China's Digital Product Passport Developments

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China's Central Role in the Global DPP Landscape

China's position as the world's largest manufacturing economy and the EU's biggest trading partner in goods makes its response to Digital Product Passport requirements uniquely consequential. As the EU's ESPR mandates DPPs across an expanding range of product categories, Chinese manufacturers face an enormous compliance challenge that could reshape the country's export relationships with Europe and beyond.

The scale of China's manufacturing output means that DPP requirements will affect millions of businesses and billions of products annually. From consumer electronics and textiles to batteries, steel, and household appliances, Chinese-manufactured goods are present in virtually every product category that the ESPR is expected to cover. How China navigates this transition will influence not only Chinese businesses but the entire global supply chain ecosystem.

China's approach to DPPs is characterised by a combination of domestic innovation and pragmatic engagement with international standards. While the country has developed several product traceability systems for its domestic market, the challenge of aligning these with EU requirements presents both technical and political complexities that are still being worked through.

China's Domestic Product Traceability Systems

China has invested heavily in product traceability systems over the past decade, driven primarily by food safety concerns and the government's broader digitalisation agenda. The National Product Quality Traceability Platform, overseen by the State Administration for Market Regulation, provides a framework for tracking products from manufacture to consumer. This system has been most extensively deployed in food and pharmaceutical sectors but is being extended to other product categories.

The Chinese government's Industrial Internet initiative has also created digital infrastructure relevant to DPP implementation. This programme, which aims to connect manufacturing facilities through standardised data platforms, has been adopted by thousands of enterprises across China's industrial base. The data collection capabilities built through this initiative could, in principle, be adapted to generate DPP-compliant product information.

However, significant gaps remain between China's domestic traceability systems and the requirements of EU Digital Product Passports. Chinese systems have been designed primarily for domestic regulatory oversight and supply chain management, with different data standards, access protocols, and governance frameworks than those envisioned by the ESPR. Bridging these differences will require substantial technical harmonisation and, potentially, new bilateral agreements between China and the EU.

Battery Passports: China as a Test Case

The battery sector provides the most advanced example of Chinese engagement with DPP requirements. China dominates global battery production, manufacturing the majority of lithium-ion batteries used in electric vehicles and energy storage systems worldwide. The EU Battery Regulation, which mandates battery passports from 2027, directly affects Chinese battery manufacturers supplying the European market.

Major Chinese battery producers including CATL, BYD, and EVE Energy have been actively preparing for battery passport requirements. These companies have invested in data management systems, supply chain traceability programmes, and third-party verification processes to meet EU specifications. Their efforts provide a template for how Chinese manufacturers in other sectors might approach DPP compliance.

• Lessons from China's battery passport preparation include:
• Large manufacturers can adapt to DPP requirements relatively quickly when market access is at stake
• Supply chain data collection is the most challenging aspect, particularly for raw materials sourcing
• Chinese companies are willing to invest significantly when regulatory deadlines are clear and binding
• Interoperability between Chinese and European data systems remains an unresolved technical challenge
• Smaller battery manufacturers face greater difficulties and may require government support

Standards and Technical Alignment

China's Standardisation Administration has been monitoring EU DPP technical standards development and has begun its own parallel work on product data standards. The Guobiao standards system, China's national standards framework, includes several recently published or drafted standards on product lifecycle data, digital identifiers, and environmental information disclosure that show awareness of EU DPP concepts.

The question of standards interoperability is particularly sensitive in the China-EU context. Both sides have legitimate interests in maintaining sovereignty over their standards systems while ensuring that cross-border trade is not unnecessarily impeded. The World Trade Organization's Technical Barriers to Trade Agreement provides a framework for managing these tensions, but the practical details of how Chinese and EU DPP systems will interoperate remain to be resolved.

Chinese participation in ISO and IEC technical committees working on DPP-related international standards has been active, reflecting the country's strategy of engaging with international standardisation processes to ensure its interests are represented. Understanding how DPPs work at a technical level is essential for appreciating the complexity of the interoperability challenges that lie ahead.

The SME Challenge in Chinese Manufacturing

While China's large manufacturers and export-oriented enterprises are generally well positioned to adapt to DPP requirements, the country's vast base of small and medium-sized enterprises faces significant challenges. China has over 40 million SMEs, many of which participate in global supply chains as sub-suppliers, component manufacturers, or processors. These businesses often lack the digital infrastructure, technical expertise, and financial resources needed to implement DPP-compliant data systems.

The Chinese government has recognised this challenge and is exploring support mechanisms. Provincial and municipal governments in major manufacturing regions such as Guangdong, Zhejiang, and Jiangsu have begun offering subsidies and technical assistance for digital transformation programmes that include product data management capabilities. Industry associations in key export sectors are also developing guidance and training materials tailored to SME needs.

For European businesses sourcing from China, the SME challenge has direct implications. As the data requirements for DPPs extend through supply chains, European importers and brands will need to assess whether their Chinese suppliers can provide the required data. Where capability gaps exist, collaborative investment in supplier digitalisation may be necessary to maintain supply chain continuity.

Geopolitical Dimensions and Data Sovereignty

The DPP discussion between China and the EU is inevitably coloured by broader geopolitical dynamics. Data sovereignty concerns are particularly prominent: the ESPR requires that DPP data be accessible through EU-hosted or EU-approved registries, raising questions about how Chinese manufacturers' data will be stored, accessed, and governed. China's own data security laws impose restrictions on cross-border data transfers, creating potential conflicts with EU DPP data accessibility requirements.

These tensions are not merely theoretical. The practical implementation of DPPs will require Chinese manufacturers to share detailed information about their manufacturing processes, supply chains, and material compositions through systems accessible to EU authorities and consumers. Navigating the intersection of EU transparency requirements and Chinese data governance preferences will be one of the most complex aspects of DPP implementation in the China-EU trade context.

Industry stakeholders on both sides have called for pragmatic solutions, such as data intermediary platforms that can satisfy both jurisdictions' requirements, or mutual recognition agreements for data verification processes. The outcome of these discussions will have significant implications for the practical workability of DPPs in the world's largest bilateral trade relationship.

What This Means for Global Supply Chains

China's approach to DPPs will ripple through global supply chains in ways that affect businesses far beyond the China-EU trade corridor. As the primary manufacturer for many of the world's consumer and industrial goods, China's DPP readiness will determine the pace at which global DPP adoption can proceed. If Chinese manufacturers struggle to comply, the resulting supply chain disruptions could affect businesses worldwide.

Understanding what Digital Product Passports entail and how they interact with Chinese manufacturing realities is essential for any business with China-dependent supply chains. The ESPR regulation sets the requirements, but the practical implementation will be shaped by how effectively Chinese industry rises to the challenge.

For businesses sourcing from China, proactive engagement with suppliers on DPP preparedness is advisable. Waiting for regulatory deadlines to force action risks supply chain disruptions and increased costs. By contrast, early collaboration with Chinese suppliers on data systems, verification processes, and capability building can create competitive advantages and ensure continuity of supply as DPP requirements come into force across successive product categories.