It is hard for European companies to do business in China due to loosely phrased laws

Almaty. June 13. Silkroadnews – European companies run into more difficulties doing business in China due to the loosely phrased laws and weak intellectual property protection, Kommersant informs with reference to The Wall Street Journal.

The recent survey of representatives of foreign companies showed more than 70% of respondents believe at present China treats them worse than 10 years ago.

“Indeed, there is a hustle in the domestic market: so many producers, high competition; second, the dynamics slowed down – China has some problems with foreign trade turnover, this affects the investment environment. As for intellectual property, this is the same old story: e.g. last year Apple has lost there about $3 million. In fact, their flow of investments has not reduced, it still stands at the average level of $120 million a year. Production will proceed there as the costs are low,” director of the Russian-Chinese Center of the Financial University for the Government of the Russian Federation Nikolay Kotlyarov believes.

According to the EU Chamber of Commerce in China, the automotive, chemical, IT and telecommunications industries are especially concerned.

“The competition is growing in those areas that are now strategic for China, for example, in agriculture and food production. Major Western companies, especially the British ones (with the French and German – to a lesser extent) have used to supply to the Chinese market the most different products or produce such products in the territory of China for a long time. Today, China is trying to control its food industry completely,” in his turn Alexey Maslov, director of the Centre for Chinese Strategic Studies under the Higher School of Economics under Government of Russia, said.

Secondly, according to the analyst, “earlier the Chinese producers simply supplied their factories for the production of western or Japanese electronics, and today they produce these electronic appliances themselves. The same situation is observed in production of textiles.”

Andrei Ostrovsky, Deputy Director of the Institute of the Far Eastern Studies under the Russian Academy of Sciences, says it is quite difficult for the Russian companies to increase their presence in the Chinese market.

“The Russian companies in the Chinese market are much weaker. Most of our companies are working in the area of procurement, the sales volumes have started to grow recently. (...) Mainly we deal with oil. Today, there is an option to develop the sale of agricultural production. To do this, it is first of all necessary to grow the volume of mutual investments, but so far it is very minor,” A. Ostrovsky said.