WORLD TRADE  
ORGANIZATION  G/TBT/W/300 
5 November 2008 
 (08-5368) 
Committee on Technical Barriers to Trade Original:   English 
  
 
CHINA'S TRANSITIONAL REVIEW MECHANISM 
 
Communication from the European Communities
 
 
 The following communication, dated 5 November 2008, is being circulated at the request of 
the delegation of the European Communities . 
_______________ 
 
 
I. TRANSPARENCY AND PREDICTABILITY OF THE REGULATORY 
ENVIRONMENT 
1. The EC welcomes China's efforts towards improvi ng transparency and predictability both in 
rule-making and administrative procedures. The most notable positive development has been the 
significant increase in the frequency of public calls for comments from the Chinese regulatory 
authorities on proposed legislation, especially in th e food and public health fields. At the same time, 
however, periods for comments are sometimes still t oo short to allow stake holders to adequately 
elaborate their position.  
2. Pursuant to its WTO accession commitments, Ch ina is therefore encouraged to provide 
stakeholders with a reasonable period in which to ma ke submissions to the relevant authorities prior to 
the formal adoption of new laws and administrativ e measures. The EC wishes to stress that public 
consultation is a key element of the regulatory pr ocess, not least because it allows the early detection 
and resolution of potential problems arising in th e practical implementation and thus facilitates 
compliance. 
3. With a view to ensuring a transparent and pred ictable regulatory environment, the EC would 
also recommend China to: 
(a) systematically give public written notice of  any regulatory change in accordance with 
Article 2.11 of the TBT Agreement; 
(b) in keeping with its WTO accession commitments, establish a single official journal 
for publishing all laws, regulations and othe r measures pertaining to or affecting, inter 
alia, trade in goods; 
(c) provide for a reasonable interval between the publication of technical regulations, 
including when they take the form of compul sory standards, and their entry into force 
in order for economic operators to adapt in  accordance with Article 2.12 of the TBT 
Agreement. G/TBT/W/300 
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  II. CHINA COMPULSORY CERTIFICATION (CCC) SYSTEM 
4. On 24 June 2008, China notif ied to this Committee a Draft Amendment to Regulations on 
Compulsory Product Certification  (G/TBT/N/CHN/399). The EC welcomes this notification as a first 
step of a process involving a more substantive review of the CCC system.  
5. The EC refers to the detailed comments ma de on the notification and would appreciate 
receiving further clarification in this transitional re view in particular as regards the product scope of 
the proposed regulations and the criteria for th e choice of the applicable conformity assessment 
module in the implementing rules that the Certif ication and Accreditation Administration (CNCA) 
will have to enact for each product category. 
6. As mentioned in previous transitional reviews,  the CCC system is one of the main obstacles 
foreign companies currently face in their trade with China due to th e complexity, length and costs of 
the procedure. In particular for small and medium -sized enterprises, the burden is extremely heavy 
and in some instances simply impossible to cope with. 
7. The EC considers that the current requirements of the CCC system are not always relevant to 
the level of risk the products w ithin its scope present, which in th e EC's views implies that the CCC 
system is more trade restrictive than necessar y to fulfil China's legitimate objectives.  
8. In addition, there is a growing concern about the progressive expansion of the CCC system to 
new products and phenomena. Since the CCC mark was introduced in 2003, new product categories 
have been added almost every year and plans have been announced to start applying the CCC 
procedures in relation to the Chinese legislation on the restriction of hazardous substances and, more 
recently, in connection with information security  standards (see further in Section III below). 
9. The EC therefore strongly encourages China to  undertake a structural review of the CCC 
system as part of the implementation of the re vised framework Regulation for Compulsory Product 
Certification. Specifically, the EC invites China to  systematically apply a risk-based approach to 
conformity assessment with a view to reduci ng the number of products within CCC scope and 
ensuring that conformity assessment requirements (in particular those relating to factory inspections 
and testing and certification) are modulated according to the level of risk associated with the products 
to be regulated. 
10. The EC stands ready to assist in the process by sharing experiences with CNCA experts on 
the management of managing conformity assessment  systems for low-risk products based on the 
Supplier's Declaration of Conformity and effective market surveillance. 
11. The EC also urges China to take the oppor tunity of this CCC review to eliminate 
redundancies with approval procedures managed by ot her Chinese regulatory authorities.  In this 
regard, the EC notes as a positive development that  measures to unify testing procedures for eight 
types of medical devices were announced jointly on  11 September 2008 by the Administration for 
Quality Supervision, Inspection and Quarantine (AQSIQ) and State Food and Drug Administration 
(SFDA). The EC would be grateful if China could clarify the exact scope of those measures.  
12. The EC hopes that the solution announced for me dical devices will serve as an example to 
also address the equally long-standing concerns related to the double or even triple testing and 
certification for telecom equipment. The EC reitera tes its request to AQSIQ, CNCA and the Ministry 
of Industry and Information Technology (MIIT) to work together with a view to removing these 
redundancies.    G/TBT/W/300 
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  13. The EC understands that the substantive revi ew of the CCC will take some time. Pending 
such review, the EC nonetheless believes that there is  some scope for the immediate simplification of 
certain aspects of the current CCC system. The EC therefore invites China to give positive consideration to the five concrete proposals put forward to that effect by the EC in the last transitional 
review as well as bilaterally, as follows: 
(a) provide wider exemptions for single spare parts, components and sub-assemblies 
which (i) are solely intended for assembly  in China into a CCC certified final product 
and (ii) are not separately sold on the Chinese market; 
(b) For companies that are ISO-9001 certified, requirements already covered by such a 
certificate should not be verified again in the context of the factory inspection under 
the CCC system. 
(c) Foreign-based certification bodies should be allowed to carry out the initial factory 
inspection (as is already the case for the annual follow-up factory inspections).  
(d) Allow foreign-owned certification bodies estab lished in China to be designated and 
perform activities as CCC certification bodies un der the same terms and conditions as 
apply to Chinese-owned certification bodies. 
(e) Allow wider acceptance of test results based on international standards from foreign-
based certification bodies by exploiting the full potential of international voluntary 
schemes such as the IECEE CB scheme
1 for electrical products or, where such 
schemes are not available, based on bilatera l agreements between Chinese and foreign 
certification bodies.  
 
III. INFORMATION SECURITY TESTING AND CERTIFICATION 
14. The EC continues to have serious concerns  about the 13 proposed implementing rules for 
compulsory certification of various information technology products in relation to information 
security requirements.  Pursuant to the notified drafts, such products would be subject to the CCC 
procedures and have to comply with the Chin ese standards on encryption referenced therein.  
15. According to Decree No. 7 of 28 January 20 08 issued jointly by AQSIQ and CNCA, the 
target date for the entry into fo rce of the new requirements was 1st May 2009. Subsequently, China's 
Vice Premier Wang made in September 2008 a statement to the effect that China would delay publication of the final regulations pending di scussions between Chinese and foreign experts on 
possible approaches to information security.  
16. The EC would appreciate if China could confir m to this Committee the postponement of the 
publication and the entry into force of the proposed Regulations.  
17.  The EC welcomes the clarifications provided both in this Committee and bilaterally as well 
as China's continued willingness to maintain an  open channel of communication with concerned 
WTO members and affected stakeholders. Nonethel ess, serious concerns remain, as outlined below.  
18. First, against the stated goal of national secur ity protection, the EC strongly urges China to 
refrain from adopting any technical regulation mand ating testing and certification for information 
security purposes for products intende d for commercial or consumer use.  
                                                     
 
  1 Worldwide System for Conformity Testing and Certification of Electrotechnical Equipment and 
Components (IECEE) Certification Body (CB) Scheme. G/TBT/W/300 
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  19. Second, the EC notes that China's proposed regulations would be unprecedented and unique 
in view of their very wide product scope, the de pth of the conformity assessment envisaged and the 
corresponding very detailed information required of  companies. The EC therefore encourages China 
to pursue the dialogue with other WTO members and stakeholders with a view to an exchange of 
experiences on current government and market practices with regard to information security.  
20. Third, while sharing the objective of provi ding citizens with secure communication and 
information systems, product regulation is not always  the right means to achieve this objective, in 
particular when, as in this case, the issues are tec hnically extremely complex and require a flexible 
response. The EC considers that it will not be po ssible to reduce all information security problems 
into a single set of testable product requirements.  
21. Fourth, technology in the field of information security progresses at a very fast pace. The EC 
considers that limiting the choice of applicable technical specifications to a single set of standard requirements would stifle innovation and forecl ose the introduction of new, more advanced 
technologies in China. Also in light of the foreseeable very long certification process (according to the EC's best estimates, based on current industry prac tices, the kind of assessment envisaged in the 
proposed regulations would take no less than 9 to 12 months), the ultimate result would be that latest 
technologies could not be deployed on the Chinese market. The EC therefore has doubts whether the 
proposed regulatory approach would be effective in view of China's stated goal of upgrading the level 
of its national information security protection.  
22. Finally, the EC notes that the information th at companies would have to disclose under the 
proposed regulations is extremely sensitive IPR-prot ected proprietary information. It is the EC's 
understanding that companies would not be in a positi on to provide such information, which is vital 
for their business, to a foreign conformity assessment body. In this regard, the EC would also like to 
draw China's attention to the provisions of Article  5.2.4 of the TBT Agreement on the protection of 
legitimate commercial interest s in the framework of conformity assessment procedures.  
IV. STANDARDIZATION  
A. P
ARTICIPATION OF FOREIGN -OWNED COMPANIES ESTABLISHED IN CHINA IN DOMESTIC 
STANDARDISATION WORK  
23. The EC is concerned about foreign-owned enterp rises established in China being granted less 
favourable access to the domestic standardisation- making process than Chinese-owned enterprises.  
24. As regards national standards, according to the Standardisation Administration of China's 
(SAC) announcement of 28 January 2008 updating th e rules applicable to technical committees, 
foreign-owned companies are restricted to non- voting observer status in technical committees 
responsible for the promulga tion of national standards.  
25. As regards industry standards, according to cu rrent practice foreign companies, albeit having 
a legal entity in China, may at times only become ob servers of the relevant technical committees. In 
some cases, foreign companies are not even adm itted as observers, thus placing them at a clear 
competitive disadvantage vis-à-vis their Chinese competitors.  
26. The EC urges China to ensure a level-playing field among all companies established in 
China, regardless of nationality of the owners , by providing them with equal access to domestic 
standardisation work.  
27. Full industry participation is the key to success for any standard development. Failure to 
involve foreign-owned companies established in  China might result in the respective Chinese  G/TBT/W/300 
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  Standard Development Organizati ons not gaining access to recent technological developments, to the 
ultimate detriment of the Chinese society.  
B. IMPLEMENTATION OF INTERNATIONAL STANDARDS – NATIONAL DEVIATIONS  
28. The EC notes with appreciation China’s achievem ents with regard to the adoption rate of 
international standards and its commitments to th e continuous alignment of  its domestic technical 
regulations and standards with  international standards.  
29. The EC also wishes to positively highlight China’ s commitment to play a substantial role in 
international standardization organizations  and the related technical committees.  
30. At the same time, some concerns remain as to the availability of information regarding 
deviations of Chinese standards from corresponding inte rnational standards.  The EC urges China to 
make information on those national deviations  more transparent and accessible for economic 
operators. 
C. COMPULSORY VERSUS VOLUNTARY STANDARDS  
31. "Compulsory Standards" are a unique feature of the Chinese standardization system. They 
focus mainly on fields of specific public interest su ch as health and safety, environmental protection, 
data protection, etc.; however, they often include unrelated topics such as performance and 
interoperability requirements.  Compulsory standard s might create effective trade barriers, especially 
in cases where relevant internati onal standards favour differing techni cal solutions, or where current 
Chinese standards do not reflect latest technical developments in this field. 
32. The EC would like to draw the China’s atten tion to alternative regulatory techniques to 
compulsory standards. In the EC’s experience, compulsory standards have proven to constitute a 
major obstacle to technical innovation. They could even be detrimental to the legitimate aim being 
pursued when they are based on outdated technology. The EC therefore invites China to consider the 
benefits of a regulatory approach that combines legal requirements setting out the objectives to be attained in terms of health, safety, environmenta l protection, etc. with supporting voluntary standards 
containing detailed technical specifications and provid ing guidance how to meet those requirements.   
33. In any event, the EC invit es China to consider a specifi c approval procedure whereby 
manufacturers of new and technologically advanced pr oducts, whose technology is not yet reflected in 
existing Chinese standards, would be allowed to dem onstrate, on the basis of technical data, that the 
performance of their products in terms of saf ety, electro-magnetic immunity or emissions, 
environmental performance, etc. is at least equal to that required by the applicable compulsory standards. 
34. Another source for concern is the practice whereby standards initially developed as 
"Voluntary Industrial Standards" are later made mandatory, typically by referencing them in 
mandatory conformity assessment procedures wit hout any prior warning being given to the 
participants in the standard-making process about this policy change.  By the same token, no 
notification in accordance with the provisions of the TBT Agreement is generally given. As an 
example, please see the standard on a Unified Charger for Mobile Telecommunications Terminal 
Equipment  (YD/T 1591-2006), which had been develope d and initially adopted in December 2006 as 
a “Voluntary Industrial Standard” but was later re ndered mandatory (as of 14 June 2007) on all 
mobile phones and chargers manufactured in China in the framework of the Network Access License 
procedure operated by the then Mi nistry of Information Industry. G/TBT/W/300 
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  35. The EC takes the view that the practice of rendering voluntary industrial standards 
mandatory trough regulatory type approval is inconsis tent with the due process obligations to be 
observed in the preparation, adoption and publicatio n of technical regulations pursuant to the WTO 
TBT Agreement. The EC is of the opinion that, if a standard is made mandatory, it should take the 
form of a national technical regulation and then  notified under the TBT Agreement to the WTO. 
V. ICT PRODUCTS 
36. The EC continues to have concerns on a numb er of issues that have been discussed in 
previous transitional reviews, including, for exam ple, the practice of favouring home-grown standards 
featuring unique Chinese technologies, the overly deta iled standardisation of mobile phone features 
and components, the difficulties in placing on the Chinese market innovative products having 
multimode capabilities, and the multiple and partia lly overlapping certification procedures managed 
by different authorities.  
VI. AUTOMOBILES 
37. The EC continues to have concerns at the c ontinuous broadening and deepening of the CCC 
certification as applied to automotive components re gulations. The EC believes that the goals of 
regulating safety, health, and envir onmental concerns with respect to motor vehicles, which are shared 
by both administrations, could be well achieve d through harmonisation under the United Nations 
1958 Agreement on Motor Vehicles (under the Economic Commission for Europe, UNECE).  Thus, the EC continues to urge China to become a Contrac ting Party to this Agreement, and also to work to 
eliminate the duplicative, costly and burdensome inspections and testing of China’s unique ‘CCC’ 
certification and marking system. 
VII. PHARMACEUTICALS 
A. A
CTIVE PHARMACEUTICAL INGREDIENTS  
38. The EC recalls its concerns about the rou tine multi-sampling and testing practice mandated 
for each imported batch of active pharmaceutical ingredients (APIs) by SFDA regulations. 
39. The EC submits that this practice is unnecessa ry and should be abandoned as, in accordance 
with Article 100 of the Drug Registration Regulation , APIs are subject to the Good Manufacturing 
Practice (GMP) standards. It follows that the applied manufacturing method already effectively 
guarantees the identical nature and consistent qualit y of batches, which are among the criteria on the 
basis of which SFDA issues the import registration license. 
40. The EC is also concerned about the method of establishing standards that foreign APIs have 
to meet. The setting up of quality standards based on  the highest standard met by any given importer 
at the border is difficult to understand, as APIs  from different importers can feature different 
specifications. Hence, this approach does not necess arily ensure better quality/health protection in 
many cases.  Conversely, domestic Chinese manufacture rs only have to comply with the monographs 
of the Chinese Pharmacopoeia. 
41. Finally, the EC welcomes the fact that China has started looking into ways of reducing the 
costs of importing APIs in relation to both regist ration and testing fees and that a consultation of 
interested parties will soon be launched.  
42. In light of the above:  G/TBT/W/300 
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   (a) Could China please clarify the rationale for carrying out multi-sampling and testing 
on batches that are intrinsically homogeneous  and of consistent quality throughout? 
 (b) Could China please inform of its plans to improve the current situation as regards 
applicable standards and testing methods w ith a view to ensuring an effective level-
playing field for domestic and imported APIs, e.g. by rendering the Chinese 
Pharmacopeia applicable to imported APIs as well? 
B. PHARMACEUTICALS PRODUCTS  
43. Registration periods in China may take 3 years on average or even more (e.g. 6 to 8 years for 
vaccines), due to a number of cumbersome, lengthy and costly requirements relating in particular to clinical trial approvals. This results in the most  innovative drugs being made available to Chinese 
patients with a significant delay.  
44. Although SFDA has acknowledged the problem, no ta ngible progress has been made towards 
addressing it up to date. The EC therefore invites Chin a to expedite work towards the simplification of 
the clinical trial process as well as of the overall registration process for new drugs; 
45. Another source for concern relates to the Nati onal Reimbursement Drug List (NRDL). It is 
the EC's understanding that he list has not been upd ated since 2004. Since only products on the list 
can be reimbursed, failure to update it puts more  recent and innovative drugs at a competitive 
disadvantage. The EC urges China to ensure the r egular and systematic update of the NDRL. 
VIII.  COSMETICS 
A. P
RE-MARKET APPROVAL PROCEDURE FOR NON -SPECIAL USE IMPORTED COSMETICS  
46. The EC recalls the concerns raised in the last  transitional review with respect to the pre-
market approval procedures for non-special use import ed cosmetics, which delay their time to market 
by 4-6 months, when compared to domestic non-special use cosmetics.   
47. In this regard, the EC reitera tes its request for China to u nify the notification system currently 
in force for imported and domest ic non-special use cosmetics.  The EC considers that the 
simplification of procedures should be only a first step towards lifting all ex-ante approvals for 
imported cosmetics – regardless of the level (central or regional).  
B. COSMETICS STANDARDS  
48. The EC recalls its request for MoH and AQSIQ  to develop a single hygiene standard for 
cosmetics that would replace the two standards that are being separately enfor ced by the Ministry of 
Health (the Hygiene Standard for Cosmetics 2007)  and AQSIQ (the already outdated Standard for 
Cosmetics (GB 7916-1987) issued in 1987). 
IX. MEDICAL DEVICES 
A. REGISTRATION AND RE -REGISTRATION PROCEDURES  
49. The EC refers to the concerns raised in the last transitional review regarding the duplicative 
mandatory (re-)registration requirements enforced by SFDA and AQSIQ offering no additional safety 
benefit for patients and users.  G/TBT/W/300 
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  50. The EC recalls SFDA's intention to work to wards aligning its provisions with the AQSIQ 
legislation by prolonging the validity of registration from 4 to 5 years, as outlined in the draft revision 
of State Council Decree 276 on the Supervision a nd Administration of Medical Devices.  While 
welcoming this alignment and looking forward an upda te on the state of play on the revision, the EC 
reiterates its preference for a single, unlimited registration. 
51. As regards the safety requirements applicable to medical devices, the EC would like to recall 
its suggestion to China to follo w the guidelines developed by th e Global Harmonisation Task Force 
(GHTF) for medical devices.  For the ongoing revisi on of Decree 276 as well as the subsequent more 
specific regulation SFDA is urged to follow GHTF guide lines as much as possible.  In this context, 
the EC also recommends that SFDA adopt the GHTF classification of four categories of medical devices into the new legislation. 
B. R
EPROCESSING AND REPROCE SSED MEDICAL DEVICES  
52. The EC reiterates its request for China to treat new or fully refurbished medical devices alike.  
The EC believes that the ban on refurbished produ cts is not justified on health and safety grounds. 
The EC welcomes the fact that work has starte d in relevant Ministries towards establishing a 
regulatory framework for refurbished medical devi ces that should facilitate their placing on the 
Chinese marketing. The EC would appreciate it if Ch ina could provide an update on the state of play. 
X. TEXTILES 
A. RAW SILK QUALITY COMPULSORY CERTIFICATE  
53. The EC refers to the concerns raised in the last transitional review regarding the raw silk 
quality export compulsory certificate, which unduly restri cts access of foreign buyers to this important 
raw material. As there are no health and safety issu es at stake, the EC is of the opinion that the 
evaluation of quality of raw silk should be left to market players. Moreover, this export certificate is 
based on outdated technology and is  having a negative impact on the whole production line. The EC 
therefore urges China to elim inate the quality certificate.  
B. CONFORMITY ASSESSMENT PROCEDURES AND MARKET SURVEILLANCE MECHANISMS FOR 
TEXTILES AND FOOTWEAR  
54. The EC would like to recall its request for Ch ina to progressively replace systematic import 
commodities inspections for textiles, clothing and footwear with ra ndom import commodities 
inspections.  Furthermore, whenever appropriate, Ch ina is urged to accept suppliers’ declarations of 
conformity as assurance of conformity with applicable requirements. 
C. LABELLING REQUIREMENTS  
55. The EC reiterates its request for China to simplify labelling requirements for textiles and 
footwear products.  This would mean no requirement s for any form of prior approval registration or 
certification of labels as a conditio n for allowing the textile and foot wear goods to be placed on the 
market.  Furthermore, the amount of compulsory in formation required on labels  should be reduced to 
the minimum necessary.   
XI. TOXIC CHEMICALS 
56. The EC refers to the concerns raised in the last transitional review with respect to the 
"Regulations for Environmental Management on the First Import of Chemicals and the Import and 
Export of Toxic Chemicals”, in force since 1 January 2006.    G/TBT/W/300 
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  57. At the last transitional review, and in the successive TBT Committee meetings, China 
indicated that the Regulations were being revised and that foreign stakeholders could participate in the 
process. The EC would appreciate if China could gi ve an update on the status of the revision. 
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