European businesses urge EU to take ‘defensive’ measures against China’s state-owned enterprises
- EU Chamber of Commerce warns of ‘resurgent state-owned economy’ receiving more funding, government contracts and subsidies than ever before
- It calls for ‘fail-safes’ to protect EU such as introducing new policies and making better use of laws to give Beijing more incentive to speed up reform
In a report released on Tuesday, the European Union Chamber of Commerce said there was a pressing need for China to reform the sector and to implement a system of “competitive neutrality” where state, private and foreign firms were treated equally.
It also warned of the “resurgent state-owned economy”, with more funding, government contracts, and subsidies flowing towards SOEs than ever before, squeezing out Europeans, and flouting global economic governance standards.
“Rather than cutting SOEs down to a manageable size, determining the industries that would be most appropriate for them to be operated in and privatising the rest, the goal has been to make them ‘stronger, better and bigger’,” Joerg Wuttke, the chamber’s president, wrote in the report.
The chamber has for years used its annual report to lobby for competitive neutrality and SOE reform, making more than 800 recommendations, but this year called for a number of “fail-safes” – asking Brussels to introduce new policies and make better use of existing laws to give Beijing more incentive to speed up changes to the sector.
“In the event that China does not follow through with SOE reform and competitive neutrality, in the coming years, such measures will be necessary to protect the EU market,” the report read.