EU Companies Will Not Quit on China Despite Obstacles

Source: Reuters

European companies are not quitting China for other countries despite complaints about the growing difficulty of doing business, the European Union Chamber of Commerce in China said on Thursday.

Jacques de Boisseson, the group’s president, said some of the chamber’s 1,400 members had thought about relocating because they were unable to compete equally with their local rivals.

“But we haven’t seen this movement becoming concrete, and the explanation for that is that our members are in China for the Chinese market,” de Boisseson told a news conference.

“And the business environment in China has a lot of advan- tages which make manufacturing in China very competitive compared to having it in other countries.”

De Boisseson was releasing the chamber’s annual position paper, which renewed a long-standing call for equal access to China’s markets and expressed concern that Beijing was backsliding on regulatory reform.

De Boisseson said he would not recommend that European firms stop investing in a country with such strong growth pros- pects. But companies were concerned that the business barri- ers they were encountering would dent profitability.

“The Chinese government should be careful about its policies, and there is a risk that in future, investment might be reduced,” de Boisseson said.

De Boisseson added that the chamber had been encouraged by assurances from Chinese officials, including Premier Wen Jiabao, that overseas firms would be treated on a par with their local rivals. “But the proof is in the pudding,” he said, adding that businesses wanted words to be matched by deeds, espe- cially on certification, public procurement and intellectual prop- erty rights.

EU firms grumble that China’s compulsory certification requirements, discriminatory government procurement prac- tices, and preferential treatment for products containing indig- enous intellectual property all unduly restrict their market access.