Europe urges Beijing to be ‘open and inclusive’ in its plans for industrial expansion

China must become integrated in the global supply chain, EU chamber of commerce president says

PUBLISHED : Monday, 21 August, 2017, 9:11pm
UPDATED : Monday, 21 August, 2017, 11:10pm

China must be “completely open” if it is to succeed in becoming a leading centre for manufacturing, the European Union Chamber of Commerce in China said on Monday.

Speaking at a road show in Beijing to promote the Global Manufacturing and Industrialisation Summit, chamber president Mats Harborn said: “It is very important that [the] Made in China 2025 initiative is completely open and inclusive to the whole world.”

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“It is a prerequisite of success for China to integrate in the global supply chain. Otherwise it will be difficult for China to move up the value chain,” he said.

He was referring to the Made in China 2025 initiative, a plan launched by Beijing in 2015 with the aim of making China a leading name in global manufacturing.

It must also be based on “open markets, balanced trade, transparency and reciprocity”, Harborn said.

The plan has already raised eyebrows and concerns in Washington and Brussels as it means China is intent on replacing imported products with home-grown alternatives, especially in sectors such as robotics and computer chips.

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Beijing on Monday expressed its “strong dissatisfaction” at a the decision by US President Donald Trump to launch an investigation into China’s alleged theft of US intellectual property.

China’s top decision-makers have, however, been keen to ease foreign business concerns about its industrial upgrading plan.

Premier Li Keqiang said at the World Economic Forum in Dalian in June that there was a “misunderstanding” of the plan, and that it was wrong to conclude that China’s intention was to avoid buying foreign products.

However, Beijing’s clear preference for domestic products over foreign alternatives in government procurement contracts, and the requirements of foreign businesses to transfer technologies to Chinese partners, continues to cause unease among European and US businesses.

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On Friday, China’s State Council, or cabinet, released new guidelines on outbound direct investment, telling investors to focus more on projects that serve the Made in China 2025 and “Belt and Road” initiatives, meanwhile promising greater scrutiny of overseas property deals.

China’s foreign buying spree has not gone unnoticed by the European Union or United States, with voices growing for a review of the Asian giant’s investment activity amid national security concerns. The discontent is reinforced by the limitations Beijing puts on foreign access to its markets, and local protectionist measures.

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Some EU members, including Germany, are planning to introduce screening procedures for Chinese investments until Beijing offers equal opportunities for foreign companies.

Speaking on the sidelines of the roadshow, Joerg Wuttke, head of the Business and Industry Advisory Committee Task Force to the Organisation for Economic Cooperation and Development, said: “We know how the DNA of this country works. They want to stop children from playing outside with real estate, want to focus on hi-tech.”