The EU has long complained about China's poor investment environment. Take for example the case of Shin Kong Place -- a joint venture of the Shin Kong Group and the Beijing Hualian Group where the latter attempted to take over ownership -- at a time when cross-strait relations were tense.
On Sept. 11, the EU Chamber of Commerce in China, which represents European business interests there, released its seventh annual European Business in China Position Paper. This was the chamber's first position paper after China's first "five-year transitional period" following its WTO entry.
In it the chamber complains that foreign firms' investment and trade are facing increasing challenges from Chinese authorities, including protectionist measures, intellectual property right (IPR) infringements and even forced technology transfers.
At a Beijing press conference, chamber president Joerg Wuttke bluntly said: "With the continued strong growth of China's economy, the business environment remains attractive for European companies. But the investment climate is becoming more complex and challenging for foreign businesses operating in China."
"Despite real improvement in the legal and regulatory regime, companies in some sectors face new or increased requirements in areas such as technology transfer," he said.
He went on to urge the Chinese government to improve transparency.
He also said that European companies lose 20 billion euros (US$27.7 billion) in China every year, mostly due to IPR infringement and investment barriers to the telecommunications, insurance and aviation industries. Moreover, the report said Beijing began to tighten regulations on foreign investment last year, restricting foreign investment in real estate and overseas buyouts of Chinese companies.
Foreign companies have also noticed restrictions on Chinese government agencies and major industrial units buying foreign products, as well as protective measures for both local industries and enterprises. The report concludes by expressing worries over the direction of China's investment environment.
The experience of European companies should serve as a warning for Taiwanese eager to invest in China. If Beijing does not improve the transparency of its regulations, Taiwanese can do nothing but pull out after suffering financial losses and unfair treatment. Just like European firms, all we ask is to be able to invest in a non-discriminatory environment.
Chang Meng-jen is a doctoral candidate in European comparative politics at the University of Siena, Italy.
Translated by Eddy Chang
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