EU business lobby urges China to walk the talk on market opening

BEIJING (Reuters) - A top European business lobby in China urged the country on Wednesday to “walk the talk” on free trade and globalization, calling for an EU-China investment treaty within 12 months, as officials from both sides prepare for a summit this week.

FILE PHOTO: Flags of European Union and China are pictured during the China-EU summit at the Great Hall of the People in Beijing, China, July 12, 2016. REUTERS/Jason Lee/File Photo

At the summit in Brussels on Thursday and Friday, European officials will press China for progress on an investment deal to widen market access for European companies in the world’s second-largest economy.

Chinese President Xi Jinping has vowed greater openness in the economy, and Chinese officials say they are determined to promote the EU-China investment deal, negotiations for which were launched in 2013.

But after 13 rounds of talks, EU officials have suggested it will be hard to make progress unless China moves forward with a so-called “negative list” of sectors placed off-limits to European investment.

“We want to be very ambitious. We would like to see a conclusion within 12 months. That means that very early we need to get to an offer for a negative list,” said Mats Harborn, the president of the European Union Chamber of Commerce in China.

“We would like to see that China walks the talk,” Harborn told reporters at a briefing on the chamber’s annual survey on the business climate in China.

“The negative list, we want it as short as possible,” he added. “Single digits when it comes to restricted industries.”


In the survey, the chamber issued a “wake-up call to the whole of Europe” over growing competition from Chinese firms.

Sixty percent of respondents felt that by about 2020, Chinese companies would close key innovation gaps with foreign companies. Foreign companies also face discriminatory Chinese national security policies and uneven environmental enforcement, the chamber added.

Companies had little confidence in China’s short-term reform agenda, the chamber added, with just 15 percent feeling regulatory barriers would decrease over the next five years. Forty percent expected them to increase, it added.

Beijing’s “Made in China 2025” plan calls for a dramatic increase in domestic products in 10 priority sectors, from robotics to biopharmaceuticals, that the government hopes will speed an industrial upgrade as economic growth slows.

Chinese officials say foreign companies will enjoy the same preferential policies under those plans.

Nonetheless, calls are growing in the United States and Europe for reciprocal market treatment in response to what they see as Beijing’s mercantilism.

Foreign companies also worry about new Chinese national security and cyber security regulations they feel are too broad and could be used to erect more market barriers.

Reporting by Michael Martina; Editing by Clarence Fernandez