EU Tour – DG Lowry Evans, DG GROWTH
2016-01-26 | Beijing
MH introduction European Chamber and EU SME IPR HD and EU SME Centre. Economic situation China, reform process and economic diplomacy.
DG suggested that when meeting with VP Katainen and Commissioner Bienkowska the European Chamber should highlight concrete areas for a high-level dialogue with China (i.e. investment barriers). Otherwise there is the risk that the dialogues are not as targeted and they should be. The dialogues need to be very specific in relation to the agenda setting.
MH mentioned that business needs to be in the agenda of any dialogue and there should be a component of reciprocity (mutual benefits). The European Commission should be more assertive in this last element.
MH made reference to the need of the right standards for a real market economy. China’s industrial policy is not inclusive and China needs to understand that the supply chains work for the interconnection and insulation is not the answer.
DG was interested in knowing more on how the local content requirement works in China. SR gave the example of China 2025 and the local content requirements in the ten focus areas. For instance, the automotive JV is not considered as local product. Same thing goes for suppliers of autoparts. However there are some foreign companies considered local. However in many other industries, EU companies need the support at the highest level. SR also mentioned that with the China 2025 there is the objective of moving from quantity to quality, but protectionism is a clear barrier for this.
DG once again mentioned the need of more specific and granular information in order to take action. DG also was interested in know whether China’s position was WTO compatible. However the delegates mentioned that they are not WTO experts and would need the support of the Commission to better understand China’s WTO commitments. DG ask to raise the issue to Commissioner Malmstroem and DG could take the study.
Jean-Luc linked the discussion with economic diplomacy. He mentioned that the only way that the Commission can help MNCs and SMEs during the dialogues is by finding a specific context and pass a few (i.e. three) very clear messages.
MB considered that the important message that should be pass is that companies independently of their origin generate jobs, tax revenues,… and contributes to the development of China.
MH on industrial policy mentioned that China is not taking into consideration the big picture and is mixing issues. For instance, China wants to lead on green vehicles, but it does not have green energy. According to him the message should be that the future is complex and need to encourage all the pieces. Need to see the ultimate goal that it wants to achieve.
DG was interested in knowing more whether the COP21 has produced any changes in the perception of policy maker in china. Delegates mentioned that at central level a change can be seen, but at provincial and lower level and also from SOEs, that’s not the case.
MH – China needs a systemic solution; but their focus is only in attracting investment, not the best solutions. There is the need of education at the high-level. DG encouraged the Chamber to pass this message to VP Katainen.
Discussion on pilot project, urbanisation and PPP. DG mentioned that China needs to build PPP capacity before getting any investment. SR agreed that EU companies have advantages in these areas, particularly green technology, but currently there are plenty of initiatives (AIIB, global green fund, BRICS fund,…); but there are no clear answers.
Discussion MES and overcapacity – structural problem. There needs to be a high level dialogue and also tackle SOEs. Discussion on what is OBOR and what it means for EU. DG was interested in understanding why China is delaying the reforms affecting the overcapacity, to what the delegates mentioned local resistances, fiscal conflicts, layoffs, social stability BdlN put as example of overcapacity the refining sector. DG was interested in receiving a copy of the OC study.
Delegates suggested using G20 and MES discussion to put pressure on China. Now China is more interested in the EU than the other way. DG suggested raising also this issue with VP Katainen and being clear with the message.
RdM focused on the challenges faced by European SMEs and particularly the market access barriers and how standards are a major concern. DG ask the Chamber to provide more examples and be specific so they can use it during the dialogues with China.
On public procurement, delegates mentioned the reluctance of the industry to raise the voice due to the fear of retaliation. He pointed out the need of a mechanism to make China understand this situation is not sustainable. The idea of the proposed instrument is good.
DG mentioned that all players need to move in a global dimension and China needs to be part of it. The world need to monitor China’s progress and engage from that way.