the EUCTP II has supported a series of technical exchanges and assignments between MOA and the German Federal Institute for Risk Assessment (BfR) and the German Federal Research Institute for Animal Health, Friederich Loeffler Institute (FLI). After these activities, both German institutes signed MOUs to implement technical exchanges to enhance the capacity of MOA’s Chinese Animal Health and Epidemiology Center (CAHEC) to assess the risk represented by animal and foodborne diseases for animal origin food safety. Dr. Ma Hongshao, Director General of CAHEC and Dr. Thomas Mettenleiter, President of FLI, signing a MOU for technical exchanges between AHEC and FLI
FOOD SAFETY STANDARDS top

Supporting the development and review of food standards in China:

Forty Chinese professionals from MOA, AQSIQ, NHFPC and CFDA participated in the three-day training programme Simulation of Codex Alimentarius Sessions. The training simulated Codex Committee meetings, alternating between formal presentations and practical exercises. The activity was facilitated by members of the Codex Committee and secretariat, and experts from the European Commission. During this activity Chinese officials enhanced their knowledge and practical skills to participate actively and effectively in the Codex Alimentarius Committee meetings.

European and Chinese experts exchange technical knowledge during the simulation of Codex Alimentarius Committee sessions
ORGANIC AGRICULTURE AND PLANT HEALTH top

Supporting the harmonization of trade standards:

The study, HACCP in international transportation and mycotoxins in peanuts, responded to concerns about the high number of RASFF notifications triggered by the presence of unacceptable concentrations of mycotoxin in peanuts imported from China to the EU. Additionally, the EU Food and Veterinary Office (FVO) indicated a high incidence of aflatoxin in peanut originating in China. Consequently, based on FVO recommendations and the action plan proposed by the Chinese competent authority, the study investigated the effect of international transportation conditions (humidity and temperature in particular) on the incidence of mycotoxin infections in peanuts. In December 2014, EUCTP II and the Administration for Quality Supervision
Opening containers in the receiving dock of the importer company, in Spain, to recover dataloggers that collected container’s humidity and temperature during shipment from China to Spain
and Quarantine (AQSIQ) organised the roundtable, EU regulations to ensure safe international transportation for agricultural products, to present and discuss the results of the study. Chinese and EU experts met in Beijing and approved study. They produced a draft set of expert recommendations to decrease the incidence of RASFF notifications of mycotoxins infections in peanuts exported from China to the EU.
 
INDUSTRY SECTORS top

Support to Bilateral Regulatory Dialogues: Project support under the relevant
EU-China regulatory dialogue working groups has focused on the automotive, pharmaceuticals, cosmetics, medical devices sectors and conformity assessment.

China’s automotive market is already the world’s largest and it continues to grow. Not surprisingly, China has become the most important market for European automobile manufacturers both for local production and as an export market. Vehicle type approval is a prerequisite for meeting safety and environmental requirements for motor vehicle sales in the EU. In November 2014, EUCTP II organised a seminar in Wuhan, Hubei province, comparing International and European Standards and Regulations on vehicle homologation, and safe and efficient battery development and manufacturing before an audience of more than 70 representatives of local industries and institutions.


Mr. Ming Pingxin, WTO Coordination Office, Department of Commerce of Hubei Province
Group picture of the training session on EU-China Pharmacopoeia and Quality Standard On pharmaceuticals, EUCTP II organised a conference in Beijing in December 2014 on European Pharmacopoeia focusing on the relevant EU Directives, EU pharmacopoeia updates, active pharmaceutical ingredients monographs, quality control and other related issues essential for exporting Chinese pharmaceuticals and traditional Chinese medicines to the EU. The conference attracted more than 100 representatives from industry and other organisations.

To support legislative developments, EUCTP II supported a study comparing EU and Chinese conformity assessment procedures for consumer products. The study focused on electrical products, products intended for children, textiles and apparel, and general consumer safety to gain a better understanding of the differences in the Chinese and European approaches, their rationale and their impact on trade. The outcomes of the study were presented on a seminar in January 2015. Mr Klaus Ziegler presenting the outcomes of the comparative study on conformity assessment
COMMERCIAL FRAUD AND SMUGGLING top

Drug precursors are chemicals that are legally used and traded in industry, but when manipulated by drug traffickers they can become key ingredients in illicit drugs. Effective enforcement requires cooperation between industry and law enforcement to prevent diversion into illicit drug manufacturing. As just two examples, industry and law enforcement can cooperate to share information sharing and to develop best practice self-regulatory measures. Accordingly, EUCTP organised a Seminar on drug precursors which brought EU experts together with Chinese businesses for the first time to discuss law enforcement–industry cooperation. This was a breakthrough for EU law enforcement as it seeks to reduce the diversion of drug precursors from China into drug manufacturing operations in the EU. The seminar was attended by a number of Chinese agencies, including the Ministry of Public Security (National Narcotics Control Commission), local Public Security Bureaus, GACC and China’s workplace safety regulator. Guidelines on the secure management of non-pharmaceutical drug precursors were introduced in pilot provinces in China in late 2014. These new efforts to promote “industry as the first line of defence” were scrutinised closely by experts, providing valuable feedback as Chinese agencies consider the rollout of new rules and guidelines. Further bilateral cooperation in this area is expected in 2015-16.

EXTERNAL TRADE STATISTICS top

GACC collects and holds huge amounts of data on cross-border trade which could be used more strategically to inform economic and trade policies, and to reduce the reporting burden on industry. Better trade data analysis can also be used by companies to identify the best countries to target their export efforts. GACC is keen to boost its trade data analytical capacity, including by expanding its use of SAS data management software. Accordingly, EUCTP II supported a Study assignment on SAS software application in trade data analysis to Finnish Customs for six senior statisticians from GACC to share good practice on more sophisticated uses of SAS software. Key topics included: good practice management of Big Data to support internal business and external policy making; re-export analysis to understand relations between companies in domestic and global value chains (GVC); and techniques to estimate trade statistics for SMEs, thereby reducing the reporting burden on business. Better capacity in this area will boost the quality of GACC’s advice to trade policy-makers at a time when China is implementing reforms to boost industry participation in GVCs.

 
TRADE FACILITATION AND CUSTOMS MODERNISATION top

Quality academic education and professional training is essential for producing a highly skilled, agile customs workforce. In November 2014, EUCTP II and GACC organised a Seminar on customs professional training and capacity buildingat the Shanghai Customs College (SCC), China’s principal education and training institution for customs professionals entering government and private sector roles. The seminar was attended by senior faculty members and course designers leading SCC’s efforts to design best practice training programs. Experts from DG TAXUD and the WCO shared their expertise and experience implementing “competency based training” in Europe and internationally. Experts from the private sector briefed SCC on major international policy developments that will have an impact on customs workforce capacity, including technological change, supply chain security challenges; and the trend towards customs-business partnerships. As an outcome of the seminar: GACC has expressed interest in working with the WCO to implement competency based training; and two EU customs institutions have offered to collaborate with SCC on bilateral training/internship programs.