'We want to be treated equally'

European business group joins Americans in calling for 'removal of chinese trade bias'

European companies are committed to development in China and will continue to explore new opportunities in the world's second-largest major economy, European Union Chamber of Commerce in China said on Sept 6, while reiterating its calls for equal treatment.

In its annual position paper, which voices the key concerns of European companies in China and puts forward recommendations to Chinese and European policymakers, the EUCCC says European companies will continue to invest in China.

In the annual business confidence survey in China published in May, the EUCCC said 74 percent of the 557 respondents stated that China is becoming increasingly important in their company's overall global strategy.

As many as 63 percent of the respondents said they were planning new investments in China.

In the position paper, the chamber reiterates the commitment of European companies to China and says the advanced and ecologically friendly technologies and services of European companies provide better choices and values to China.

During German Chancellor Angela Merkel's visit to China on Aug 30 and 31, Airbus announced plans to build an assembly line worth $3.2 billion in Tianjin. Volkswagen has also committed about $290 million to build a car-parts factory in Tianjin.

However, the EUCCC also calls for equal treatment of European companies in China, and says they can be of much assistance to China's transformation. "China's State-led investment development model has supported growth over the past 30 years, but is by design unequal and no longer sustainable. To realize the new growth model, bias against foreign and domestic private investment must change," says Dirk Moens, secretary-general of the EUCCC.

"Things have to be done differently. The topics we are talking about are very similar with previous years, and I believe the new thing is that there is a need to act quickly."

Moens says he believes China can get to a new stage of development by its own, but it will take a long time.

In April, the American Chamber of Commerce in China also made similar urges in its 2012 American Business in China white paper.

The report says the export- and investment-led models that drove the growth of the past 10 years is not a formula that will carry China successfully through the next decade, and successful rebalancing will require fundamental reforms in China's energy, capital and labor markets, as well as a renewed commitment to market opening.

Equal market access is also one point the EUCCC has been stressing for a long time. "In many industries, things do not change the way we would like them to. It is not good for investment. I believe it also slows down the development of China," says Moens.

Moens mentions that industries such as telecommunications and energy, which are mainly regulated by public procurement, have tough restrictions on European companies. However, with Chinese companies' intentions to enter such sectors in Europe, the EUCCC is expecting China to create similarly welcoming conditions for European companies to compete in China.

Jean-Claude Prenez, president of the France-China Electricity Partnership, an organization made up of France's nuclear-components suppliers with business in China, says a level playing field is important for China to further develop its nuclear-power sector.

"It is true that China has made a lot of progress but French companies still have many state-of-art technologies and products that China can benefit from," he says.

China's attractive nuclear market has lured many French companies; the partnership's membership jumped from 54 companies in 2009 to 82 now. According to Prenez, about 50 percent of them have built their production facilities in China.

"It is increasingly challenging for foreign firms to get orders in this sector in China, which may stop many investors with top technology based outside China," he says.

The EUCCC's Moens says he believes the opening of such markets in China can also help ease the development of Chinese companies in Europe.

"There is a growing gap between what Chinese companies can do and we encourage them to do in Europe, and what European companies cannot do in China. If that gap gets too big, then it will create resistance in Europe," he says.

Nie Pingxiang, a researcher with the Chinese Academy of International Trade and Economic Cooperation, says China will definitely open up industries such as telecommunications, energy and banking, just not as fast as the EU and US hope.

"It will happen, but it must be a gradual process, since China is still exploring some of these industries in terms of the legal environment, market regulation and business models. The sudden opening of markets before China is ready will lead to chaos if regulation is not in place," she says.

In the paper, the EUCCC also praises China's efforts in improving the business environment in sectors including aviation, banking and securities, information security and insurance.

Contact the writers at yanyiqi@chinadaily.com.cn and mengjing@chinadaily.com.cn.

(China Daily 09/07/2012 page3)