China’s Push to Localise Foreign R&D Elicits Diverse Responses from European Companies Go back »

2023-04-21 | All chapters

Beijing, 21^st April 2023 – The European Union Chamber of Commerce in China (European Chamber), in partnership with the Mercator Institute for China Studies (MERICS), today published China’s Innovation Ecosystem: the localisation dilemma. Based on a member survey and in-depth interviews, the report highlights that the complexity of China’s business environment is necessitating a wide range of research and development (R&D) strategies to be deployed by European companies.

There are several positive market factors steering a large share of European companies towards deeper localisation, including the size of China’s market (61%), strong demand (47%) and the fast pace of commercialisation of R&D results (39%). At the same time, long-standing issues such as China’s weak intellectual property rights (IPR) protection system (34%) and an unlevel playing field for foreign companies (32%) deter others from bringing their technology into China, with many just engaging in development of existing products, while working on their core technologies outside of China.

While business confidence was significantly eroded by China’s stringent zero-COVID policy and the subsequent lockdowns and travel restrictions, many European companies expect this to be restored, though it will likely take years. However, the impact that geopolitics is having on the perceived stability of China’s business environment is only expected to worsen. Nearly half of respondents reported negative impacts on their R&D strategies resulting from Russia’s invasion of Ukraine, and many interviewees said the role that corporate risk assessments now play in strategy-making is unprecedented. A potential escalation of Russia’s war in Ukraine or further frictions in the Taiwan Strait are scenarios that businesses are taking into account, and the potential risks they pose significantly undermine the case for increasing R&D investments in China.

“European companies in China that are competing fiercely for market share often see R&D localisation as their ticket to staying ahead of the curve,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China. “However, a notable tempering of future R&D investment ambitions among MNCs shows that perceptions about China’s innovation ecosystem reflects broader business sentiment, which has been greatly eroded by the increasing unpredictability of doing business in China.”

“It is critical for European policymakers to understand the diverse strategies that Europe’s companies adopt to R&D and technology localisation in China,” said Mikko Huotari, executive director MERICS. “As the EU considers a ‘de-risking’ strategy towards China, it should recognise that there is no ‘one-size-fits-all’ solution. It will take considerable work with stakeholders to ensure that European firms can benefit from China’s innovation ecosystem, but to also take head on the geopolitical possibilities that we have all been reminded of since Russia’s invasion of Ukraine.”

This report is the second of a planned three roundsof surveys and interviews, which fall under a consortium projectsupported and funded by the German Ministry of Education and Research. It is a result of collaboration between the European Chamber and MERICS, with input from partners at Ruhr University Bochum, and the University of Duisburg-Essen.

Download the report here.

欧洲企业采取多样策略应对中国推动外资研发本地化

北京，2023年4月21日-中国欧盟商会联合墨卡托中国研究中心今日发布《中国创新生态系统：本地化困境》。基于对中国欧盟商会会员的问卷调查和深入访谈，本报告指出，中国商业环境复杂，欧盟在华企业须制定多样化的研发策略。

利于欧盟在华企业加强研发本地化的市场因素包括：市场规模（61%），强劲需求（47%）以及研发成果商业化周期短（39%）。同时，知识产权保护体系薄弱（34%）及不公平竞争环境（32%）等积年累月的问题导致部分企业对向中国出口技术望而却步。多数企业转而在其他国家发展核心技术，在中国仅发展现有产品。

虽然中国“动态清零”防疫政策导致的封控和出行限制严重影响了商业信心，多数欧盟企业仍表示有望恢复商业信心，尽管恢复周期仍需时日。此外，地缘政治对中国商业环境稳定性的影响日益增加。近半数受访者表示俄乌冲突对研发策略造成负面影响，多数受访者表示现阶段企业风险评估对于战略制定至关重要。商界密切关注俄乌冲突升级和台海局势恶化的可能性，其潜在风险导致企业暂停追加在华研发投资。

“在华竞争市场份额的欧盟企业通常认为，研发本地化是保持行业领先地位的首要条件，”中国欧盟商会主席伍德克表示，“如今，跨国公司对于研发投资热情明显降低。企业对中国创新生态系统的看法也反映其整体商业信心，在华运营的不确定性削弱了企业商业信心。”

“对欧盟决策者而言，了解欧盟在华企业为实现研发和科技本土化而采用的多种策略至关重要”墨卡托中国研究中心执行董事Mikko Huotari表示，“当欧盟决定对中国采取‘去风险化’战略时就应当意识到没有‘一劳永逸’的方案。欧盟须积极协调各利益相关方保证欧盟企业利用好中国创新生态系统，并及时预估地缘政治风险，后者也是俄罗斯入侵乌克兰带给我们的警示。”

本报告是同系列问卷调查和访谈内容的第二部分（预计共三部分），获得德国联邦教育及研究部的资助。本报告由中国欧盟商会联合墨卡托中国研究中心联合发布，并在撰写过程中得到了该项目合作伙伴德国波鸿鲁尔⼤学和杜伊斯堡-埃森⼤学的支持。

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