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EU Firms Want 'Concrete Action' from China on Access

European businesses are "suffering from accumulated 'promise fatigue', having witnessed a litany of assurances over recent years that never quite materialised," the position paper said.


Updated:September 19, 2017, 1:32 PM IST
EU Firms Want 'Concrete Action' from China on Access
(Representative image: Reuters)

Beijing: European companies suffer from "promise fatigue" over China's failure to follow through on pledges to open its market, the EU Chamber of Commerce in China said Tuesday (Sep 19).

The chamber issued an annual 400-page report detailing the regulatory barriers that continue to hinder investment in the world's second-largest economy.

European businesses are "suffering from accumulated 'promise fatigue', having witnessed a litany of assurances over recent years that never quite materialised," the position paper said.

The chamber urged the ruling Communist Party to "supplant words with concrete actions and provide reciprocal access to its market".

The restrictions imposed on foreign investments force companies from abroad to partner with local firms and often share vital technology - if they are not barred altogether from accessing a certain market, the chamber said.

Chinese firms face no such restrictions in EU markets, Chamber president Mats Harborn told reporters prior to the report's release.

"We are now calling for the abolition of foreign investment laws," he said, stating that they made China's investment climate too complex, unpredictable and opaque to attract foreign capital.

"The numbers speak for themselves: Chinese investments in Europe rose 77 per cent last year, while EU investments in China fell by a quarter," Harborn said. EU investment fell a further 23 per cent in the first quarter of 2017.

A May survey published by the Chamber showed 54 per cent of EU companies operating in China felt they were treated worse than local counterparts.

A study in January by the American Chamber of Commerce in China found more than four in five US companies feel the country is less welcoming to foreign businesses than in the past.

The lack of access belies the rhetoric of Chinese leaders.

In January, President Xi Jinping hailed globalisation at the World Economic Forum in Davos and insisted that China was committed to "opening up".

Later that month a government circular pledged to "create an environment of fair competition" and "strengthen efforts to attract foreign investment".

Cheese and Cybersecurity

But foreign firms still worry about the business climate in the Asian giant.

In recent weeks, Chinese customs officials barred the import of certain mould-ripened cheeses containing cultures traditionally used in Europe, including Camembert, Brie and Roquefort.

The sudden move came with little explanation, taking effect even though new national food safety standards for cheese more than two years in development had not yet been announced.

"It's very surprising, and we can't understand the rationale behind it," said Harborn.

New Chinese rules to begin October 1 that require inspection certificates even for certain low-risk food products were "out of line with international practice", the EU Chamber report stated, and could potentially dramatically reduce agriculture, food and beverage imports.

Harborn also expressed concern over China's strict new cybersecurity law, which since its implementation on June 1 has required that tech companies store user data inside the country, among other things.

Without greater transparency on China's part, the vaguely worded legislation would likely further bar fair competition and undermine trust, he said.

"A lack of trust is really detrimental for attracting foreign investment."

| Edited by: Huma Tabassum
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