Winning China’s Markets

We'd like to present our readers a policy brief provided by the China Advisory Council, written from the perspective of European small and medium-sized enterprisis considering operation in, or already operating in China. The brief includes considerations on the investment climate in China and the conditions for success for European SMEs in the foreign market.

Policy Recommendations

The China Advisory Council, part of the 3-year Understanding China programme, is composed of 17 China experts with academic and practical experience. It is a forum for relevant stakeholders to discuss current developments on EU-China economic relations.

The China Advisory Council develops and proposes policy recommendations to policymakers in the European Commission and in European member states and acts as a sounding board for European economic and SME related policy issues vis-à-vis China.

On Thursday, 27 May 2010, the China Advisory Council discussed EU-China investment links and proposed the following policy recommendations:

1. The first recommendation is to make all information centres and support units in China multi-hatted to represent EU member states as well as the EU as a whole. This includes expanding the notion of ‘European Houses’ into a brand name. Though some elements of these European Houses already exist to one degree or another, more direction and patronage is needed from the European Commission, in partnership with relevant stake holders such as the EUCCC, EUROCHAMBRES, etc.

This should not necessarily mean building physical structures. Instead, the focus should be on developing a flexible framework to achieve the ‘Europeanisation’ of already well-established national activities and services. Generating a European presence in the provinces and cities of China where this is lacking provides the opportunity to offer national and European information and support to SMEs from all EU member states.

To realise the full potential of the EU, the European Commission needs to create an exhaustive list of all existing national offices in the regions and identify key people and facilitators in China (as for example Mandarin speaking Europeans from underrepresented EU member states). These people need an efficient network to improve the exchange of information and facilitate collaboration. Ideally, this will include joint meetings between the EU delegation, member state representatives and the European Union Chamber of Commerce in China.

To encourage the ‘Europeanisation’ of national centres, the European Commission,together with the support of interested Chinese provinces, should offer incentives in the form of extra funds or detached specialists. This could also involve expanding the European Commission’s Erasmus for Entrepreneurs programme to China and use ‘European Houses’ as training centres specifically designed for European SMEs interested in investing in China.

2. Secondly, the China Advisory Council identifies potential growth and attractiveness of regions and sectors in China and recommends focusing European activities on coastal area tier 1 cities and inland regions that dispose of good infrastructure. Concerning boom sectors, the highest potential for European business is in luxury brands,high-tech industry, and the environmental sector.

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