European Business Lobby Sides With US in Criticizing China’s Unfair Trade Policies

June 20, 2018 Updated: June 20, 2018

BEIJING—Time is running out for Beijing to fulfill its reform promises if it hopes to maintain stable growth, a top European business lobby said on June 20, contending that the roots of U.S.-China trade tensions began in China.

Despite the Chinese regime’s repeated pledges to further open its economy, 46 percent of respondents in the European Union Chamber of Commerce in China’s annual business survey said they thought the number of regulatory obstacles they face in China would increase over the next five years.

European Chamber President Mats Harborn said at a briefing on the group’s survey that 2018 had to be the year when Beijing delivered on its promises, and that it should make serious commitments to defuse trade tensions.

“We believe also that time is running out for China to continue its reform process,” Harborn said.

Soft activity data for May showed that China’s economy is starting to cool under the weight of a multi-year crackdown on riskier lending that is pushing up borrowing costs for companies and consumers.

U.S. President Donald Trump first announced tariffs on $50 billion in Chinese imports back in March to penalize the Chinese regime’s strategic intellectual property theft, including by pressuring foreign firms in China to transfer their proprietary technology to their Chinese joint-venture counterparts in exchange for market access.

In the 2018 EU Chamber of Commerce survey, 19 percent of respondents said they felt compelled to transfer their technology.

Trump has threatened to slap 10 percent tariffs on an additional $200 billion of Chinese imports should Beijing retaliate against his $50 billion tariffs.

“Let’s make no mistake that the root cause of the problem started here in China,” Harborn said, referring to Chinese industrial policies that foreign businesses have long decried as discriminatory. Harborn added that the chamber did not support the use of tariffs to resolve such disputes.

Reciprocal market access remains a particular concern, according to the survey, with 100 percent of firms in the information technology and telecommunications sector reporting that Chinese companies enjoyed better access in Europe than European companies had in China.

Sixty-two percent of companies in all industries said they had less favorable market access in China than their Chinese competitors had in Europe.

Chinese leader Xi Jinping has repeatedly vowed to widen market access for foreign investors and cut foreign ownership caps in certain industries, but has made little concrete steps to do so. 

Western governments, which share Washington’s concern about Chinese trade abuses, have urged Chinese officials to match their anti-protectionist talk with action.

Foreign business groups say the changes have been too little, too late.

But the chamber’s survey also showed European firms increasingly viewed their Chinese competitors as challengers to their business.

Sixty-one percent of respondents said domestic Chinese firms were already equally or more innovative than European enterprises for various reasons, including increased R&D spending and targeted acquisitions of foreign high-tech firms.

By Michael Martina. Epoch Times staff member Annie Wu contributed to this report.