An interview with Cyrus Ma, Vice Chairman of the Chamber’s Quality and Safety Services Working Group
A holder of a PhD in economics from Peking University, Ma worked as a corporate international trade compliance officer before moving into the testing, inspection and certification (TIC) industry with Bureau Veritas, where he first became involved with the Chamber. He has been in his current position with SGS for the past five years. In the following interview, Ma shares his views on China’s TIC industry, his expectations for the EU-China investment agreement and some of the working group’s lobbying successes.
When did you first become involved with Chamber?
I have been a member since working at Bureau Veritas but my actual involvement began when I started working for SGS.
What was it that made you want to become involved?
In my industry there has historically been a lot of government involvement in daily operations. Companies find themselves in situations where they have to comply with laws that are not particularly lawful, laws that have been conceived somewhat randomly. They are not comfortable raising their concerns with authorities in case they have more pressure exerted on them for doing so. I realised that lobbying is an effective way of solving these kinds of problems, and the Chamber is the perfect place for this to take place.
Why did you decide to run for the position of vice chair?
The idea is that everyone in the Chamber should be more actively involved, in order to have better cooperation. I was the chairman at the beginning, when this working group was created. In the second year, Bureau Veritas took the chair and in the third year TÜV became the chair. In this way we are able to coordinate much more fluently and make the working group more efficient.
What are the main contributing factors to China’s poor track record in quality and safety?
The system. The system is the primary problem. Some people claim that it is because China is still in a developmental stage, yet most of the population in coastal regions have an income that has reached the same level as developed countries. This means that the relatively low pace of development in the industry does not really relate to GDP development. China has a system that cannot keep pace with economic development, this is the key issue.
What fundamental things need to change to improve this situation?
On the legislative side, the laws that empower the government allow them to go beyond their jurisdiction, but also beyond their capabilities. This has resulted in too many, expensive mandatory standards covering the industry. This is a typical service market, but the government is not able to act as a typical service provider because they are law enforcers. That’s one thing.
The evolution of China’s civil law has had a big impact. In 2010, China introduced a Tort Liability Law, which deals specifically with product liability. In the same year China also introduced a law that enforced citizens’ personal rights and property rights. We believe that these two laws are good enough, but some procedural laws must be introduced that empower consumers on the one side to play the game with producers on the other. The government should not come in between, but instead function in a supervisory capacity and allow the two sides to deal with each other.
On the administrative side, we try to introduce best practices from other countries, compare with the situation in China, and then try to convince the government to go in the direction that the State Council has pointed to. This means that in certain sectors market mechanisms should play the fundamental role: we always highlight Hong Kong as a good example – it is a part of China where market forces are allowed to play a crucial role and the safety and the quality of its products is high.
Have any reforms piloted in the China (Shanghai) Pilot Free Trade Zone (CSPFTZ) had a positive impact on the TIC industry?
When the Chinese Government announced its plans to pilot reforms in the CSPFTZ, we asked, through the European Chamber, if testing centres could be permitted to operate there free from administrative intervention, and make the CSPFTZ a real testing site for reform. However, to date, we have not been successful with this request.
What are your expectations for the EU-China Comprehensive Agreement on Investment (CAI)?
We hope that the articles relating to the TIC industry in the agreement will be concrete. It should address the principles set out in the agreement, and there should be a mechanism for continuous review between the two sides. For these kind of agreements it is extremely important to have an inherent mechanism for dispute settlement so that service providers have the ability to appeal and bring certain things to the table.
Through the Chamber we put forward a request to the European Commission that the TIC industry has a dedicated chapter in the CAI. This is important because what our industry represents is a horizontal issue for all other industries. Improvements in our sector will result in improvements across all sectors. This has so far not been nailed down, but we are still trying.
What would you consider to be lobby successes for the QSS Working Group?
There are many things. On almost the final day of consultation for the latest Foreign Investment Catalogue, we were successful in lobbying to have the TIC industry removed from the ‘restricted’ category. We cited the 12th Five-Year Plan [and its statement that the TIC industry should be developed] as well as the position of the Ministry of Science and Technology that this sector is a high-tech sector that should be supported. When we stated these two points it was agreed that this sector should not be restricted.
We also advocated that vocational training should be an encouraged and supported industry – in our industry there is a lot of training provided on the certification side. Skilled training is something that is very much needed by the Chinese, so there is no reason that this should be a restricted industry. Vocational training is now in the ‘encouraged’ category.