WORLD TRADE  
ORGANIZATION  G/TBT/W/256 
12 October 2005 
 (05-4652) 
Committee on Technical Barriers to Trade Original:   English 
  
CHINA'S
 TRANSITIONAL  REVIEW  MECHANISM  
Communication from the European Communities  
  The following communication, dated 10 October 2005, is being circulated at the request of 
the Delegation of the European Communities. 
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  I. CONSULTATION PROCEDURE 
1. With regard to China’s participation in the TB T notification procedure, the EC appreciates the 
effort that China has made in establishing their enquiry point and in being helpful in handling 
comments and enquiries.  The EC also notes that over the last eight months China has already notified 
more than 75 draft regulations, and that, in gene ral, they grant the recommended comment period of 
60 days.  
2. In spite of this the EC believes that the cons ultation procedure could be further improved as 
complaints have been raised by EC manufacturers in China with regard to the lack of participation of 
the foreign stake holders at the drafting stage of new technical regulations.  The EC would like China 
to agree upon a more regularised and open consultation practice. 
II. OVERREGULATION 
3. The EC would appreciate it if China would re frain from developing national standards in 
areas where international standards exist.  Too of ten national standards ar e developed or planned 
which deviate from international standards or concern areas where the market has already found 
satisfactory solutions e.g. the telecommunications field. 
A. CCC
 SYSTEM  
4. The EC would like to underline that a positiv e co-operation has been established with the 
competent Chinese authorities which allowed for encouraging improvements of the CCC system. 
5. Among the improvements which have been broug ht into the CCC scheme, the EC observes 
that a reduction in the fees for factory inspections  has been implemented and most of all follow up 
inspection can now be done by European bodies.  These are positive steps to wards the establishment 
of further co-operation between Chinese and European certification bodies.  
6. Despite the progress in the implementation of  the CCC system, it remains a burdensome, 
expensive and time-consuming confor mity assessment procedure.  It also leaves too much room for 
interpretation.  The EC sees a general need for st reamlining and simplification of the CCC system and 
welcomes the initiative of the Chinese authorities to la unch, this year, a comprehensive review of the 
CCC implementation with a view to identifying areas for improvement.  G/TBT/W/256 
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 7. The EC would like to recall its main outstanding concerns:  
(a) The uncertain application of national treatment. 
This remains a subject of complaint from  EC exporters.  For instance, exemption 
procedures are still far from being transparent.  The EC would appreciate it if the competent Chinese authorities would simplify and standardise the customs clearance 
for exemption. 
(b) The list of products subject to CCC. 
It seems that it is the intention of China to  add further industrial products to the list of 
products subject to CCC marking i.e. construction products as well as safety 
protection systems.  The EC would suggest that low-risk products do not need to be 
subject to the CCC and that simplified procedures should be explored such as 
suppliers’ declaration of conformity.  In that context the EC would like to highlight the contrast with the market access rul es in the EU, where self-declaration of 
conformity by the manufacturer is commonly used. 
(c) Certification requirements for spare parts, components and sub-assemblies. 
Spare parts, components and sub-assemblies are also subject to mandatory 
certification, even when they are intended fo r incorporation in a finished product and 
the later will be tested and certified in Chin a.  Separate certificates for each and every 
component as opposed to one single certificate for the whole product are required in the case of products imported disassembled.  The EC would like China to examine how CCC requirements could be simplified. 
(d) Confidentiality.  
The information required for the purpose of certification procedure should be treated 
as confidential.  In order to avoid any disclosure of commercially sensitive information, the EC suggests that the re quired information should be simplified. 
(e) Double certification.  
In the field of medical equipment it freque ntly occurs that safety and performance 
tests are conducted more than once by di fferent organisations. The administrative 
authorities responsible for registering, evaluating and approving medical devices entering the Chinese markets are:  the State Food and Drug Authority (SFDA), the State General Administration for Quality Supervision and Inspection and Quarantine 
(AQSIQ) and the Custom Authorities.  Repetition of the same test for different 
authorities should be avoided as this causes dela y and cost, without adding any value.  
The overlapping and unclear delineation of  regulatory and market surveillance 
responsibilities often results in redundant re quirements.  An example of this is 
duplicative on-site audits and physical t esting for several categories of medical 
devices.  Repetitive requirements also cause inflated fees.  
The double certification requirement is a common issue for other sectors like radio 
and telecommunication equipment, motor vehicles components, and cosmetics.  G/TBT/W/256 
 Page 3 
 
 
 (f) Factory Inspections. 
The EC considers that China should exem pt the inspection of the manufacturing 
 facilities of companies that have been certified to international standards  
(e.g. ISO 9001). 
In conclusion:  The EC request that China in  its review of the CCC implementation strives for 
simplification in all the above areas.  In particular, China sh ould differentiate procedures depending 
on the level of risk the product imposes.  It is also EC’s expectation that China will associate the exercise with a consultation exercise to allow stakeholders to give valuable feedback.  
B. ICT
 PRODUCTS  
1. Certification 
8. The Chinese Compulsory Certification (CCC) proce dure is applied to a wide range of the ICT 
and Consumer Electronics Products.  The ICT products are typically low-risk products that could be 
subject to simplified procedures.  China’s three- step certification system for certain ICT products 
incurs significant costs and delays. 
(a) The EC considers that the scope of regula tory requirements should be confined only 
to essential requirements (e.g. safety, EMC and efficient use of spectrum) and be 
based on international standards.  The verification of compliance with other 
requirements can be left as a matter between buyers and vendors. 
(b) The EC considers that the test reports of competent European test laboratories 
including manufacturers’ own laboratories should be acknowledged by the Chinese conformity assessment authorities. 
9. When a single device contains a combination of features (e.g. GSM and WLAN), the current 
approval process is pending the development of a t est procedure for a dual mode product although all 
relevant specifications are available. 
(a) The EC would be grateful if China would abandon developing combined test 
specifications for dual or multi mode pr oducts (e.g. including GSM and WLAN). 
This is related to the rigidity of the CC C process and could be alleviated by adopting 
a simplified procedure based on the approval of each technology separately 
2. Use and Development of national Standa rds when international standards exist 
10. The Chinese approach to national standards was discussed actively by the industry during 
2003 and 2004 with regards to the Chinese WAPI security standard for Wireless LAN (WLAN).  In 
June 2004, China decided to indefinitely postpone the implementation of the WAPI decision and the 
discussion has been less active since.  However th ere are still concerns with both the WAPI topic 
itself as well as with the principle of developing natio nal standards when international standards exist. 
11. WAPI:  While the issue of WAPI seemed to be solved in June 2004 as a result of the 
indefinite postponement of the implementation of the regulation, the issue has resurfaced in some 
news articles and within the industry rumours dur ing the spring of 2005.  The EU understanding is 
that the implementation of the WAPI regulation woul d be complicated and costly to all parts of the 
industry, both Chinese and international. G/TBT/W/256 
Page 4  
 
 (a) The EC would appreciate more openness and transparency in the preparation of 
regulatory decisions, such as the WAPI. 
(b) The EC would also appreciate if China decided that the WAPI implementation is 
cancelled rather than only postponed. 
12. Development of Chinese standards when inte rnational standards exist:  As the WAPI 
development has shown in the WTO environment it is not possible to develop closed national 
standards which are mandated for all products to be  allowed in the domestic market.  However the 
industry is receiving signals that similar developm ent continues in the Chinese ICT sector in other 
areas than WAPI, e.g. with the audi o visual coding standards (AVS). 
(a) The EC would be grateful if China would stop developing national ICT and CE 
standards in areas where international standards exist. 
3. Participation of European companies to the Chinese standardisation work 
13. In China the interest of the government and indu stry to develop national standards to the ICT 
and CE areas has been continuously increasing.  As agreed in the TBT agreement development of 
national standards is justified wh en international standards cannot be utilised.  However, in the 
Chinese standardisation organisations the particip ating companies are classified as “domestic” or 
“foreign” and the “foreign” companies are not treated as full members of the community.  Typically the “foreign” companies are expected to particip ate through joint ventures in order to have full 
membership rights and be able to vote.  This approach is against the TBT Agreement and also reduces 
the value of the Chinese standards, as a major part of the industry has not been able to contribute to 
the process.  In European and global standardisa tion organisations the nationality of the company does 
not matter. 
(a) The EU would appreciate if European companies were allowed equal rights in the 
Chinese standardisation forums and groups w ith all other participants.  This would 
encourage the European companies to full y contribute to the development of the 
standards. 
4. IPR (Intellectual Property Rights) 
14. WTO-consistent IPR legislation is in place in China but efficient administration and 
enforcement is still missing.  As Chinese companie s are entering the global market, the recognition of 
patents and related royalty paymen ts should be widely accepted acco rding to China’s commitment to 
open standards.  The recognition of individual ow ners’ patent rights and the need for payment of 
attendant royalties is fundamental to the development of a strong in tellectual property and knowledge-
based economy.  That, in turn, supports the global community’s interest in and commitment to open 
standards embodying the best technology available anyw here in the world.  In order to support these 
goals, it is important that companies who are attempti ng to license patents (in or out) do so in direct 
negotiations with the owners of such patents, s ubject to commitments made to standards bodies (e.g. 
to license essential patents under fair, reasonable a nd non-discriminatory terms).  Without such direct 
negotiations, the open standards syst em is endangered, as companies will not contribute their best 
technologies because they fear not obtaining what they  believe is a fair and reasonable return on their 
investment in R&D.  Furthermore, failure to achieve  agreements for what both  parties believe to be 
fair value (which is best determined betw een a willing licensor and licensee) undermines the 
development of a healthy and strong inte llectual property and knowledge-based economy.  G/TBT/W/256 
 Page 5 
 
 
 (a) The EU would request the Chinese Governme nt to encourage direct, unencumbered 
negotiations between Chinese and foreign IC T and CE companies regarding patent 
licenses covering products and services they plan to sell in China or elsewhere. 
In conclusion:  The EC request simplification of certification procedures and that a procedure is 
introduced which is based on the risk that the pr oduct imposes.  International standards should be 
used as far as possible.  Consultation procedures should also allow input (equal) from stakeholders, 
both domestic and foreign.  The EC also request a more efficient administration and enforcement of 
IPR issues for this sector. 
C. AUTOMOBILES  
15. The EC appreciates that, over the last three y ears, the contacts between our administrations 
have increased in frequency and also in the depth of detailed discussion.  Nevertheless the apparent 
broadening and deepening of Chinese regulations is particularly disappointing since, at our recent  
bilateral seminars and dialogues, where specific inquiries on these subjects were made, no mention 
was made by the Chinese side of the recent large-scale regulatory project. 
16. The EC notes with particular concern that China has filed nearly twenty notifications of new 
technical regulations in this sector through the WTO TB T process in June and July of this year alone.  
The EC fully supports the goals of regulating safety,  health, and environmental concerns with respect 
to motor vehicles, but feels these goals could be well achieved through harmonisation under the 
United Nations 1958 Agreement on Motor Vehicles  (under the Economic Commission for Europe, 
UNECE).  EC continues to urge China to become a Contracting Party to this Agreement. 
17. Many of these new regulations are very similar to UN Regulations under the 1958 
Agreement.  Many of them nevertheless require dup licative, costly and burdensome inspections and 
testing for China’s unique “CCC” certification and marking system, which seems to offer very little 
possibility for non-Chinese firms to perform inspec tions or offer certifications, although there are UN 
and ISO standards for doing so.  
In conclusion:  The EC is convinced that goals on safety, health and environment can be achieved 
through harmonisation of motor vehicle regula tions under the UN-ECE 1958 Agreement.  China 
implements regulations that are close to those under the UN-ECE Agreement but often with some 
small variation.  Such variation often creates tr ade barriers that are disproportionate to the 
objectives they serve to achieve.  The EC requests a more earnest effort by China to harmonise with 
the regulation adopted under the UN-ECE 1958 Ag reement and to accept certificates for vehicles 
already approved under these regulations. 
D. PHARMACEUTICALS :  ACTIVE PHARMACEUTICAL INGREDIENTS  
18. This is a long-standing issue of great concern to the industry. The difficulties faced by 
exporters of Active Pharmaceutical Ingredients (API s) were first raised by the EU chemical industry 
in 2002.  China is restricting market access fo r EU exporters of APIs by applying a series of 
discriminatory measures, including the application of  stricter standards to importers than to local 
producers.  The Chinese actions clearly aim to mainta in a high import barrier against APIs.  Despite 
continuous industry and EC action on this issue for several years, there has been no significant change 
to the Chinese practice. 
19. Chinese authorities discriminate against APIs fo r import by applying hi gher quality standards 
on those.  The stricter standards have no relation to  international standards or to health and safety 
concerns.  The quality of EU products is suitabl y controlled by the extensive and strict EU 
pharmaceutical regulations, guidelin es and monographs.  Local Chinese manufacturers only have to G/TBT/W/256 
Page 6  
 
 comply with the monographs of the Chinese Phar macopoeia and with the relatively low Chinese 
manufacturing standards.  The discriminatory, higher product quality standards imposed by the 
Chinese authorities on APIs for import take various shapes, for example upper limits of any impurity, 
clarity of solution, content of a given substance, aci dity, colour of solution, density, water content. 
20. In addition, the quality standards imposed on im ports are continuously raised because Chinese 
authorities request that importers meet the highest quality standards met by any other importer.  Thus, 
the requirements for an established importer will ch ange if a newly approved importer of the same 
API meets a higher standard.  The rising standards can be met only by an ever-decreasing number of 
foreign manufacturers, while Chinese producers remain unaffected.  
21. In a number of cases, the Chinese authorities are also imposing different testing methods on 
imports vs. locally produced produc ts to verify the specifications.  The different degree of sensitivity 
of these testing methods can make it easy for some (local producers) and difficult to impossible for other producers (importers) to meet the required standard.  This clearly creates an additional 
disadvantage for importers. 
22. The Chinese authorities charge a disproportionately high “Port Drug Inspection Fee” for the 
testing of APIs at the border.  The fee is unrelated to the actual cost of testing, which is only a fraction 
of the amount charged.  The fee adds significantly - and for products in the lower price ranges often 
decisively - to the difficulties for importers to be  competitive in the Chinese market against local 
Chinese producers who are not subject to the fee. 
In conclusion:  In several areas China has d ifferent quality standards depending on whether the 
product is domestic or imported.  China also applies discriminatory fees.  The EC requests that China 
finds a solution to these concerns and, in particul ar, applies the same standards to imported and 
domestic goods. 
E. C
OSMETICS  
23. The EC is aware and welcomes that China is taking the scientific findings of the European 
“Scientific Committee for Cosmetic Products (“SCCP ”) into consideration when regulating cosmetic 
products for the Chinese market.  The most recent example for this trend is the Chinese list of 
authorised hair dyes for the Chinese market (“pos itive list”) which follows closely the scientific 
opinions of the SCCP.  However, market access for European cosmetic products is difficult due to a 
number of obstacles in particular relating to the registration of imported cosmetic products:  
(a) Registration of New Products 
(i) Chinese cosmetics regulation distinguis hes between “ordinary cosmetics” 
(hair shampoo, hair conditioner, face wash, facial mask, colour cosmetics, 
perfume, nail decoration products) and “special use cosmetics” (sunscreen, hair grower and dyeing, deodorant, slimming products, freckle remover, 
breast beautifying, hair perming, depila tory products).  Imported ordinary 
cosmetics have to be registered with  the MoH (Ministy of Health) while 
Chinese products are subject to a facilitated regime.   Hence delays (5-12 
months) and additional costs ($ 1300-3 200) have to be borne by importing 
companies.  
(ii) The requested data to be submitted in cludes core confidential information 
such as exact percentage formula, manufacturing process, raw material 
specifications and analytical methods, etc.    G/TBT/W/256 
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 (iii) Furthermore, requests for additional information often delay the final 
approval.  European companies consid er these practices a violation of the 
national treatment principle.  
(b) Additional requirements of certificates 
(i) In addition to the above-m entioned MoH registration, AQSIQ (State General 
Administration for Quality supervis ion and Inspection and Quarantine) 
requires a pre-import “labelling certificati on” for all imported cosmetics.  The 
AQSIQ certification requisites for documents are almost a duplicate of those of the MoH.  This process can take up to 4 or even 6 months and additional 
fees are charged.  After registering the product, the importer needs to buy 
stickers from AQSIQ and to affix them on each and every package.   
The same products - when distributed throughout China – become again  
subject to local  AQSIQ bureaux requirements and often additional fees.  
In conclusion: Imports are subject to MoH registr ation which does not apply to domestic cosmetics.  
In addition, there are national and “local” certifica tion requirements by AQSIQ.  This leads to 
additional fees and unacceptable delays to market.  The EC request that China apply the same 
requirements for domestic and impor ted goods and that the certificati on requirements are harmonised 
and simplified. 
 
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