Beijing’s new pledge to treat foreign companies as domestic competitors has been met with a lukewarm response from one of its largest trading partners, Germany, where industries are calling for concrete action rather than empty talk to create a truly level playing field.
Germany’s involvement in the world’s second-largest economy has been under scrutiny, partly because China remains its largest trading partner, but also because Germany requires companies to diversify away from so-called “partners, rivals and systemic rivals” “.
Beijing’s efforts to ensure international companies stay engaged come as inbound foreign direct investment fell 8% in 2023, due in part to broader counterespionage laws, exit bans and raids on consulting and due diligence firms.
However, German direct investment in China rose to a record 11.9 billion euros ($12.9 billion) last year, underlining the market’s continued importance despite efforts to reduce exposure.
In an effort to attract more foreign investment, China’s Vice Minister of Commerce Guo Tingting said at the China Development Forum in Beijing that China would “fully guarantee national treatment for foreign companies” but did not elaborate further.
“We are seeing more and more what I would call friendly signals,” said Oliver Wack, Asia expert at German engineering association VDMA, which represents heavyweights such as Siemens and Thyssenkrupp.
“But in terms of content, it’s not earth-shattering.”
Thousands of words?
Wacker said Beijing’s efforts included a meeting on December 12 with the head of economics at the Chinese Consulate General in Frankfurt, who asked what measures must be taken to encourage more VDMA members to invest in China.
As part of a series of events with foreign companies in the Chinese capital this week, the Commerce Ministry will host the Invest in China Summit 2024 on Tuesday, with Pfizer CEO Albert Bourla and AstraZeneca CEO Pascal Soriot will speak at the event. schedule.
AstraZeneca declined to comment and Pfizer confirmed Bourla was attending the China Development Forum and speaking on a panel at the China Investment Summit but declined to comment further.
wall street journal Chinese leader Xi Jinping is also reported to be planning to meet with U.S. business leaders this week after the forum, as Beijing steps up efforts to attract U.S. companies amid a massive outflow of foreign capital.
VDMA’s Wacker said that to make effective changes, China should join the World Trade Organization’s Government Procurement Agreement and the OECD (Organization for Economic Cooperation and Development). Both would be practical steps to create equality among companies.
Dirk Jandura, chairman of the German Federation of Wholesale, Foreign Trade and Services, also poured cold water on hopes that China’s latest measures would make a real difference to the status quo.
“We are familiar with this type of commitment. Unfortunately, in the past, it has often been lip service, or small steps towards change… How big a contribution foreign entrepreneurs can make here – it’s unclear .”
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