EU-China Trade Project II

EU-China Trade Project II

Cooperation and Development Section ■ Delegation of the European Union to China and Mongolia

Cooperation Section

EU-China Trade Project II

Support to China’s Sustainable Trade and

Investment System

Project Background

Since China joined the WTO in 2001, the country’s economy has been growing at an average two-digit rate up to 2007.China’s unprecedented growth has created a large market for trade and investment, rapidly changed the landscape of global competition and made China susceptible to world economic uncertainty such as the financial crisis.

While economic growth has delivered higher incomesand is the greatest contributor towards the attainment of the First Millennium Goal to eradicate extreme poverty and hunger, this rapid growth has also resulted in considerable income and regional disparities as well as environment degradation. It is therefore of critical importance to underpin China’s achievements on poverty alleviation, provide continued technical assistance to integrating China into the global economy and ensure a more balanced and sustainable global trade.

The project further responds to the European Parliament’s call to the Commission to further continue the policy of engagement and dialogue with China. It is also in line with China’s newly released 12th 5 year plan (2011-15) that provide a blueprint for continued reform and prioritise overall sustainable development.

EU-China trade has increased dramatically in recent years with trade in goods amounting to €296 billion (2009) and in services €31 billion (2009). China is now the EU's second trading partner and the biggest source of imports, while the EU is China's biggest trading partner and export market

Project Overall Objectives

The overall objective of the project to which this Technical Assistance will contribute to is as follows:

To support China’s economic, trade and investment reform in line with China’s sustainable development path.

Estimated Project Results

C1 – Services industries:

R1aAn improved regulatory framework and legal certainty in the sectors being supported;

R1bImproved competition in specific sectors leading to new, cheaper and more efficient services;

R1cImproved institutional capacity for financial system supervision.

C2 – Quality infrastructure/technical barriers to trade:

R2aChina's quality infrastructure (standards, conformity assessment, testing) further aligned with international standards, improved quality and safety of products and services in China and facilitated trade.

R2bImproved cooperation and stronger alliances built between Chinese national and provincial quality infrastructure institutions and trade associations and related international bodies and counterparts.

R2cImproved domestic capacity to administer standards, facilitated trade particularly for SMEs and contribution to the further dissemination of information on standards and technical regulations.

R2dBetter standardisation and technical regulations based on international best practice contributes to an improved R&D environment and technical innovation in China.

R2eCommunication between quality infrastructure authorities, institutions and associations improved.

R2fThe role of the demand side is reinforced with consumers better informed and organised, enabling consumers to participate in better market surveillance mechanisms especially on safety issues.

R2gAwareness raised on ICT standards and their potential impact on international trade and the multilateral trading system.

R2hUnderstanding on the TBT Agreement in central and local governments improved.

C3 – Agriculture and agro-food/ sanitary and phytosanitary (SPS) measures:

R3aProgress made towards a safer agriculture/ food industry, which is more closely harmonised with international standards to meet expectations of both domestic and consumers in export markets.

R3bContributed to the prevention of food safety crises.

R3cBusiness operators better involved in food safety policies and implementation.

R3dUnderstanding on the SPS Agreement in central and local governments increased.

R3eAwareness raised on private standards and their impacts on food producing and international trade.

C4 – Customs and trade-related regulatory systems:

R4aOverall business environment facilitated as a result of improved efficiency and effectiveness of customs and import and export of goods through simplified procedures, elimination of duplication and redundancy, reduced transaction costs and time to clear goods as well as increased transparency and accountability in line with international rules and norms.

R4bMore efficient risk based controls, strengthened administrative capacity and advanced reform process of China Customs and related agencies (incl. local) involved in the control of goods.

C5 Horizontal issues and ad-hoc requests

R5aChinese relations with the EU and international trade and investment related bodies enhanced.

R5bSustainable development facilitated through incorporation of environmentally friendly principles into trade and investment related legislation and regulation.

R5cContributed to improved and more transparent trade and investment legislation and policy based on the principles of good governance.

R5dImproved capacity of Chinese institutions in key policy areas related to trade and investment, advanced the country's national development agenda and contributed to poverty alleviation.

Main Project Activities

The project provides technical assistance at the central administrative level on issues of policy, legislative and regulatory developments and at the provincial level on issues of enforcement of trade and investment law and strengthening of robust international trade and investment ties.

The technical assistance support will concentrate on five sector components:

1. Services industries: further develop the regulatory framework for services to enable

consumers to benefit from more competitive, liberalized and efficient services;

2. Quality infrastructure / technical barriers to trade: continue ongoing efforts in

developing and harmonizing China’s quality infrastructure in line with international standards

and best practices;

3. Agriculture and agro-food /sanitary and phyto-sanitary measures: strengthen the

capacity of the agriculture sector to promote sanitary and phytosanitary compliance, improve

food safety and contribute to rural development;

4. Customs and import/export regulatory and tariff systems: modernize customs to raise

efficiency, improve administrative capacity and increase accountability leading to an improved

business climate for exports and imports;

5. Horizontal issues: ensure good governance in its trade and investment framework in

particular in cross-cutting areas of public procurement, investment, intellectual property rights,

competition policy, green economy and corporate social responsibility;

The intervention strategy for the project components, namely the prioritisation of issues to be addressed and the choice of activities will be largely determined by the relevant EU-China Economic, Trade and Regulatory dialogues. Sector specific activities to be supported by the project are drawn up taking into account the strategic objectives of these Dialogues.

Support will take the form of expert advice, studies, development of information portals and databases, capacity building, training, conferences, workshops, study tours, internships and other forms of technical assistance.

Updated May 2015