European Chamber Report Joins Calls for 'Competitive Neutrality' and SOE Reform to Sustain China's Development Go back »

2019-09-24 | All chapters

European Chamber Report Joins Calls for 'Competitive Neutrality' and SOE Reform to Sustain China's Development

The European Union Chamber of Commerce in China today released its European Business in China – Position Paper 2019/2020 (Position Paper), which delivers over 800 detailed recommendations to the Chinese Government, spread across 33 industry sectors and horizontal issues. Each recommendation represents a piece of the overall reforms that are urgently needed to improve China’s business environment. The report focuses in particular on the need for SOE reforms, which are crucial to the country’s future development.

While China’s market continues to inch open to foreign investment and the business environment marginally improves year after year, these advances have not been enough to offset the resurgence of the state-owned economy and mitigate the subsequent effects, such as the drying up of private-sector financing and flagging national productivity.

Fortunately, some of China’s top leaders have recently been discussing the idea of ‘competitive neutrality’ – that all companies should be afforded equal treatment irrespective of ownership type. Making this concept reality and embarking on a programme of systemic SOE reform will be key to making the most of China’s entrepreneurial potential and accelerating its development.

The European business community has witnessed previous Chinese leaders pursue bold economic liberalisation over the last four decades and believes that its accumulated experience, as well as its far more sophisticated regulatory system, now put China in a strong position to move towards installing a free-market economy.

“Many steps have been taken to address the symptoms of China’s growing SOE problem, but meaningful results require that the causes be addressed,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China. “Realising competitive neutrality would level the playing field—which currently favours state-owned firms over both local and foreign private ones—and lay a strong foundation for resilient long-term development.”

Download the full report here.

Please click here to view the Chinese press release.

About the European Union Chamber of Commerce in China

The European Union Chamber of Commerce in China (European Chamber) was founded in 2000 by 51 member companies that shared a goal of establishing a common voice for the various business sectors of the European Union and European businesses operating in China. It is a members-driven, non-profit, fee-based organisation with a core structure of 31 working groups and fora representing European business in China. The European Chamber is recognised by the European Commission and the Chinese authorities as the official voice of European business in China.

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Yichi Zhang