Meeting with Director General Henrik Hololei (MOVE)
2017-02-06 | All chapters
HH opened the meeting by praising the achievements made in 2016, which was characterised by the advancement of transport agenda and deepened relationship with China in terms of infrastructure.
SM introduced Chamber participants from various areas of transport, before presenting the recent Chinese foreign investment policies, with a focus on China Manufacturing 2025 and President Xi Jinping’s Davos speech. She underlined the contradiction between China’s positive high level statements on the one hand, and the lack of concrete actions on the other. She invited industry representatives to update their respective concerns.
On aviation and aerospace, DaC reviewed the current situation of EU-China cooperation and appreciated the support from the European Commission (EC) as well as the benefits brought by the EU-China Aviation Partnership Project (APP). He also expressed hope that the Bilateral Air Services Agreement (BASA) negotiations can further help the industry. According to DaC, remaining concerns are mainly around China’s tendency to postpone the decision of some important issues in relation to market access and certification until the completion of the BASA negotiations, and also to increasing costs to operate airlines coupled with a Chinese airline subsidy system non-accessible to EU companies.
HH thanked the Chamber and its Aviation and Aerospace Working Group for the APP and hoped for continuous support and involvement of the Chamber. On BASA, he underlined the importance of an agreement truly beneficial for the EU industry, and that DG Move will continue pushing for the negotiations and for the validation of certificates.
Additional concerns raised by CS in this area included the delivery of aircrafts affected by the National Development and Reform Commission (NDRC)’s refusal to grant approval to small airlines since the end of 2015, and access to airspace.
HH said that the limited airspace is a general issue in China linked to the fact that a large chunk of airspace is controlled by the military, and also to outdated air traffic control, hence the cooperation potential with China when it comes to air traffic management. Despite the sensitivity of the issue, HH raised the possibility of having trials and demonstration programmes. With regard to approvals to small airlines, HH promised to raise to his Chinese counterparts, but feared little hope for progress. He further mentioned that he will be in Shanghai during 26-28 April for an event together with the European Aviation Safety Agency (EASA), and hoped to have another discussion with the European industry.
On logistics, TC raised the problem of lack of fair treatment for cargo airliners, and presented on the two principle policy initiatives in China:
- The very first China Transportation Development White Paper, which showed that the Ministry of Transport (MOT) is turning into a more significant stakeholder compared to the aviation, rail and postal administrations. TC commented that the details are yet to be released and the implementation should be monitored.
- The State Council Notice on Several Measures on Promoting Further Openness and Active Utilisation of Foreign Investment, which mentioned for the first time that China welcomes foreign investments in transportation infrastructure.
HH expressed interest in obtaining an English copy of the White Paper to analyse further cooperation opportunities with China, and emphasized the importance of having concrete actions. The EC side further added that there is great potential for the digitalisation of logistics which should also be connected to the Digital Single Market initiative, Internet of Things and autonomous vehicles, and that many initiatives exist to reduce the fragmentation of logistics. The EU is interested in finding a way to have better virtualisation of the logistics chain to optimise cargo flows.
On automotive, MH reported some positive developments observed over the past year, and drew the EC’s attention to the less encouraging issue of road safety, saying that the Chamber has been trying to push China to strengthen its annual safety inspection for commercial vehicles. He also mentioned China’s tendency of mixing up industrial policies and environmental policies when determining the truly sustainable transport system, by overly concentrating on developing electronic vehicles whereas largely ignoring the alternative approach of producing bio fuels.
HH admitted that electronic vehicles are also prioritised by Europe, despite their limitations. He took note of the recommendations to push for improved road safety in China, and would be happy to share EU practices in case China is interested.
FdG then underlined the negative environment that European companies are facing in China when it comes to electronic vehicles, as the country is granting high subsidies to domestic companies. This is coupled with mandated technology transfer and other restrictions.
On auto components, SB confirmed the preferential treatment to domestic companies and said the pressure comes from the very top decision-making level. He suggested the EU beware of the risks of China retaliating against non-favourable EU policies. According to SB, under China Manufacturing 2025, the country encourages foreign companies to operate locally with a clear intention to learn know-how.
With regard to connectivity, SB said there is concern that as the standardisation work is guided by the Chinese government, companies may be obliged to follow one Chinese standard whereas Europe allows for multiple standards. Obligation to use specific Chinese standards & software may lead to data leakage risks. In addition, companies are worried that China asks for the disclosure of source code used in relevant software.
HH thanked SB for sharing his concerns and admitted that the challenges he described also exist in other industries.
To summarize, on the Chamber side, MH said that China Manufacturing 2025 prioritises 4 transportation-related areas, i.e. aerospace, rail, maritime transport and new energy vehicle. He recommended DG Move to follow these areas.
HH concluded the meeting by thanking all Chamber representatives for the open exchange, emphasizing the importance of reciprocity and the respect of EU rules by Chinese companies, and saying that his administration is reviving the EU-China Transport Dialogue so that issues can be raised on high political level.
Action point
Chamber/TC to send the English translation of the China Transportation Development White Paper to HH (Logistics).