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2015-03-18 | All chapters

As China’s economy slows, bold reforms must be forthcoming

The European Chamber appreciates Premier Li Keqiang’s recent assessment of China’s current economic situation—the ‘new normal’—with a GDP target formally set at around 7 per cent. This candid approach has helped to clarify the government’s vision for the Chinese economy, and should help European companies to plan their business operations in China more efficiently.

We hope that China’s economic slowdown strengthens the Chinese Government’s resolve to pursue the crucial structural reforms outlined in the Third Plenum’s Decision. There now needs to be tangible improvements to China’s investment environment – something that certain recent policy enactments have cast doubt over.

The European Chamber was encouraged by Premier Li Keqiang’s declaration during the NPC’s annual Government Work Report that restrictions on foreign investment would be cut by half. However welcome this statement was, though, it must be balanced against reality – the new Foreign Investment Catalogue (Catalogue), which will come into effect on 10th April, includes few positive changes from the November 2014 draft, on which the Chamber had commented extensively. Given the Chinese Government’s prioritisation of people-centred development it is particularly disappointing to note that sectors such as education and healthcare have still not been sufficiently liberalised, and were even tightened in the final version of the Catalogue.

Furthermore, the European Chamber hopes that policies intended to limit foreign participation in China’s economy due to national security concerns—such as China’s proposed Counter-terrorism Law—will be held in check so that they do not become detrimental to China’s efforts to transition towards a more innovation-based economy.

European Chamber President Jörg Wuttke stated, “The Chinese Government needs to move forward with reforming the Chinese economy and not stop halfway. A greater degree of market opening, in particular an efficient and timely nationwide rollout of the negative list approach, is what we would like to see.”

For more information, please contact Ms. Yolanda ZHANG, Press Officer (see contact details below).

For more information please contact

Xinhe Fan

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