This is a warning launched this Monday, September 25 by Valdis Dombrovskis, in front of students at the prestigious Tsinghua University in Beijing. “European businesses are worried about the direction China is taking,” said the European Trade Commissioner. According to him, “many of them are questioning their place in this country”, due to a “more politicized business environment”.
“This has resulted in less transparency, unequal access to public markets, discrimination in security standards and requirements, as well as requirements in terms of localization and data transfer,” he said. affirmed.
The anti-espionage law adopted in July
The European commissioner, on a four-day visit to mark the China-European Union (EU) Economic and Trade Dialogue, cited China’s recently approved national security laws. “The new law on foreign relations (Editor’s note: adopted at the end of last June by the Chinese Parliament) and the new version of the anti-espionage law greatly worry our business community,” he stressed, because “their ambiguity leaves too much room for interpretation.
Business circles have indeed been concerned since the entry into force last July of a new version of the anti-espionage law. The text significantly strengthens the authorities’ room for maneuver against what they consider to be threats to national security.
In the name of national security, China has also strengthened its data management legislation in recent months and restricted the transfer abroad of data considered sensitive. “For example, there is a lack of a definition of what so-called important data is,” said the European Commission’s digital manager, Vera Jourova, on September 19, while traveling in Beijing. She also criticized the “long procedures” faced by foreign companies.
An “increasingly ambiguous” business climate
The recent annual report of the EU Chamber of Commerce also drew worrying conclusions: European companies in China are faced with an “increasingly ambiguous” business climate and the “vagueness” of regulations exposes them to more “risks”. This context has led 11% of European companies surveyed to move their current investments out of China, according to the Chamber. “All European companies want to comply […] but it is very, very difficult to do so if we do not know what to comply with,” lamented the EU Chamber of Commerce.
Foreign entrepreneurs have long complained about regulatory constraints that are vague and subject to a number of interpretations. These remarks have therefore multiplied in recent months with the entry into force of new texts.
Last week, in Beijing, Vera Jourova pleaded for more “clarity” in local regulations. “No one criticizes Chinese laws, we just want them to be clear and easy to comply with,” Vera Jourova, vice-president of the European Commission responsible for values and values, told journalists. transparency.
A “lose-lose” dynamic?
This increase in contacts between Brussels and Beijing comes as the European Union seems to be raising its tone regarding Chinese commercial practices, denounced as “unfair” by President Ursula von der Leyen. The latter announced on September 13, in a speech in Strasbourg, the launch of an anti-subsidy investigation into Chinese electric vehicles. Beijing reacted by denouncing a “protectionist” measure which will have “a negative impact on economic relations” between China and the EU.
Commissioner Valdis Dombrovskis assured that China remained attractive for investments by European companies. “Both the EU and China have benefited enormously from their openness to the world,” “which is why I will continue to defend openness as a winning strategy in the long term,” he said on Monday.
But now European businesses are “wondering whether what many saw as a ‘win-win’ relationship in recent decades could become a ‘lose-lose’ dynamic in the years to come.”
American companies in China are showing record low optimism and are increasingly looking to move their investments out of this country, according to a report from the American Chamber of Commerce of Shanghai (AmCham) published on September 19. Slowing growth and geopolitical tensions between Beijing and Washington are hurting investor confidence, the document notes. Questioned on this subject, a spokesperson for Chinese diplomacy, Mao Ning, for her part praised the “enormous potential” of China’s economy whose “long-term fundamentals remain unchanged”.