World Economy

ECC Urges China to Speed Up Reforms

ECC Urges China to Speed Up ReformsECC Urges China to Speed Up Reforms

The European Chamber of Commerce (ECC) in China has warned that investment by its members in China may be affected if Beijing does not implement reform plans quickly. It accuses China of an "unfair business environment."

European businesses have warned China to implement market reforms or risk seeing growth and incomes drop dramatically, DW reported.

"The 'golden age' for business in China is drawing to a close," The EU's Chamber of Commerce said in its annual "China Position Paper" on Tuesday, adding that China does not have much time left to "create a framework to rebalance its economy." The EU Chamber has 1,800 members.

The report complained about the difficult business environment for foreign companies in China, and warned that some companies are "already reappraising their roles…and revising down investment plans."

China's Communist Party announced a blueprint for far-reaching reforms at the end of a key meeting in November. The blueprint includes plans to remove bureaucratic barriers, promote market liberalization, and improve the rule of law to give better protection for businesses.

Reforms in China's Interest

"A resolute implementation of the decision will ... help to rebalance the economy and improve the unfair business environment for private and foreign companies," said the Chamber's paper.

The Chamber granted that some modest improvements had been made, but warned that "fundamental operational and regulatory challenges" remain, especially for smaller businesses. It also cited widespread local protectionism as a problem.

The report pointed out that it is in China's own interest to speed up reforms, as the Chinese economy will otherwise lose steam quickly. It could fail to achieve the transition from a low-cost to a high-value economic model, and get stuck at a sub-optimal level.

The EU Chamber report has come out not long after Chinese authorities carried out a series of high-profile probes into alleged anti-competitive practices at a number of foreign companies doing business in China, including European automakers Daimler and Audi.