BEIJING: The EU’s commerce chief informed Beijing on Monday (Sep 25) that robust safety legal guidelines and a extra “politicised” enterprise setting have left European firms struggling to grasp their obligations and questioning their future in China.
China’s refusal to sentence ally Russia for its battle in Ukraine additionally poses a “reputational danger” for the world’s second-largest financial system, Commerce Commissioner Valdis Dombrovskis mentioned in a speech at Beijing’s Tsinghua College.
He mentioned transparency and openness had been “a profitable technique in the long term”, at a time when commerce tensions between the European bloc and China are mounting.
“China is navigating a difficult transition from an investment-led financial system to a broad-based financial system,” he mentioned.
“For this it wants to stay open.”
Dombrovskis’s four-day journey, which kicked off on Saturday, follows a report by the EU Chamber of Commerce that confirmed enterprise confidence was at one in every of its lowest ranges in years.
It additionally follows Brussels’ choice to launch a probe into Beijing’s electrical automobile subsidies.
The investigation may see the EU attempt to defend European carmakers by imposing punitive tariffs on autos it believes are unfairly bought at a lower cost.
China’s commerce ministry has condemned the EU’s “bare protectionism”, and mentioned the measures “could have a adverse impression on China-EU financial and commerce relations”.
On Monday, Dombrovskis insisted China remained a lovely funding alternative for European companies.
“The EU and China each benefited immensely from being open to the world,” he mentioned, including that “European firms nonetheless need to make investments right here – however provided that the situations are proper.”
FROM “WIN-WIN” TO “LOSE-LOSE”
Rising challenges for European enterprise in China imply that “what many noticed as a ‘win-win’ relationship in previous many years may turn into a ‘lose-lose’ dynamic within the coming years”, the commissioner mentioned.
A brand new overseas relations legislation aimed, partially, at combating overseas sanctions and a latest replace to China’s robust anti-espionage rules are of “nice concern to our enterprise neighborhood”, Dombrovskis mentioned.
“Their ambiguity permits an excessive amount of room for interpretation,” he warned.
“This implies European firms battle to grasp their compliance obligations: An element that considerably decreases enterprise confidence and deters new investments in China.”
He additionally criticised China’s refusal to sentence Russia’s battle in Ukraine, which he mentioned “is affecting the nation’s picture, not solely with European shoppers, but in addition companies”.
China has sought to place itself as a impartial social gathering within the Ukraine battle, whereas providing Moscow a significant diplomatic and monetary lifeline as its worldwide isolation deepens.
Chinese language President Xi Jinping visited Moscow in March, whereas Russian chief Vladimir Putin is because of go to China subsequent month.
“Territorial integrity has all the time been a key precept for China in worldwide diplomacy. Russia’s battle is a blatant breach of this precept,” Dombrovskis mentioned.
“So it is very tough for us to grasp China’s stance on Russia’s battle towards Ukraine, because it breaches China’s personal basic rules.”