Riga, June 17, 2011
A project funded by the European Union
Market potential
A rapidly growing economy
 an annual GDP growth rate of around 10% over the last
five years
 Key drivers:
 a strong trade balance
 increasing FDI: $105.7 billion in 2010 (+17.4%)
 urbanisation of China’s population: 49.7% now live
in cities, compared with just ~20% in 1982. From
2010 to 2025, 300 million Chinese now living in rural
areas will move into cities (Ministry of Housing and
Urban-Rural Development)
Challenges
 Environmental
• Heavy pollution
• Lack of water
 Energy
• Reliance on coal
• Increasing energy dependence
• Massive electricity shortages
 Social
• Aging
• Disparity of revenues
Air pollution

"Overall urban air quality is good with relatively heavy pollution in
some cities. Among 471 cities, 3.6 percent met grade 1 air
quality standard, 79.2 percent met grade 2, 15.5 percent met
grade 3 and 1.7 percent failed to met grade 3."

Interpretation: Almost one in five cities still fails to meet the low
passing grade set by the government on an annual basis.
Photograph: Guang Niu/Getty Images
Water issue


Mainland China has only a per-capita share of
2700 cubic meters per annum, ¼ of the world's
average. 2/3 of China's 660 largest cities face
water deficits. Beijing is among the cities most
affected.
"Surface water pollution across the country is still
relatively grave … 59.9 percent of rivers were
grade 3 or better, 23.7 percent of rivers were
grade 4 or 5 and 16.4 percent failed to meet any
grade standard. (China State of the Environment
2010)
Reliance on coal



China's coal consumption in 2010 was 3.2
billion metric tonnes (2.3 B in 2006)
Mainly for production of electricity (73%)
Also by some industries (Steel…)
Massive power shortage


Power shortages yearly since 2004:
insufficient generating capacity, fuel shortages,
blackout ordered to meet a year-end energyefficiency target…
deficit of 30 million kilowatt hours this summer
Social


Aging: By 2020, over 23 percent of China’s
citizenry is expected to be over age 65
(People aged 65 and older currently
constitute 8.87% of the population)
Disparity of revenues: per-capita annual
income in urban areas was about $2,500 in
2010, more than three times the $750 in
rural areas
Challenges = market opportunities
-
Emissions control and measurement systems
Equipment for green building
-
Medical equipment
Pharmaceuticals
-
Energy efficient products
Electric equipment
-
Home decoration
Consumer goods (not only luxury)
Travel
Assess these market opportunities
- Verify the reality of the market for your product:
- Right to sell your product
- Need to conform to standards
- Pricing
- Do a real market research:
- China is not a market, but many markets
- Visit a professional exhibition
- Be cautious
- Due diligence of the prospective partners
- Do not sign any contract after just one meeting
- Do not give any exclusivity
- scams
Develop a strategy
- Make sure you have the means to tackle
the challenges
- Select a limited geographical area and/or
a specific sector
- Take all the help you can get (EU SME
Centre, Embassy, IPR Helpdesk,
consultants, law firms…
STANDARDS

1)
2)
3)
The Chinese Standardisation and Conformity
Assessment System
Some Basics
China’s Standardization System
Conformity Assessment
Basic differences
EU
China

Free market access

Restricted access to the
Chinese market

Producer/ Importer must
prove that product is safe:

Compliance with
harmonized standards
gives presumption of
conformity
Government permit is
required for most products
and services before being
placed on market

For many consumer
products CCC mark is
required, along with other
certificates


CE marking is a selfdeclaration by producer
Safe products?
In Europe ...
In China ...

Sole responsibility of
producer / importer

Both government and
producer

Government controls
very few high risk
products

Proof of Conformity

Government permits

Market surveillance
activity by provincial
governments

Market surveillance
activities by Member
States
Market Access in China
For most goods, one or several pre-market approval schemes apply,
for example:


CCC Scheme: catalogue published by CNCA, based on compulsory
National Chinese Standards (GB)
Licensing Schemes controlled by various ministries, based on
technical regulations, National, and Industry standards
Goods not listed in the CCC catalogue and w/ out other specific
licensing rules, market access is free
Some goods require marks and labels on a self-declaration basis
 China Compulsory Energy label
 China RoHS declaration for electronic products
China’s regulatory system
Formal legislation
 Legislation, e.g. standardization law, consumer protection
law, energy saving law, food safety law, IP law, etc.
 Regulations, e.g. CCC market access scheme, regulations
about indigenous innovation products, etc.
 Instructions for implementation of regulations, e.g. CCC
implementation rules
Co-Regulations (soft regulation)
 Compulsory standards (part of technical regulations, but
adopted in informal process)
 Voluntary Chinese standards
Snapshot on Standardization

China has a clearly defined standardization strategy,
supported by the Government

Over 100.000 standards compared with 20.000 EN
standards

Standardization Administration of China (SAC) main
interlocutor– owns Chinese National Standards (GB
Standards)

China is very active in international standardisation
forums (ISO, IEC, ITU)
Standardization Policy

Standardization is a tool to disseminate scientific experience
and accelerate technical innovation (“leapfrog technologies”)

Standardization is a tool to develop a strong domestic
knowledge base and a related industry (“home-grown
standards”)

National safety and security interests shall be reflected in the
standardization system

Export of Chinese standards shall support Chinese trade
policies, e.g. in the field of IPR in standards
Why are standards important?

To safeguard basic protection of Human Health, Personal Property and
Safety

Standards describes the fundamental qualities for products allowed on the
Chinese market

On-going efforts to harmonize with International Norms but Chinese
deviations are common

Standards provide the legal basis for Conformity Assessment

International recognised test results are not accepted in China, with the
exception of CB reports (for electronic and electro-technical goods)

Conformity assessment can only be carried out in China
4 levels of standards
Voluntary GB Stand.
22.931
Mandatory GB Stand.
3.111
National Standards
 Sold by SAC, often in partnership with National Standards
Authorities
 Translated, at least into English
 Easy to search, using SAC web portal
Code
Content
GB
Mandatory National Standard
GB/ T
Voluntary National Standard
GB/ Z
National Guiding Technical Document
Professional Standards
 Industry Standards or Sectorial Standards
 Apply when no National GB Standard exists
 Mandatory or Voluntary
 Difficult to search, only available in Chinese
 Mostly sold in China
Code
Content
Code
Content
BB
Packaging
CH
Surveying
CB
Ship
…
Continued
Support
GB Standards can easily be identified online through
SAC search tool or with the help of national standards
organisations.
For the remaining 3 levels:
- Through service providers
- Through Industry Associations
- EU-China Standards Information Platform
- EU SME Centre
Conformity Assessment
Snapshot on Conformity Assessment
Opposite approach from EU’s ”Presumption of Compliance”
Proof of conformity falls on the testing body and Conformity
Assessment is Mandatory
Products subject to mandatory Chinese standards must be tested
Compliance testing is required before the product is allowed to enter
China
Market Access Schemes
Most common is the China Compulsory Certification (CCC)
- 23 Broad Categories
- 172 types of Products
 A number of other Market Access Schemes exists
- Radio Type Approval (SRRC) mobile phones, broadcasting equipment, RFID, etc
- Network Access License (NAL) Phones, fax, modems, routers, etc
- Information Security Certificate (CC-IS)
- Special Equipment License Boilers, pressure vessels, elevators, etc
- Industrial Product Manufacturing License
- Heavy Polluting equipment
- Phytosanitary Certificate
Sector Specific Market Access Schemes
In addition, some sectors will have seperate requirements,
in particular:
 Medical / Healthcare Equipment
 Cosmetics Products
 Food and Beverage (not including SPS issues)
CCC at a glance
 Needed in China mainland only
 Compulsory market-access license
 Focus on product safety, environmental performance, consumer protection
applies to 23 categories of products and based on Chinese national standards
(GB standards)
1. Electrical wires and cables ( total 5 categories )
2. Switches for circuits, Installation protective and connection devices
3. Low-voltage Electrical Apparatus ( 9 categories )
4. Small power motors ( 1 category)
5. Electric tools ( 16 categories )
6. Welding machines ( 15 categories )
... Etc.
CCC Exemptions
There are few exemptions to the mandatory mark. In
general, products not intended for sale or usage on the
Chinese market can be exempted from testing requirement.
Exemptions include:
- Products used at exhibition
- Special purpose products (eg. military use)
- Personal belongings
- Products imported for R&D or testing purposes
- Products for re-export
Overview of the certification process
The CCC testing procedure can generally be divided into a 5 step
process.
1. Application – The required documentation in submitted to the competent
authorities
2. Type Testing – A designated test laboratory in China will test the sample
product.
3. Factory Inspection - CQC will send representatives to inspect the
manufacturing facilities for your product. Each factory producing parts for the
final exported product needs to be inspected.
4. Evaluation – decision is made if CCC certificate is granted or not.
5. Product Marking – marking of product and packaging
6. Follow-up Factory Inspection - Manufacturing facilities needs re-inspected by
CQC every 12 to18 months
What does the CCC Mark cost?
Application fees
and superior
costs
Consulting and
translation cost
to service agent
Test fees
CCC Cost
CNCA marking
fee
Inspection fees
Travel fees and
accommodation
for testing staff
CCC Cost Expanded
Steps
Standard
Price
Note
1
Applicatio 500 CNY/ per 1000 CNY
n
application
translation fee if
not in Chinese
2
Type
Testing
3
Factory
2500
Inspection CNY/man day
fee
Depending on
Product Type
CNCA publish
price list (in
Chinese only)*
Additional cost:
Return Ticket,
Per Diem
Additional requirements
Some products will have additional requirement depending on product
qualities and functionalities
Other common requirements includes:
- Radio Type Approval (SRRC)
License required for products using radio frequency spectrum resources, such
as mobile phones, broadcasting equipment, RFID devises, etc.
- Network Access License (NAL)
License required for products needing network compatibility between equipment
and network, such as phones, fax, modems, routers, etc.
Example of Product Enquiry
Product Qualities
- Wireless Connection to internet
- Remote Communication via GPRS
- Energy Consuming
- Interface with Boiler
Certification Requirements
- CCC certification
- SRRC License
- NAL License
- Possible Special Equipment License
Labelling
Labelling requirements include:
RoHS Labelling – on self declaration basis (but
mandatory)
Energy Label – on self declaration basis (but mandatory)
 Labelling for F&B products – applying stickers on product
offering information about exact content, levels, expiration
date, etc.
General remarks
 Chinese Standards and Conformity Assessment
environment is frequently changing – it is key for
manufacturers to stay informed
- Industry associations can play an important role
 First time applicants should get assistance from
professional service providers
- Gaining experience
 Language is one of the main barriers to product
certification
- In-house language capabilities is an asset
Remarks
 Standards in China are very important
 There are ways to make them less difficult to
handle
 One of them is to use the specialists of the EU
SME Centre
Overview of the Centre
Purpose and objectives
The core purpose of the Centre is to:


Support EU SMEs to establish, develop and
maintain commercial activities in the
Chinese market
In particular, support EU SMEs without
access to national trade chamber services in
China
The EU SME Centre helps EU SMEs overcome
barriers and constraints they face in their efforts to
export to the Chinese market.
Expertise
The EU SME Centre has a multi-cultural team of 15
full-time members of staff, including advisors and
specialists on hand to offer free, confidential advice
and a range of comprehensive support services


Market Access Advisors – experts specialised
in the fields of Business Development, Legal
issues, Standards, and HR & Training
External experts – a large pool of freelance
experts on hand to offer specific sectorrelated advice
4 main areas of expertise
Business
Development
Legal Issues
Technical
issues
• Market information
(projects,
opportunities...)
• Transparency and
Predictability in the
legal system
• Product Quality
• Business Advice
• Access to the legal
information
• Conformity
Assessment
• IPR (in cooperation
with the IPR SME
Helpdesk)
• Labeling
• Matchmaking
• Business Centre
(hotdesks, meeting
rooms etc)
• Chinese Marks
Human
Resources
Issues
• Resources with
specific skill sets,
including languages
• Advice on how to
limit the turnover of
the personnel
• Referral to
trainings
sessions/expertise
• referral to service
provider (lawyer, tax
advisor, etc.)
30/11/10
Online Portal
The website aims to be a
valuable source of practical
information for professionals,
companies and trade promotion
agencies developing commercial
activities in China.
 Registration is free and allows
users to access the
-
Knowledge Centre
Ask-the-expert service
Hot-desking service
Publications
Radio Type Approval Guideline
Network Access Licence Guideline
CC-IS Guideline
Medical Devices Sector Guideline
China Compulsory
Certification Guideline
Industrial Products Manufacturing
Licence
Special Equipment Licence
General Guideline to Chinese
Labelling requirements
Energy Label Guideline
RoHS Label Guideline
Contract conclusion
IIT
Taxation of non-resident enterprise
Processing trade
ICT Sector Report
F&B Sector Report
Green Technology Report
ICT Case study (2)
F&B Case study (3)
Green Tech case study (3)
HR Recruitment Case Study
enquiries@eusmecentre.org.cn
www.eusmecentre.org.cn