Boosting Innovations: The New Era of the EU-China Economic Co-Operation - Speech by EU Commissioner Verheugen

Speech by Günter Verheugen, Vice-President of the European Commission responsible for Enterprise and Industry, "Boosting Innovations. The New Era of the EU-China Economic Co-Operation," EU-China Business Summit, Helsinki

Prime Minister Wen,
Prime Minister Vanhannen
Ministers, Excellencies
Ladies and Gentlemen

I am particularly honoured and pleased to attend today's EU-China Business Summit in Helsinki. This gives me an excellent opportunity to emphasise the increasing importance of relations between China and the EU both at business and political level. I would also like to share with you some thoughts how to make our territories more "innovation-friendly" and how to allow for a broad uptake of innovation. I am confident that our discussions today will be especially inspired by the fact that they take place in Finland, the EU Presidency in office and THE country of innovation.

Last Saturday we have witnessed a successful conclusion of EU China Summit. Cooperation between the EU and China is active. We are both engaged in a systematic and forward dialogue that ranges inter alia from economic relations, trade policy, environmental issues, science and technology to human rights. Our steady contacts reflect the high place of the EU-China relationship on the Commission's agenda. Work towards a new Partnership and Cooperation Agreement has started. I am deeply convinced that this new agreement will pave the way to a deeper, robust and enduring relationship which allows for the establishment of a balanced and fair economic environment between two powerful entities, well aware and committed to their respective responsibilities as global players.

Our strengthened relationship must go further than only touching economic aspects. The globalisation process in which China is such an important player has wider aspects and consequences. I am sure that you would all agree that we cannot ignore these. I refer, of course in particular, to the two other pillars of sustainable development, the social and environmental areas.

We all know that China has undergone an impressive economic reform process over the last ten years. Not only has economic growth been impressive, but nearly 400 million people have been lifted out of poverty. This cannot be stressed enough. It is a lesson on how economic reform and trade liberalisation can successfully transform an economy.

However, globalisation in general, and China's rise in particular, also generate fears among European citizens. We are eager to provide reassurance. But to do so we must demonstrate that we are capable of creating, with reliable partners around the world, fair and good conditions for growth and sustainable development. This is why I see the strategic partnership agreement as the central element of our relationship.

Today´s Business Summit is devoted to innovation. I am more than pleased that the Finnish Presidency has made innovation as one of its prominent topics , with good reasons. I dare to say that our future - not only in Europe but worldwide - depends on innovation.

This is why we in Europe have put innovation in the forefront of our modern industrial policy and as one of the crucial elements of our re-launched Lisbon Strategy for Growth and Jobs. It is fair to say that the European Union has an extraordinary innovation potential. We have a long-standing tradition of break-through inventions, we possess creative people and can build on our cultural diversity.

But it is also fair to say that the potential has so far not been fully exploited. We will need to combine all our efforts to make Europe a truly knowledge-based society where innovation is not hindered but encouraged, and where it is part of the core societal values. I believe that the same is also essential for China. Both of our economies have the same need for innovation. It is particularly important in seeking new and promising ways of economic co-operation., a key for competitiveness.

Tomorrow the European Commission will launch under the authority of President Barroso and myself will adopt a new strategy to boost innovation which will be subject of an in-depth discussion with the Member States under Finnish Presidency. Let me take three areas being critical for boosting innovation: (1) worldwide openness for trade and investment, (2) a favourable regulatory environment, and (3) the protection of intellectual property rights.

Firstly, access to markets worldwide enables economies of scale to develop which, in return, generate more resources to develop new technologies. Increased competition provides the incentive for firms to seek new products and above all new solutions. At the same time it is necessary to preserve a fair environment for innovators. I consider that governments should not force technological transfers and location of production. This is not only because it is contrary to WTO rules. I believe that systematic attempts to trade market access for technology will result in only the less interesting technology being made available.

Secondly, innovation requires a regulatory environment which is both predictable and flexible. Regulations that are too rigid and detailed do not boost technology development. This is why EU technical legislation is based rather on essential requirements to be fulfilled, instead of lists of technical specifications. This is also why we want to systematically assess the impact of our legislation before it is issued. The involvement of all stakeholders in preparing legislation is essential to ensure that it reflects their real needs. International standardisation is an excellent example of how the involvement of the interested parties facilitates the adoption of open and interoperable standards.

Finally, innovation cannot develop without the protection of intellectual property rights. Who would be interested to innovate if there is no guarantee that the results obtained, often after long and costly research, will not provide any returns? Yet, on the other hand, the protection of intellectual property rights must not impede the circulation of innovative ideas. A fair balance must therefore be found, but this is for enterprises themselves to negotiate and certainly not for governments to directly interfere.


Prime Ministers, Ministers, ladies and gentlemen,

Before our meeting started, I had a very enlightening discussion with some of you, and I am looking forward to the conclusions of the different workshops of the business summit. I am very much looking forward to soon meet with Minister Li Changjiang, responsible for the Administration for Quality Supervision, Inspection, and Quarantine in Brussels this month. Finally I am very excited to go on my first visit to China as Vice President for Industry and Enterprise by the end of October. I am deeply committed to use all these precious contacts and opportunities to broaden our mutual understanding, to get rid of misunderstandings and to work closely and trustfully with you on a strategic partnership.

Thank you very much for your attention.

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• "Europe and China: partnership, competition and leadership" - Speech by EU Commissioner Mandelson (7/11/2006)
• EU-China relations: Commission sets out its strategy (24/10/2006)
• Speech by EU Trade Commissioner Mandelson - "A World of Opportunity: China and the future of international trade" (8/6/2006)
• EU Trade Commissioner Mandelson urges China to improve market access, step up fight on piracy or risk protectionist backlash (8/6/2006)