EU Tour – Construction Working Level Meeting
2016-01-25 | Beijing
MB gave an overview of the Position Paper and the situation of the Chinese economy, in particular on the real estate and construction sectors.
MB in relation to the construction sector mentioned that there has been some opening in certain areas like investment in the construction sector. However, restrictions remain for services and product suppliers.
MB compared the Urbanisation Partnership of 2012 with the Innovation Cooperation Dialogue. In the first case concrete implementation has lacked, meanwhile in the second one there have been certain positive outcomes.
AF mentioned the apparently significant obstacles faced by European investment in China. MB referred to the obligation to get a local partner for certain activities when he considers that entering the Chinese market should be a free decision taken by each company.
VB mentioned that he recently has been in contact with the European Construction Contractors Association regarding the Chinese market. This association shares the same impressions as expressed in the European Chamber’s Position Paper. They insist on the huge size of the Chinese market and how it’s evolving from big infrastructure projects to consumer oriented buildings. He also referred to the fact that China needs infrastructures to treat water, energy related ones,… the market should also be more sophisticated. In the exports markets the biggest players are (SOES) in particular four and from the top ten global contractors two of them are Chinese SOEs. The competitiveness of European companies versus Chinese is very different in regional areas as Africa and Asia. The Chinese companies have finance tools which are developed by Chinese contractors with the decisive support of the government.
In relation to the access barriers to the Chinese market, VB mentioned that the above mentioned association considers it totally closed to foreign contractor unless the funding comes from a foreign/international organisation; otherwise EU contractors cannot play a role freely. The association sees China as a very important market for suppliers and subcontractors; but there is a clear lack of reciprocity. There is the chance to work together with Chinese companies in third countries, but these companies are not bringing their (potential) EU partners to China for projects.
MB mentioned the need to focus on more specific and realistic targets that related to the strengths of EU companies. This should be used by the European Commission as a check list of areas where opening should occur
AF agreed in the idea of determining more specific goals for opening and then he referred to the need of common standards. There is the need of a common language which should be neutral to investment flows.
MB mentioned the social and public opinion pressure in certain areas that could help to improve the quality of life of people. He also made reference to GAP and the fact that currently the opening up in this sector is limited to eastern areas of China instead of the western areas where opportunities arise.
AS also referred to common standards and OBOR. She mentioned that the Commission met with NDRC in relation to the connectivity platform. NDRC was very open to discuss common standards. According to her, NDRC has, now a real interest. This could be interesting for the construction sector and she mentioned the need to work together in setting concrete deliverables.
On OBOR, it has been discussed that China is very interested in cooperating in third countries. There are some doubts on this as SOE with backing from the State are involved.
AS mentioned that there was the interest of organising a match-making event related to the urbanisation partnership; however, it was too late to organise anything when they were informed. They are working with the Chinese side in order to have enough time to schedule such activities which could involve businesses. She asked for the European Chambers advice on how to mobilise the different stakeholders in order to engage and involve them in such initiatives.
Finally, VB mentioned that the European Chamber should get in contact the European Construction Contractors Association and have regular exchanged. He agreed to facilitate the contacts for this purpose.