European Business in China Position Paper 2013/2014 launched
European Union Chamber of Commerce in China: Sustained growth requires a fundamental reassessment of the Government’s role in the business environment.
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While China could previously make a choice between economic restructuring and maintaining growth, economic restructuring is now necessary to maintain growth, according to the European Union Chamber of Commerce in China, which this month launched the 13th annual edition of its primary lobbying document, the European Business in China Position Paper 2013/2014.
Widespread consensus has already formed that China needs to embark on a new round of structural reforms. Some small steps have been taken, but greater play must be given to market forces to ensure that China’s increasingly limited resources are directed to the most productive areas of society. To bring this about, the government must firstly fundamentally reassess its role in the business environment.
European Chamber President Davide Cucino:
China’s leaders have already identified a better use of market forces as the catalyst to transform China’s economy.The tricky part is making this happen. While the government must still strengthen its own role as a regulator, real reform demands a vast ceding of political control over the business environment. This is a difficult and daunting process, but market forces can only be strengthened if the government steps back from its current overly-dominant role.
Liberalisation has stalled and domestic companies—in particular state-owned enterprises—continue to receive partisan treatment.This plays out through nationalistic industrial policies and through conditions being placed on the opening of markets to foreign investment, like technology transfer requirements. These policies are misguided as they don’t produce the incentives for companies to strive for the things that China really needs right now, such as productivity-enhancing innovation or efficient usage of capital and resources. The government must rely more on the natural functioning of a fair and open competitive marketplace. Doing so will assist the development of private enterprises, lead to a more equitable distribution of wealth, improve China’s external reputation and, most importantly, give companies the freedom and incentives to innovate and employ the tools, technologies and systems to meet China’s societal needs.
About the European Union Chamber of Commerce in China
The European Union Chamber of Commerce in China was founded by 51 European member companies in October 2000 to give European businesses a common voice across different business sectors, nationalities and regions of China. The European Chamber now has more than 1,700 member companies and is active in seven chapters across nine cities: Beijing, Nanjing, the Pearl River Delta (Guangzhou and Shenzhen), Shanghai, Shenyang, South-west China (Chengdu and Chongqing) and Tianjin. The Chamber is recognised by the European Commission and the Chinese government as the authoritative and independent voice of European business in China.
About the Position Paper
The Position Paper is the European Chamber’s primary annual publication. This 13th annual edition of the Position Paper offers both Chinese policy-makers over 800 recommendations that draw directly from the knowledge and expertise of the European Chamber’s 1,700 member companies. The recommendations were formulated over a six-month consultative process by 34 separate working groups, covering 26 vertical industry sectors and 8 horizontal cross-industry sectors, as well as through 8 local papers offering recommendations to municipal governments.
The Position Paper contains general and specific recommendations to Chinese policy-makers outlining suggested steps to improve the Chinese business environment. These cover general recommendations to improve the administrative and operational business environment, as well as recommendations aimed at identifying areas where China could benefit from giving greater market access to foreign-invested enterprises. Of the 219 key recommendations identified by the working groups within the Position Paper, nearly one-third of these are identified as clearly relating to market access issues.
Over the coming year, the European Chamber will present the Position Paper to relevant Chinese authorities at both ministerial level and working level to identify possibilities to cooperate together to promote the implementation of these recommendations. The Position Paper will also be presented to European authorities, both at the European Union and in EU member states in mid September as part of the European Chamber’s annual European Tour.
Download this year’s Position paper