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CHINA-EU-TRADE,LEAD
European firms say China business ‘more difficult’
BEIJING, June 20, 2018 (BSS/AFP) – European companies complain they still
face a difficult business climate in China despite Beijing’s pledges of
openness, with about half saying it has become tougher in the past year,
according to a survey released Wednesday.
The study comes as President Xi Jinping looks to portray the world’s
number two as being at the forefront of the globalisation while trade
tensions with the United States rise.
“The root of the tension we see today starts with a China that has not
opened up and reformed as quickly as it promised in its rhetoric,” said Mats
Harborn, president of the European Union Chamber of Commerce in China.
Among the litany of complaints for European companies were the uncertain
legal environment, higher cost of labour, regulatory headaches and the “Great
Firewall” that censors much of the global internet.
“As its economy matures, the longstanding inefficiencies in China’s
business environment are rendered all the more glaring,” according to the
report by the EU chamber.
Harborn told reporters that the “regulatory environment is actually
holding the economy back.”
“Time is running out for China to continue its reform process,” Harborn
said, noting 2018 must be the year Beijing acts.
Instead Beijing has backtracked in some areas. New cybersecurity
regulations make it more costly to jump the firewall, requiring businesses to
sign up for expensive and problem-plagued government-approved virtual private
networks that allow users to circumvent filters and access the global
internet.
Two-thirds of companies believe that censorship and blocking of certain
sites has a negative impact on their business, while only 23 percent say the
state-sanctioned VPNs are efficient.
This is the “great contradiction,” said Harborn.
“We have China which claims itself a leader in globalisation, talking of
the importance of integration, but the cybersecurity law is creating
problems.”
The survey found 48 percent of European firms felt it had become “more
difficult” to do business in the past 12 months.
And a fifth say they have been victims of forced technology transfers, a
practice denounced fiercely by Washington as it carries out a probe on the
issue while threatening tariffs in retaliation.
And there is little optimism for the future as nearly half of European
businesses believe barriers to business will harden in the coming five years,
while a quarter believe they will never witness a “significant opening” of
the market.
But progress was reported in some areas.
Some 61 percent of the 532 European companies polled by the chamber said
they are “optimistic” about the growth of their sector in the country,
compared with 55 percent the previous year.
Just over half of surveyed companies, 51 percent, consider that they are
treated “unfavourably” compared to their local competitors, compared to 54
percent last year.
BSS/AFP/HR/1320