European Institute for Asian Studies
Towards an EU-China Digital Dialogue: The need for a constructive balance between a synergetic relationship and competition
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Towards an EU-China Digital Dialogue: The need for a constructive balance between a synergetic relationship and competition

Towards an EU-China Digital Dialogue: The need for a constructive balance between a synergetic relationship and competition

01/07/2020

Digital connectivity, digital economy and cybersecurity have become quite important and sensitive matters in the framework of EU dialogue and bilateral engagement between EU and China. A bilateral dialogue started in 2009, focusing on Information Technology, Telecommunications, and the use of the Internet. In 2013, a new “EU-China 2020 Strategic Agenda for Cooperation” was agreed and, in this context, the initial focus was put on the Internet and the information society. This policy agenda was progressively expanded in both scope and specialisation. In 2015, a Joint Declaration on strategic cooperation on 5G mobile networks was signed in Beijing, in the framework of the EU-China High-Level Economic and Trade Dialogue. On that occasion, Commissioner Günther Oettinger stated: “5G will be the backbone of our digital economies and societies worldwide. This is why we strongly support and seek a global consensus and cooperation on 5G. With today’s signature with China, the EU has now teamed up with the most important Asian partners in a global race to make 5G a reality by 2020. It is a crucial step in making 5G a success.”

Under this Declaration, the EU and China were committed to reaching a global understanding on the concept, basic functionalities, key technologies and timeline for 5G implementation. It was also agreed to explore possibilities to cooperate and implement joint research actions in the area of 5G and facilitate bilateral participation of enterprises in 5G research projects in China and the EU. The EU and China also decided to jointly promote global standardisation for 5G in the framework of the works being carried out by the 3rd Generation Partnership Project (3GPP) and the International Telecommunication Union (ITU). They were expected to cooperate also to facilitate the identification of the most promising radio frequency bands to meet the new spectrum requirements for 5G and jointly explore the possibilities to strengthen cooperation on 5G applications especially in the area of the Internet of Things (IoT).

Both Parties were also committed to ensure reciprocity and openness in terms of access to 5G networks’ research funding, and market access, as well as in Chinese and EU membership to 5G associations. The European Commission decided to invest EUR 700 million through the Horizon 2020 programme to support research and innovation in 5G.

Also other common projects have been developed on research, innovation and standardisation of digital technologies, including in areas such as Smart Cities and Internet governance.

More importantly, there has been a rapidly expanding and closer cooperation, between business communities, as Chinese and European ICT companies are now part of the same value chain. While China strongly reaffirmed its commitment to developing digital connectivity with the EU in the framework of the BRI initiative in its 2018 Policy Paper on EU-China cooperation, the EU’s engagement in this sector was re-launched in the 2019 Europe-Asia Connectivity Strategy, where it was stated that “the EU should promote a peaceful, secure and open ICT environment, while addressing cyber security threats and protecting human rights and freedoms on-line, including personal data protection [through] a coherent regulatory approach.”

In the specific case of a bilateral digital dialogue with China, the EU’s approach would be to promote “principles of market access and a level playing field, as well as […] international standards within initiatives on connectivity”. These principles were at the core of the Joint statement of the 2019 EU-China Summit. At the same time, the EU position towards a strengthened European digital dialogue with China has become more cautious, especially in the aftermath of the publication of the European Commission’s Communication of 12 March 2019 on “EU-China –A strategic outlook”, where China is designated as “an economic competitor in the pursuit of technological leadership”.

Most of the 10 actions proposed by the Commission are indeed linked to digital connectivity. The EU suggests measures aimed at protecting the “EU industrial competitiveness and strategic autonomy”. Overall, digital connectivity arguably is an area of both cooperation and competition in relations between the European Union and China. Beijing and Brussels are increasingly relying on each other to make their digital economies grow, and joint development strategies can give them an edge in exploiting the full potential of advanced digital technologies. In this respect, dialogue would imply the need for a balance to be struck between competition and the advantages of a more synergistic relationship.

On the other hand, if a number of economic, political and ethical challenges are left unaddressed, this could hinder further cooperation.

To address growing EU concerns on 5G matters, the European Commission adopted a Recommendation in January 2020 – in the form of a Toolbox – for a common EU approach to security risks related to the installation of 5G networks by non-EU technology providers, building on coordinated EU risk assessment and risk-management measures, effective cooperation and exchange of information frameworks, as well as to develop a joint EU situational awareness covering critical communication networks.

In his remarks following the EU-China Strategic Dialogue held virtually on 9 June 2020, HRVP Josep Borrell reiterated the Commission’s views with regard to 5G, as well as the participation of European companies in the development of the 5G network in China, for which there is still significant potential.

Being part of the discussions addressing the openness of the Chinese market and the development of European investments, this imbalance is something that concerns the EU. This message should be addressed in order to create a well-balanced EU-China digital dialogue and cooperation.

Security concerns are important for all sides but they should not be politicised. Though one part of the decision making process may be political, the most important part should be driven by market forces. Problems arise when politics does not correspond with market rules and needs.

Business will always find a way, and explore new markets potential. The mandates given to government is to streamline the markets with regulatory frameworks, not to block market evolution with bureaucratic barriers for purely political reasons. The political decisions need to give a vision for structuring the markets with regulations and standards so that business can be streamlined.

The markets are not waiting and the digital economy is developing extremely quickly, so government efforts should be made to keep up with the technological evolutions. For the EU it is imperative that bureaucratic slowness and decision making does not prevent EU companies from maintaining parity with the global developments in technical innovation and standards.

Therefore, it is paramount that the stalled EU-China Digital Dialogue is reinvigorated.

Ultimately, this digital dialogue should be depoliticised and focused on technical standards and certification, whilst also addressing (cyber) security concerns. The EU should be realistic yet not naïve, and not let itself be influenced by populistic fearmongering, and US election fever, in pursuing this dialogue.

Author: Axel Goethals, CEO, European Institute for Asian Studies 



European Institute for Asian Studies

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