This episode covers segments on:
- Position Paper launch in Shanghai with Chamber representatives’ recommendations to companies and Chinese authorities; and
- New stimulus measures to support the financial, property and capital markets.
Also, listeners are invited to join an event in Shanghai on 14th October to hear compliance advice on the European Union’s Corporate Sustainability Due Diligence Directive.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
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Read more:
European Chamber report: European Business in China Position Paper 2024/2025
https://www.europeanchamber.com.cn/en/publications-position-paper
New stimulus measures to support the financial, property and capital markets
https://english.www.gov.cn/news/202409/25/content_WS66f3602ec6d0868f4e8eb3c0.html
European Chamber event: Unpacking CSDDD: Getting Off To a Good Start With Compliance
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
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RUI: On 23rd September, the European Business in China Position Paper 2024/2025 was launched in the European Chamber’s Shanghai Chapter. The Position Paper is the European Chamber’s most important publication, and the cornerstone of its annual advocacy plan. The report, which is available to download for free on the Chamber’s website, is a culmination of six months dedicated work by our 50 working groups, sub-working groups, desks and fora.
MARIANN: This year’s paper focuses on the urgent need for the Chinese authorities to follow through on reform pledges announced in the past year, with business confidence now at an all-time low. It details the challenges faced by European companies operating in China and provides more than 1,000 constructive recommendations to the Chinese Government on how they can be resolved. In short, it provides a blueprint for rebuilding business confidence in the Chinese market and restoring it as the preferred destination for global investment.
RUI: We asked the Chamber’s representatives who spoke at the Shanghai launch event to share their views on how European companies can best adapt to China’s changing business landscape, and what steps the government could take to boost investor confidence.
MARIANN: Carlo D’Andrea, vice president of the European Chamber and chair of its Shanghai Chapter, highlighted the need for European businesses to adapt to the increasing competition they face in the Chinese market.
CARLO D’ANDREA: European businesses should come to the realisation that they can no longer conduct business the way they did before Covid. Now, the China market requires you to invest more, put all your effort and passion into driving the business and be prepared to work times harder to stay on top of the competition here.
RUI: Erin Xu, vice chair of the Chamber’s Environment Working Group urged European companies to take part in standards setting to ensure consistency between Chinese and international standards.
ERIN XU: To cope with the fast-changing policy landscape, European companies in China should make greater use of the coalition forces to engage in policy work to avoid standards conflicts between their Chinese market and their global market.
MARIANN: Alexander Prautzsch, chair of the Chamber’s Finance and Taxation Working Group, called for the urgent implementation of already existing pledges to improve the business environment for foreign companies.
ALEXANDER PRAUTZSCH: If comparing the business confidence of European companies in the past with today, the key topic is trust in the Chinese development and the role of European companies in a China of level playing field. Rebuilding such trust, however, can only be achieved through a combination of multiple measures and it will take time. In that regard, the Opinions issued by the state Council on 13th August 2023 are a welcome multi-measure programme. So it will be key to proactively implement the spirit of these measures now and send out this message.
RUI: Sara Marchetta, chair of the Chamber’s Legal Working Group, pointed out that discontinuing the practice of differentiating between foreign and domestic investors in the legal system would help dispel some concerns about investing in China.
SARA MARCHETTA: The one recommendation for the Chinese government would be to finally drop the differentiation between foreign and domestic investors. When you have a differentiation in the legal system between different investors, this becomes very often in the implementation process a cause for discrimination, which makes foreign investors very uncomfortable.
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RUI: On 24th September, China’s central bank announced a series of support measures to boost the financial, property and capital markets.
MARIANN: To deploy more liquidity available for lending, the People’s Bank of China will lower the reserve requirement ratio for banks by 0.5 percentage points, and will consider a further cut within the year if necessary. Mortgage rates on existing home loans will also be lowered in the hope that easing the burden on households could help boost consumption and investment. Meanwhile, the central bank will develop new monetary policies to aid the stable development of the stock market.
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RUI: The European Union’s Corporate Sustainability Due Diligence Directive, or CSDDD, entered into force on 25th July, representing a significant development for EU sustainability regulation.
MARIANN: It mandates certain large companies operating in the EU to conduct risk-based human rights and environmental due diligence. Additionally, it will indirectly impact numerous SMEs that supply these larger companies as a result of the trickle-down effect.
RUI: Join us in Shanghai on 14th October to hear experts’ advice about the key steps your company should take in preparation for the phased implementation of the directive. This event is exclusively available to our members. Please visit our website to find out how your company can become our member.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in next week.
RUI: In the meantime, please find useful links in the episode notes.