The EU-China Business Association organized a webinar focusing on the importance of co-operation between the EU and China in the field of research and science and how this can support economic recovery online on 14 October 2020.

Ms. Gwenn Sonck, Executive Director of the EU-China Business Association, welcomed the participants to the webinar. The EU and China have cooperated in the fields of research and science for many years. Both sides have benefited from this relationship. There is an ongoing dialogue and cooperation process in the areas of science and research. China is becoming a stronger power. The next meeting of EU leaders will take place on November 16 and will focus on the future of EU-China relations. Europe exports €4 billion worth of products to China each year. Export-led growth from Europe to China is a key policy instrument that will assist Europe to recover from the economic challenges that it faces at this time. In the first six months of this year China has become the main trading partner of the EU, passing the U.S. 25% of all research and development is carried out in Europe, and it is home to some of the finest scientists in the world. One-third of all scientific publications that are subject to peer review globally are carried out by European scientists and researchers. The new Horizon innovation and science instrument will be a key driver for economic growth in Europe between now and 2027. Meanwhile, 2.5% of China’s GDP is spent on research activities. China is a growing force in the field of innovation in several areas, such as the internet industry and artificial intelligence.

Mrs. Frances Fitzgerald, MEP, former Deputy Irish Prime Minister (Tánaiste), former Minister for Business Enterprise & Innovation: The lens trough which we see science and innovation is extremely important. At present everything is viewed through the lenses of Covid-19, climate change, digital, green, and they are all interconnected. The key point is that they are global. No one country or member state can do it on their own. What drives science and innovation? It’s about bringing the best talents and scientific endeavors in the world together. It is about cooperation and our research institutes and businesses exchanging best practices. You need to create an environment in which you can think well and can consider the issues almost without interruption. We have been through difficult times due to the pandemic and the global situation. We have to work on the issues to create an environment where innovation and jobs can thrive. We need an environment where there are shared values, openness, transparency and cooperation. In order to do that, we need to tackle those geopolitical issues. From a European perspective it is very important that there is cooperation and reciprocity. We need to have agreed rules, mutual trust, and support for a rules-based international trading system. Reciprocity must underpin the bilateral relationship. When the EU leaders discuss China-EU relations, those points will be given careful consideration.

The Horizon program offers enormous opportunities. There are hundreds of Chinese companies who are already involved. There is more money in the EU budget than ever before. China invests 2.5% of its GDP in scientific research on an annual basis, while the EU wants to invest 3%, which is a key target of the Horizon program. We have to be honest and open about respect for human rights. The Hong Kong situation has made relations fraught in many areas. Unless we put those difficult issues on the table as well, and find a way forward in terms of mutual understanding and shared values, then that actually has an impact on everything else. It creates a more difficult trading environment and barriers to exchange of knowledge which we do not want to see. Europe has many challenges in innovation. We see the extraordinary progress in China in innovation and engineering in many areas. It is definitely to the mutual benefit of the world if we can work closely together on those shared agreements about the basic principles. Take a Covid vaccine as an example. Where is that going to come from? Mainly it will come from global cooperation.

Colin Stevens wrote a report on the webinar for EU reporter. He adds that Mrs. Fitzgerald noted that “455 Chinese companies took part in the Horizon 2020 research, innovation and science programme during the period 2014-2020. Chinese companies will continue to participate in Horizon Europe, which is the new research, innovation and science framework programme that will run between the period 2021-2027.”

Mr. Zhiwei Song, President of the EU-China Association For Entrepreneurship and Innovation, said his association started in 2017 with the ambition to build up a platform with innovation as a core and to offer professional services. The Association offers incubation services for start-ups and companies who want to develop further. We bring knowledge from Europe to China, and vice versa, Mr. Song said. We promote communication between the two continents. The Association also plays the role of consultant for companies who want to work together. We help them to understand culture, regulations, and the way of working to make their collaboration smooth. The Association is organizing online discussions and presentations for Chinese who want to work in Europe and Europeans who want to work in China. It is working together with European associations to promote innovation collaboration. Colin Stevens adds in EU Reporter that Mr. Song said the Association “is participating in European Commission supported programmes such as Enrich and Euraxess”.

Colin Stevens wrote in EU Reporter on the contributions to the webinar of Mrs. Veerle Van Wassenhove and Mr. Yu Zhigao of Bekaert. Veerle Van Wassenhove is the Vice-President for R&D and Innovation at Bekaert, a globally leading company with headquarters in Belgium and a strong research foothold in China. She said that “Bekaert’s research operations in China leverages the company’s global innovation capabilities. Together, we are building expertise for both the Chinese market and globally. Covid-19 brought along some difficulties because we, as researchers, want to keep direct contact with our customers in our technology approach, but we manage.”

Yu Zhigao is the SVP Technology Rubber Reinforcement and head of the Bardec (R&D center in China). He said that “Bekaert has very strong confidence in China. There is excellent research and technical expertise in China. The company operates 18 sites in 10 cities in China and employs 220 researchers in the Jiangyin R&D center and 250 engineers and technicians in the Engineering site. The Chinese operations contribute to both world class research actions and to achieving the strategies of the company. Our research teams in China create value for our customers.”

Abraham Liukang, Chief Representative to the EU Institutions, Huawei: EU cooperation with China is very important in developing ICT-related products and services and the end-user has benefited a lot. On September 29, EU governments at a meeting of the EU Competition Council approved a series of new laws to govern the framework of Horizon Europe for the period 2021-2027. One of the new rules involves the participation of the legal entities in Horizon Europe, setting up many public-private partnerships. Horizon Europe will remain an open program, which means the best researchers from all over the world will continue to be able to contribute to their scientific excellence and discoveries into the work of Horizon Europe. Open and transparent procedures are important because it is the most effective way to ensure the strongest and most innovative results to tackle the problems that society faces, such as climate change and the pandemic. More and more research programs emanating from the Ministry of Science and Technology in China are open to international participation as well. Huawei always had a open approach in global research activities. In Europe, Huawei has 23 research centers in 12 countries. Europeans are by nature excellent software developers. That is why Huawei’s microwave research center is in Milan, the wireless one is in Stockholm, the open innovation center is in Paris, and the optical network research center in Munich. Huawei has been an active participant in both the seventh research and technological framework program (2007-2013) and more recently in Horizon 2020.

In total, Huawei has taken part in 50 collaborative research activities and different EU research initiatives. Huawei’s research activities have focused on building a new and innovative digital infrastructure. Huawei partners with over 150 universities in Europe and signed over 230 technology agreements with research and educational institutes in Europe. It is trough these activities that Huawei has become the sixth most innovative company in the world according to BCC. Huawei has been based in Europe for 20 years. The first research center was set up in Sweden in 2000. Over the next five years Huawei plans to invest €100 million in its AI ecosystem program in Europe and will work with its partners to shape the AI industry in Europe. It also wants to be an active participant in the Article 187 joint undertaking for smart networks and services, a key cornerstone of the EU policy. International cooperation within this framework is very important. Huawei looks forward to engage in Horizon Europe and positively deliver on the policy agenda of the European Union.

Colin Stevens quotes Abraham Liukang in EU Reporter as saying that “The roll-out of 5G has been politicized and this has had the direct effect of slowing down 5G deployment in Europe. Huawei takes security issues very seriously and that is why Huawei has a cyber-security evaluation center in the UK and an agreement on security issues with BSI in Germany”.

What are the challenges in China-EU cooperation moving forward? Fitzgerald: In some ways we are at a crossroads. There is a lot of motivation on both sides to move forward and to make sure that we continue to collaborate. People want to develop and strengthen the relationship. Having an open dialogue is the best way. In the EU there is a call for the policy adopted by all member states to be united and balanced. You are going to see more cooperation across EU institutions on China to have a unified approach. We need strict reciprocity. The question of state aid rules and transparency is going to be very important for Europe.

Mr. Haakma: Could you elaborate on the U.S. ban on Huawei’s innovation in the networks in Europe? Fitzgerald: One of the most dynamic discussions since I became an MEP was the seminar held in the European Parliament on that topic. Unless we have a very open discussion at the highest levels between China and Europe we will have those issues. Europe has had a very good relationship with the U.S. In terms of trade it is very fraught at the moment also related to the WTO.

Abraham Liukang: If you only look at the headlines, people may have the impression that Huawei only arrived in Europe last night, and you have to be careful of a stranger, but Huawei has been in Europe for 20 years and had a long and difficult journey to be trusted. Huawei had a comprehensive collaboration with the UK government for the past 10 years on cyber security. Huawei is one of the most audited companies in the industry and based on facts also the most secure. Looking at the track record, Edward Snowden told us, actual security in cyberspace is irrelevant to vendors. Because the issue was politicized it has slowed down 5G in Europe. If there is not such extreme pressure from the U.S. on European governments and also on the customers directly, there could be better relations between Huawei and European stakeholders. If by the end of the year there is a comprehensive investment agreement and the U.S. still has it extra-territorial law enforcement, there will be serious challenges.

Mrs. Fitzgerald: It is a very particular situation with the U.S. at the moment. Geopolitics is a reality that is impacting companies. Very important for the EU to consider is what is in the best interests of our citizens. There are human rights and values issues in the relationship with China. The more transparency on these issues, the more responses you will get that companies like to see. It is all interconnected.

Q&A: How is China improving IP protection and what are the best practices? Abraham Liukang: We always emphasize the importance of IPR protection. We benefit from global IP protection. As a private company, we make sure that Huawei has the highest standards, and try to be the best example of a Chinese company with headquarters in China and as an international company in Europe. In the IPR case we are one of the best examples. We are ranked No 1 in the European Patent Office in terms of patents granted. Mr. Yu Zhigao: When you set up a plant in China, you face this issue. As a leading company, people try to get everything from us. You need to classify the different levels of your confidential information and build up the system to protect it. A second issue is how to retain our people. Good cooperation with the local authorities is also important.

Is closer cooperation with China an option to limit the EU’s current over-reliance on U.S. companies’ data to advance their position in artificial intelligence? Abraham Liukang: The ideal situation is that the whole world becomes one system and there is no worry that technology would be weaponized for political reasons. The over-reliance in Europe in the data sector has been emphasized and in the case of semiconductors that for raw materials they rely on China too much. If everybody closes its door and creates an end-to-end solution of its own, it is neither practical, nor cost effective. One solution is to use the open source platform.

Is there a risk that decoupling would happen in ICT products with one set of standards for the U.S. and one for China? Zhiwei Song: If that happens it would be a pity for the whole world. We need to try to avoid having two standards. Abraham Liukang: The world used to have many standards for telecom: GSM, CDMA, TDMA, but now there is one 5G standard. What made this happen? Europe played a key role with an open and international cooperation. Europe has a role to play again in the 6th era.

Closing remarks of Mr. Jochum Haakma, Chairman EU-China Business Association: The EU-China Business Association wants to offer a platform to businesses and to policy makers as well to have an exchange of views on different topics related to EU-China Issues. We try to promote trade links between Europe and China. We link companies together where they have a common interest and we advise on best practices that will drive the EU-China bilateral trade relationship. The new EU investment screening regulation came into force only last Sunday so EU Member states will have to consult with Brussels. China should take on a leadership role. It would be a very positive development if China and Europe were to agree on the terms of the new investment treaty.

Colin Stevens in EU Reporter quotes Mr. Haakma as saying that “the reality is that we do live in a complex world – where trade, politics and security issues at times seem to be inter-linked. The digital economy is growing faster than the global economy. Increased activity within the digital economy is going to play a key role in driving growth in both Europe and China.”

Link to Colin Stevens’ article in EU Reporter