European businesses in China are mostly optimistic about their
local operations but have also proposed many practical suggestions
to the government, according to the European Business in China
Position Paper 2004 issued on Friday.
The fifth edition of the paper written by the European Union
Chamber of Commerce in China details the results of a wide-ranging
business survey of more than 450 Chamber members.
The paper is divided into 20 commercial sector chapters,
spelling out concrete recommendations aimed at creating a better
understanding of varying regulatory issues.
The business confidence survey said 64 per cent of the
respondents companies expected to be profitable in 2004. Those with
operations in China for more than 10 years had the most optimistic
expectations.
And 27 per cent expect that they will be profitable in China
within three years and 20 per cent expect profitability within four
to five years.
In general, 90 per cent hold optimistic or cautiously optimistic
opinions on overall business in China.
As China has been a member of the WTO for nearly three years,
benefits of membership are now measurable.
The majority, 61 per cent, perceive China as willing to
implement its WTO commitments, the survey said.
The majority also agree that accession to the WTO has had a
positive impact on China's business climate.
Chinese authorities can take credit for a number of remarkable
achievements during the past year in terms of regulatory reform,
said Serge Janssens de Varebeke, president of the chamber.
The European businesses particularly welcomed the new Automotive
Policy, the Provisions on the Administration of Establishing
Foreign-Invested Export Procurement Centres, the revision of the
Provisions on the Establishment of Investment Companies by Foreign
Investors, and the Regulations on Management of Foreign Investment
in the Commercial Sector.
The most significant Chinese accomplishment noted by the
European Chamber in the past year was the revised Foreign Trade
Law, which came into force on July 1, replacing the 1994 law, no
longer suitable to cover the massive developments China has
undergone in the past decade.
"Furthermore, we were really encouraged by the increasing
openness of the government. Many comments from the Chamber's Legal
Working Group on the Foreign Trade Law found their way into the
promulgated law," Varebeke said.
For pre-market registration of cosmetics, suggestions by the
Cosmetics Working Group have been accepted and were written into
law.
"This is but an example of the government's increasing
willingness to consult with the business community before issuing
new legislation," he said.
But the businesses still have their concerns. Lack of
transparency, licences/quotas and registration processes top the
list, according to the paper.
In the case of the cosmetics industry, it currently takes five
to 12 months to register common imported cosmetics. Registration
for similar domestic products only takes about two months.
(China Daily October 16, 2004)