Joerg Wuttke, president of the European Chamber of Commerce in China, said that Beijing needed to take seriously the threat of trade tensions growing in response to its ballooning trade surplus, and should take steps to alleviate it.
"This increasing trade imbalance is politically unstable in Europe. You cannot expect Europe, in the face of a probably higher trade imbalance this year, not to act," Wuttke told a news conference to release the group's annual position paper.
"We are worried that Europe is turning protectionist."
Wuttke urged the European Union to remain committed to open markets and said China needed to take steps to ease its trade surplus, which jumped 71% in the first eight months to $161.76 billion. Among other things, China should rely more on domestic consumption, Wuttke said.
Separately, Donald Evans, a former US commerce secretary who is now chief executive of the Financial Services Forum, also stressed the importance of maintaining open markets.
He said the group, which brings together 20 Wall Street chief executives, would continue to push for an environment in the United States that is open to foreign investment.
For its part, China should open up further in sectors such as financial services, for example by letting foreigners buy bigger stakes in domestic banks, brokers and insurers, Evans said.
"Probably the No. 1 concern we have with respect to the global economy and the American economy is protectionism, and we need to do all that we can to make sure that the global market continues to open," he told reporters in Beijing.
DODGY DVDs
In contrast to the drumbeat of calls from the US Congress for a faster strengthening of the yuan, Wuttke did not highlight currency appreciation as a priority for European businesses.
Rather, he laid out a series of specific measures that the group say would help to improve the business environment for foreign investors.
While there were signs that China had improved its protection of intellectual property rights (IPR), in part by training judges and stepping up enforcement efforts, Wuttke said, the problem was growing faster than the system's ability to cope.
"For example, to obtain a business license as someone who's selling fake DVDs is sometimes faster than obtaining a business license as a European retailer who wants to sell indigenous, real DVDs," he said.
Part of the problem was that many government agencies, including for IPR and environmental protection, are understaffed and that there is often poor implementation at the local level.
Another complaint was that many foreign companies in joint ventures found themselves blocked from bidding for some government projects, he said: "This is unacceptable for us."
Wuttke singled out the telecoms, insurance and aviation industries as sectors that faced particularly onerous barriers.
In aviation, Chinese and foreign airlines face unequal fees for landing slots and they have only one provider to choose from in both aircraft servicing and buying fuel, he said.
"It could not get more monopolistic than that."
Wuttke saw hope in the newly passed anti-monopoly law for breaking up such monopolies to the benefit of foreign and smaller firms, but he said its effectiveness would depend on the implementation of provisions like one on national security reviews of foreign acquisitions and another on abuse of IPR.
"Let's see how the anti-monopoly law deals with the small print and how the small print applies to state-owned enterprises," he said. (Reuters)
