The European Union Chamber of Commerce in China has released its European Business in China Position Paper for 2017/2018, in which it calls on the Chinese leadership to follow through on the public commitments it has made to economic globalization and openness throughout 2017.
The European Chamber has over 16 hundred members operating businesses across China and this year's position paper collected nearly 800 recommendations from those companies. The Position Paper recognizes the importance of China's plan to open up its economy and establish a level playing field for all business, as first outlined in State Council Document No. 5 in January 2017, and later elaborated upon in State Council Document No. 39.
However, the document says, the implementation of proposed measures has been slow and uneven, especially for some some industries. For example, new restrictions on food imports, coming into effect on October 1, can be expected to impede trade. Furthermore, the ongoing trend in multiple industries of huge state-owned enterprises being established through mergers poses a real threat to private businesses.
Foreign investment into the country has already been declining year-on-year during the first half of 2017. The position paper outlines practical measures that can be taken to establish China as a more attractive destination for investment. It also presents examples of non-reciprocal treatment, such as in the areas of strategic technologies and legal services, where Chinese investors currently enjoy far greater access to the European market than Europeans do in China.
"The State Council documents provide a solid framework for China to open its markets to the outside world and attract more foreign investment, and throughout this year the authorities have been very clear about what needs to be done," said European Chamber President Mats Harborn.
The European Chamber says it is fully prepared to help turn their commitments into tangible outcomes. It calls on the Chinese authorities to start the process of implementing market-driven reforms and establishing a level playing field for all businesses once the 19th national congress of the Communist Party of China has concluded.
China calls for the EU to observe the basic WTO principles
Just a day before the paper's release, China's Foreign Ministry responded to a new EU framework for investment screening proposed by the European Commission President Jean-Claude Juncker.
Some media speculate that the framework may be targeting capital from China and other countries. "We hope that in making policies, the EU can observe the basic WTO principles, especially the non-discriminatory ones, avoid protectionism and refrain from sending wrong, chaotic and negative messages to the outside world," says Lu Kang, spokesman of China's Foreign Ministry.
Lu added that developing an open world economy in which we share opportunities and interests for win-win results serves the interests of the vast majority of countries and makes an unstoppable general trend - development cannot be achieved if the door is closed. Pursuing trade and investment protectionism for the sake of short-term interests is destined to bring more harm than good.
The governments of European countries and several media have stated their opposition in public, saying that obstructing investments from outside the EU is an action of protectionism and the EU should bear in mind the interests of the majority of its members, in the spirit of openness, rather than merely being preoccupied with short-term imbalance and the interests of a small group, Lu said.