Challenges remain as enterprises operating in EU report optimism

Seventy percent of surveyed Chinese enterprises with operations in the European Union reported optimism over the prospect of their investment in the market, according to the Academy of China Council for the Promotion of International Trade.

The survey, released by the academy on Tuesday, indicates that as high as 78.6 percent of respondents listed the EU as their top investment destination.

Even so, the report identified several challenges for Chinese companies to invest in the EU market, and urged relevant departments to address Chinese investors' concerns by improving the investment climate.

Zhao Ping, leader of the research group, said the EU's investment environment has directly caused difficulties for Chinese companies smoothly operating in the market, and the increasingly tightening review system for foreign investment restricted the scope of Chinese investment. She is the director of the academy's international trade research department. 

In 2017, the European Commission adopted a proposal for a regulation establishing a framework for screening foreign direct investment inflows into the EU on grounds of security or public order. The regulation entered into force on April 10 and applies across all EU member states on Oct 11, 2020.

"The proposed regulation lacks legal basis," Zhao said. It will cause conflicts between the EU law and the laws of its member states, which will undermine the credibility of the EU legal system and confuse foreign investors, Zhao said.

The regulation also fails to provide clear definitions of such key terms as "public security" "national interest" and "key technology," Zhao said.

According to the report, 85.3 percent of respondents believe the EU legislation over foreign investment screening will lead to unfair treatment to Chinese enterprises.

The report urged the EU to improve the investment environment, ensure predictable market access rules and enhance transparency of its foreign investment policies.

The report came as China and the EU are advancing negotiations on a bilateral investment treaty. The two sides aim to make significant progress this year and reach consensus on a high-level treaty in 2020, according to the Ministry of Commerce.