| Global Times | May 30, 2012 00:25
By Tu Lei
The EU Chamber of Commerce in China said Tuesday that more than one-fifth of the EU companies in China are considering shifting investment to other markets due to market pressure and discriminatory policies, according to a survey.
The Business Confidence Survey 2012, jointly released Tuesday by the EU Chamber and Roland Berger Strategy Consultants, found that 22 percent of the 557 firms surveyed said they are considering leaving, mainly because of business uncertainty, ambiguous laws and regulations in China, rising labor costs, and attractive emerging markets that are offering more preferential treatment.
"Lack of reform of the regulatory environment is worrying and it has a disproportionate impact on foreign business," Davide Cucino, president of the EU Chamber of Commerce, said Tuesday.
"The figure of 22 percent is a little bit high, but it is normal to see companies coming in and out of China amid the flow of international capital," He Manqing, director of the Center for Transnational Cooperation under the Ministry of Commerce (MOFCOM), told the Global Times Tuesday.
Meanwhile, 52 percent of the respondents said the government places stricter environmental regulations on foreign companies than on State-owned enterprises and Chinese private companies.
According to the survey, 48 percent said they are missing out on business opportunities due to market access and regulatory barriers, with 64 percent of them valuing the missed opportunities at 10 to 50 percent of their annual revenues.
"The growth of EU companies has seen a declining trend amid China's macro economic slowdown," Li Xiaogang, director of the Foreign Investment Research Center at the Shanghai Academy of Social Sciences, said Tuesday.
However, Li said that the complaints about market access mainly relate to infrastructure such as railways and highways, which are difficult sectors for foreign companies to enter.
On May 15, figures from the MOFCOM showed that the foreign direct investment from European countries into China dropped to $2.7 billion in the first four months of this year, down 27.9 percent year-on-year.
Shen Danyang, a MOFCOM spokesman, attributed the decline to fierce competition among global marketplaces and rising costs in China.
Despite the concerns over market access, China is still an increasingly important market for European companies.
According to the survey, 42 percent of the respondents said their business performance in China was better than their global performance on average, and 63 percent plan to make new investments in China in the next two years.
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