On 14th January 2021, the European Chamber, in partnership with MERICS, released a major report, Decoupling: Severed Ties and Patchwork Globalisation, which measures the costs of decoupling for businesses operating in China. In this podcast, Business Manager for European Affairs at the European Chamber, Ester Cañada Amela, and MERICS Analyst, Caroline Meinhardt, talk about the issue of innovation decoupling.
The main findings of innovation decoupling are below:
R&D
- Although China is an increasingly attractive R&D destination, a number of issues—some long-standing and intensified by decoupling trends, others that have recently emerged as a result—constitute barriers to European companies’ R&D activities.
- In Europe, government stakeholders are re-considering their engagement with China on innovation cooperation, and the EU is working on tools to prevent unfair practices within its internal market.
- As a consequence, European businesses will encounter increased difficulties when developing both their global and China R&D strategies.
Standards
- While access to standardisation bodies in China has improved considerably in recent years, European companies—particularly in key sectors—still face informal barriers that prevent them from effectively engaging in standards-setting in China.
- These access issues become all the more relevant when considering China’s use of standardisation as a tool to advance its industrial and geopolitical agenda both at home and abroad.
- As a result, European companies may see their competitive edge being dulled and their market share reduced, while these standards-setting trends could also lead to distortion, or even fragmentation, of the global standardisation system.
Please click here to download the report.