European firms say China business 'more difficult'

June 20, 2018
European businesses say it has become harder to do business in China over the past year
European businesses say it has become harder to do business in China over the past year

European companies complain they still face a tough business climate in China despite Beijing's pledges of openness, with about half saying it has become tougher in the past year, according to a survey released Wednesday.

The study comes as President Xi Jinping looks to portray the world's number two as being at the forefront of the globalisation cause just as the United States appears to be stepping back from the world stage.

Among the litany of complaints were the uncertain legal environment, higher cost of labour, regulatory headaches and the "Great Firewall" that censors much of the .

"As its economy matures, the longstanding inefficiencies in China's environment are rendered all the more glaring," according to the report by the European Union Chamber of Commerce in China.

Mats Harborn, the chamber's president, echoed those concerns, telling journalists that "the regulatory environment is actually holding the economy back."

New cybersecurity regulations make it more costly to jump the firewall, requiring businesses to sign up for expensive government-approved that allow users to circumvent filters and access the global internet.

Two-thirds of companies believe that censorship and blocking of certain sites has a negative impact on their business.

This is the "great contradiction," said Harborn.

"We have China which claims itself a leader in globalisation, talking of the importance of integration, but the cybersecurity law is creating problems."

The survey found 48 prcent of European firms felt it had become "more difficult" to do business in the past 12 months.

And a fifth say they have been victims of forced technology transfers, a practice denounced fiercely by Washington as it carries out a probe on the issue while threatening tariffs in retaliation.

And there is little optimism for the future as nearly half of European businesses believe barriers to business will harden in the coming five years, while a quarter believe they will never witness a "significant opening" of the market.

But progress was reported in some areas.

Some 61 percent of the 532 European companies polled by the chamber said they are "optimistic" about the growth of their sector in the country, compared with 55 percent the previous year.

Just over half of surveyed companies, 51 percent, consider that they are treated "unfavourably" compared to their local competitors, compared to 54 percent last year.

Explore further: Survey: Companies in China feel pressure to give up tech

Related Stories

China directs users to approved VPNs as firewall tightens

January 30, 2018

China vowed Tuesday to force both local and foreign companies and individuals to use only government-approved software to access the global internet, as overseas firms fear losing unrestricted online services under an impending ...

Foreign companies in China brace for VPN crackdown

March 30, 2018

Chinese people and foreign firms are girding for a weekend deadline that will curb the use of unlicensed software to circumvent internet controls, as the government plugs holes in its "Great Firewall".

Foreign companies feel China targets them in investigations

February 11, 2015

Nearly half of foreign companies in China feel singled out in a wave of anti-monopoly and other investigations, and a growing number are deciding not to expand their investments, the American Chamber of Commerce in China ...

China postpones portion of cybersecurity law

May 31, 2017

China has postponed enforcement of part of a cybersecurity law that companies warn violates Beijing's free-trade pledges but says most of it will take effect Thursday as planned.

Recommended for you

Coffee-based colloids for direct solar absorption

March 22, 2019

Solar energy is one of the most promising resources to help reduce fossil fuel consumption and mitigate greenhouse gas emissions to power a sustainable future. Devices presently in use to convert solar energy into thermal ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.