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2007-11-22 | All chapters

China Stalling on Business Reforms, EU firms Say
DPA, 22nd November 2007

China has failed to implement key business reforms that could remove long-term obstacles such as lack of transparency, protectionism and copyright piracy, an EU business group said on Thursday.

About 67 per cent of 211 EU firms surveyed by the European Union Chamber of Commerce in China said Chinese authorities were either ill equipped or unwilling to implement the full requirements of World Trade Organization regulations.

The biggest problems facing the EU businesses remained the lack of transparency in Chinese regulations and the lack of protection against violations of intellectual property rights, Joerg Wuttke, president of chamber, said at the launch of a survey report.

'China is in strong in need of specialised courts that know how to deal with IPR cases,' Wuttke said.

'We see exactly the same obstacles as in the last survey,' he said.

Wuttke said EU companies were still 'doing well in an increasingly competitive business environment.'

'Furthermore, European business has achieved this in a regulatory environment that has not improved.

'EU companies could serve their Chinese customers even better if there was more transparency and the Chinese government would implement its regulations,' he said.

Only 16 per cent of firms were positive about the impact of WTO regulations on business in China, compared with 37 per cent last year.

The 'staggering' change also appeared to reflect the greater competition brought by the implementation of the regulations, Wuttke said.

The launch of the survey report was timed to coincide with next week's EU-China summit, when top officials plan to discuss a broad range of trade and business issues, including China's currency exchange policy.

Wuttke supported the view of many US and European politicians and business leaders who have called for China to allow its renminbi currency to appreciate more rapidly.

Critics say the renminbi remains severely undervalued and makes Chinese exports cheaper.

The Chinese government has allowed the currency to appreciate gradually against the dollar over the last two years, but it has said it will not be pushed into faster currency reform.

Despite the ongoing problems for EU businesses, bilateral trade between China and the European Union rose by 21.6 per cent to more than 250 billion euros (345 billion dollars) in 2006.

In an earlier report, the EU chamber estimated that European businesses lost trade opportunities in China worth an estimated 21.4 billion euros (29.5 billion dollars) in 2004 due to non-tarrif barriers. 

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