It’s in China’s own interest to level the playing field for foreign companies
Michael Clauss calls on Beijing to play fair by the many foreign firms that have a stake in China’s market, not only by protecting intellectual property but also by including these companies in its reform plans
It is particularly encouraging that reform of China’s overprotected and overleveraged state-owned companies, for a long-time shoved towards the back of the reform agenda, seems to be slowly moving onto centre stage.
And yet, from the perspective of a country like Germany, whose companies have invested and taken risks in China since the first days of its reform and opening up policy – we now have 6,000 companies in China with investments well in excess of US$60 billion – there is one element missing, which will create mounting hurdles if not addressed swiftly: a level playing field for foreign companies, in words, best written into laws and unequivocal and predictable regulations, and in deeds, that is, rigorous implementation.
Our companies, unlike some sectors of China’s ‘home-grown’ companies, do not feel any lightening of the heavy hand of government
Looking back over the past 30 years, this has of course always been a mainstay of discussions by German and other leaders from major economies with China. And, while things were never perfect in the past, things were more or less moving in the right direction: towards a further opening of China.
At the political level, we are assured that China will continue its path of reform and opening. These are welcome and necessary signals. However, when we look at the daily reality of German companies in China, we have strong indications that further opening has not only slowed but seems on the brink of turning in the wrong direction. Our companies, unlike some sectors of China’s “home-grown” companies, do not feel any lightening of the heavy hand of government and the plethora of administrative bodies involved in licensing, security controls and “management” of any kind.
Chinese outbound investment is increasingly being freed of the shackles of government, but not inbound investment. Chinese companies are free to buy whatever company they desire; in Germany, this mostly means well-functioning hi-tech companies that China hopes will help it reach its goals of turning China into a 21st century’s manufacturing powerhouse.
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