The first visit of Gunther Oettinger to Beijing on Sept 28, as European Commissioner for Digital Economy and Society, will be of utmost importance. China became the leading manufacturer of digital equipment during the last decade. The visit follows up the China-EU Summit and earlier high-level meetings.
Today, Chinese companies are exporting high-tech equipment across the world, providing employment and revenues to thousands of Chinese workers. Since the European Union is a major export market for these companies, staying in touch with key EU decision-makers in this sector is very important for China, which aims to become a leading global innovator.
The main reason of Oettinger's visit is to take part in the EU-China High-Level Economic and Trade Dialogue, but this will also be a golden opportunity for him to discuss closer cooperation with China in a number of strategic areas, such as the next generation of mobile communications (5G), also known as LTE. 5G is about 1,000 times faster than 4G.
However, 5G is not fully defined yet. The aim is to provide seamless connectivity everywhere and all times. It is not just an improvement of the current mobile technology, allowing faster smartphones and tablets. It's more than that. 5G will be the global industry standard for many technologies that will facilitate our everyday life in a wide range of areas: the Internet of the Things. It will be the start of the "digital transformation" of our life. Potentially everything can be connected－connected cars, for instance, can react autonomously to input data to brake in case of an emergency.
So how will China benefit from closer cooperation with Europe on 5G? Companies making high-tech equipment necessary for cars, trains, central heating and air-conditioning systems, refrigerators, elevators and other products will have tremendous opportunities to grow. China has the expertise and the manpower to be in the leading position to provide these new high-tech products and applications.
But the industry needs visibility on the timing of the operational launch of 5G. Companies making cars, refrigerators and other products will only buy their technologies and include them in their consumer products and appliances when 5G become reality. This is where Oettinger and chief for internet security Lu Wei play such a crucial role. We (at ChinaEU) urge the two sides to finalize as soon as possible a strategic collaboration on 5G followed by an agreement on big data and cooperation on Industry 4.0/Internet Plus.
There are three priority areas that call for action. First, spectrum. 5G will require a blend in various spectrum bands, from sub 1 GHz spectrum all the way up to the 40 GHz and even 80 GHz bands. If connected cars use different frequencies in Europe and China, it will reduce economies of scale for the production of the required equipment and complicate exports.
Second: timing. Oettinger and the European Commission are advancing efforts to ensure timely development of global standards and a spectrum management concept for 5G. China should support this move, to unlock the tremendous business opportunities of the Internet of the Things.
Third: standards. Only global standards will ensure full inter-operability of connected devices and communications networks. China and the EU could leverage their unique technological and market strengths collaboratively to establish a major strategic presence in the future 5G mobile markets globally.
The industry's awareness about these possibilities has to be raised.
But the road to 5G may be long. For example, access to new applications could be prevented, delayed or made more expensive as a consequence of patent wars, like those we saw with 3G. A joint political initiative from China and the EU would be useful to clarify the application of the intellectual property rules in this domain characterized by fast innovation, whereby new applications will necessarily build on existing elements, on which competitors may hold patents.
The author, Luigi Gambardella, is president of ChinaEU, a business-led international association aimed at intensifying joint research and business cooperation and mutual investments in Internet, telecom and hi-tech between China and Europe.
