In Belgium, this unnoticed revolution of the profession was brought about, among other by a rapidly- growing Chinese vendor, ZTE, the sole provider of one of the Belgian operators for 3G and 4G networks. Thanks to the Chinese company, the Belgian operator concerned, which had until then a less-performing mobile network, could overtake its competitors as regards to the country’s 4G mobile internet coverage.
The industry is now preparing the mobile network technology of tomorrow, the fifth generation technology or 5G. Again, close cooperation with the Chinese industry will be beneficial for European operators and their customers.
China and the EU have chosen to join hands to make all this possible, by concluding a strategic agreement on 5G. This fifth generation technology is what will make futuristic applications such as automated driving, drone delivery and remote healthcare become part of our daily lives. Working together on this new technology is not simply a technical matter. It is instead a strategic decision. At the time of the signature of the agreement in September 2015, Günther Oettinger, European Commissioner for the Digital Economy and Society, stated: ‘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's a crucial step in making 5G a success.’
Europe has signed similar agreements with South Korea, Japan and most recently with Brazil. But, as the Belgian experience with 4G illustrates, none of these are comparable to the one signed with China. The reason is simple. China is home to two of the world’s largest vendors of telecom equipment – the other two being the Europeans Ericsson and Nokia. It is also home to the world’s largest telecom operator, China Mobile, who boasts over 800 million customers. China has a unique scale and mass that cannot be compared to any other country in the world. Europe can only win by working aside China in this field.
As important and strategic as this agreement may be, it means nothing unless it is followed by concrete action. Following the ministerial signature, an industrial agreement was signed between the EU’s 5G PPP Association and China’s IMT-2020 (5G) Promotion Association, the respective industrial associations dedicated to the research and development of 5G. I would like to see the European and the Chinese industry work together not only on research and development within the respective R&D associations, but also on concrete projects, which can show the average consumer what 5G is really about. Just like what TeliaSonera and Ericsson are doing by bringing 5G to Stockholm and Tallinn by 2018, similar initiatives could be run by a consortium of Chinese and European players, working together on the creation of 5G cities, both in Europe and in China. This would demonstrate what the two sides together can achieve to build citizens-friendly yet futuristic smart cities.
A second important point is interoperability. Let us take e-commerce to illustrate the concept. Cross-border online trade between Europe and China allows China’s rising middle class consumers to enjoy high-quality European products and services. At the same time, it makes it easier for European businesses to reach the world’s largest e-commerce market – China has just recently surpassed the US, with 413 million online shoppers spending $672bn as of end 2015, according to Emarketer (versus $347bn spent by US online shoppers). The size of the Chinese online market – expected to rise to $1tn in 2017 - can offer enormous growth opportunities for European companies in all sectors and especially for small and medium companies, who cannot afford to set up a physical presence in China. Alibaba - China’s biggest e-commerce player - has opened new offices in the UK and Italy, with expansion plans in Germany, France and Belgium, with one very clear mission: provide a ‘one-stop shop’ for local brands and merchants, identifying the most suitable local products for the Chinese market, helping local businesses sell on Alibaba’s platforms, assisting with outbound and inbound logistics, and facilitating online payments for Chinese consumers and offline payments for Chinese tourists.
Alibaba and similar platforms can play a very important role in the bilateral trade relationship, to the extent that such cooperation with the European SME community should be endorsed at the political level. In order to make cross-border online commerce a reality, all unnecessary regulatory barriers should be eliminated. A safe interoperable system of payments is indispensable, so that a Chinese customer can use his local credit cards to buy from Europe, and vice-versa. Consumers should enjoy a similar level of protection when they buy cross-border as when they buy within national borders. Cybersecurity provisions should be harmonised, so that frauds are effectively tackled. China has just completed a draft version of the country's first E-commerce law, setting up rules for online transactions and service safety, data protection, infringements upon customers, market order fair competition and so on. Europe should keep a close eye on these important legislations, as it will guide the sector’s future development. More than that, a China-EU E-commerce taskforce should be set up to discuss the issue.
The third point is trust. We cannot talk about 5G cities or proliferation of cross-border online trade, if people do not trust the system. We should thus reflect on mechanisms to turn citizens into netizens, demonstrating to them that the Internet is a powerful tool to improve their everyday lives, their job prospects, their life conditions, and that putting personal data on the web or making online payments are reliable operations. China has a much higher adoption rate of technology-enabled payment systems than Europe. Through the development WeChat – sometimes improperly referred to as the Chinese WhatsApp – China has perhaps something to teach us. The cooperation with China on the digital agenda is one of the most strategic fields of the existing bilateral partnership.
During his first ever visit to Brussels last year, Minister Lu Wei, Director of the Cyberspace Administration of China, suggested that China and Europe should build a Digital Silk Road, hinting at focusing cooperation between China and Europe on the digital economy. I hope that Commissioner Oettinger will convince his fellow commissioners and the national governments to seize the opportunity.
This article is part of Friends of Europe’s Policy Paper ‘EU-China: New Directions, New Priorities‘ which brings together the views of Friends of Europe’s large network of scholars, policymakers and business representatives on the future of EU-China relations. These articles will provide immediate input for the EU-China Summit on 12-13 July 2016, but their value and relevance goes well beyond this year. They set the tone for EU-China relations over the next decade.
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