Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
June 28, 2018 02:00 AM

'Burdensome' regulations frustrate European firms in China

Kent Miller
Correspondent
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Guangzhou, China — European firms say internet restrictions, regulatory barriers and market-access restrictions hampering prospects on the mainland.

    Nearly half — 48 percent — of respondents to an annual survey by the European Union Chamber of Commerce in China say that doing business in China has gotten tougher in the past year.

    "[It] is time for China to remove the training wheels in order to create a sustainable economy in the long term," said European Chamber President Mats Harborn. "We have seen some improvements this year in areas such as law enforcement, but we are still far from an environment that fosters fair competition."

    Forty-six percent of respondents say market access restrictions and regulatory barriers have thwarted business plans. The same percentage expect regulatory obstacles to worsen over the next five years.

    Last year, President Xi Jinping pledged reforms and greater market opening at the World Economic Forum in Davos, Switzerland. But change has come slowly in the eyes of the respondents to the survey run by the European Union Chamber of Commerce in China. Only 6 percent saw a significant increase in market opening from 2016. And 19 percent said they felt obligated to transfer technology know-how to China in order to maintain market access.

    China's much-ballyhooed Made in China 2025 program favors domestic companies — 43 percent of respondents said they believed it discriminated against foreign companies, while 29 percent say they know of subsidies offered only to Chinese companies, with the environment and renewable energy seen as foci of favoritism.

    Two-thirds of European companies see China's Belt and Road Initiative as largely irrelevant to their business, although aerospace and civil engineering and construction firms are optimistic about opportunities from the mammoth international infrastructure push.

    Just over half, 51 percent, think foreign firms are treated less favorably than domestic ones, which is down slightly from last year, but sectors vary dramatically. While only 32 percent of chemical/petroleum firms see favoritism for mainland companies, 67 of medical-device companies believe they are treated unfairly.

    Fully a quarter of European firms believe they will never see a level playing field for all companies.

    Since the survey was conducted in February and March, U.S.-China trade talks have fallen through and both countries have followed through on tariff threats.

    Improving innovation

    This year's survey shows for the first time that a majority of respondents — 61 percent — believe that Chinese firms are equally or more innovative than European counterparts. But while Chinese companies are meeting rising consumer demand by innovating in products and services, they still lag in more challenging forms of innovation, such as scientific research and engineering, respondents say.

    Respondents were sanguine about recent developments in protecting intellectual property rights (IPR), but feel much work needs to be done. This year, 34 percent said IPR protections were adequate or better, up from a miniscule 13 percent only five years ago. Still, 29 percent reported significant damage from IPR infringement.

    While Beijing has established 15 IP tribunals across the country since last year, European firms still complain about slow response times.

    The number of firms with Mainland R&D units remains flat at 44 percent. One reason cited by the report: "[Many] European companies [are] still being reluctant to bring their core technologies to China for fear of infringement."

    Three-fifths of the survey responders are bullish about growth prospects over the next two years, the highest rate since 2014. And 66 percent reported their companies mainland sales were up 5 percent or more in 2017, the biggest jump in that category since 2012.

    However, respondents are slightly less optimistic on profitability. An all-time high of 46 percent plan to cut costs this year.

    A major concern was internet access, with 64 percent of respondents saying restrictions have hurt their businesses.

    China's rapidly aging population drove especially strong sales of medical equipment and pharmaceuticals. The automotive and chemicals/petroleum sectors also saw double-digit gains. Information technology companies saw their revenues tumble more than 10 percent as companies struggled to comply with a new Cybersecurity Law, which requires IT products and services to be "secure and trustworthy."

    The survey reflects an accelerating shift of low-cost manufacturing to Southeast Asian countries as China focuses on high-end manufacturing.

    Small and medium-sized companies said they were especially hurt by the SME Promotion Law that favors domestic businesses. Big Chinese companies, with more than 1,000 employees, are more innovative than their SME counterparts, European firms reckon.

    On the environmental front, the percentage of respondents giving the government high marks for strong protection doubled to 45 percent. However, by a two-to-one margin, respondents believe the government is still much tougher on foreign than on domestic firms.

    While respondents noted enforcement of environmental regulations is up, some complained that heavy-handed interpretations hurt foreign companies, even those complying with the law. Some of these companies are now contemplating moving some of their operations outside the country.

    In terms of the overall business environment, respondents were most concerned about a potential Chinese economic slowdown, followed narrowly by ambiguous rules and regulations and a global economic slowdown.

    The online survey was conducted by Munich-based consultancy Roland Berger. Of 1,195 EU Chamber members invited to participate, 532, or 44.5 percent, did.

    The EU Chamber has been surveying its members annually since 2004.

    RECOMMENDED FOR YOU
    Auto suppliers plan for uncertainty amid UAW strike, shift to EVs
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    An 8,000-ton dream for Milacron, 20/20 Custom Molded Plastics
    2
    Connecticut AG probes recycling claims on HDPE toothpaste tubes
    3
    ACC campaign targets Biden administration's 'troubling' policies
    4
    PureCycle declares force majeure following production problems
    5
    M. Holland selling 3D business after Ravago deal
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified