Slowdown in investment only a temporary situation, official says

BEIJING - The European Union Chamber of Commerce in China said on Thursday that the nation's goals of promoting innovation and the services sector offer fresh opportunities for European companies, while it also demanded greater market access.

The growth rate of direct investment from the European Union to China slowed in June and July. Davide Cucino, president of the European Chamber, said: "We aren't worried about this, and it's only temporary."

"China's development goals outlined in the 12th Five-Year Plan (2011-2015) were met with enthusiasm ... European companies have what is required to further contribute to China's development," he said.

He also said that ongoing negotiations on a bilateral EU-China investment treaty are expected to boost European companies' investment in China.

The EU is China's largest trading partner, but Europe's investment in China only accounts for about 3 percent to 4 percent of its global investment, so there's great potential for an increase, Cucino said.

To convey European companies' views in China, the chamber on Thursday released its European Business in China Position Paper 2011/12, which includes more than 600 recommendations to Chinese and European officials.

China has made great headway in government procurement, environmental protection and the renewable energy sector, the paper said.

"We believe the government is taking into account what the companies are thinking. In the end, there will always be a compromise, which is good for the country, including what is good for foreign enterprises," said Dirk Moens, secretary-general of the European chamber.

At the same time, the chamber called for greater access to sectors and urged improvements in regulatory efficiency and transparency in legislation.

Cucino said that the functions of different government departments often overlap in China.

Patent registrations

China has set a target of 2 million patent registrations by 2015, but "the innovation-by-numbers approach has led to a race for quantity rather than an improvement of the quality of inventions", Cucino said.

Separately, Chinese officials told EU business executives that the yuan will achieve "full convertibility" by 2015, Bloomberg News reported on Thursday, citing Cucino.

"We were told by those officials by 2015," Cucino said, adding that a step-by-step process was outlined at a meeting held in the past several weeks.

The robust Chinese market has helped Europe recover from the global downturn, said Zhang Li, a researcher with the Chinese Academy of International Trade and Economic Cooperation, which is affiliated with the Ministry of Commerce.

"There's a pretty good chance for foreign companies to further explore the Chinese market as China is encouraging innovation and industrial upgrading," Zhang said.

China has designated seven emerging strategic industries, including energy conservation and environmental protection, as key to the country's sustainable growth.

"China clearly said in the 12th Five-Year Plan it would nurture the strategic industries, which will provide a golden chance for high-tech companies like us that are focused on climate change and energy saving," said Thomas Koniordos, president of Danfoss China, a Denmark-based supplier of mechanical and electronic components.

Emerging markets, including China, are the most attractive for his company, as Europe and the US face continued uncertainty because of their debt crises, Koniordos said.

China Daily