EU firms still wary of China regulations

15th of September 2010

European firms remain optimistic about China's economic growth prospects, but are less confident about the near-term outlook for profits and are very concerned about regulatory unpredictability, according to a survey.

The annual survey of 500 EU companies in China showed that 78 per cent of respondents were optimistic overall about the growth outlook, up from 65 per cent last year in the middle of the global crisis. But only 34 per cent of the companies polled by the EU Chamber of Commerce in China expressed optimism about their profitability prospects over the next two years. One factor dampening sentiment is growing competition from local Chinese firms.

As in the past, the poll found widespread unhappiness among EU firms about regulatory interference and uncertainty and the vast majority of respondents did not expect regulations for foreign companies to become fairer in the near future.

Top concerns for business

"The discretionary enforcement of laws and regulations, opaque and burdensome registration processes as well as concerns regarding the protection of intellectual property rights continue to be top concerns for European business in China," Jacques de Boisseson, the president of the chamber, said in a statement.

"These persisting regulatory challenges temper the attractiveness of China as a long-term investment destination," he added.


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