In an earlier posting I reported on the EUCCC Press Conference. I found the following article by Gary Bowerman, dated 15 September 2007. It gives a good overview, taking over the comments from the EUCCC.
Published in : The News, News September 2007. Source: www.bizchinaupdate.com
European firms are facing a toughening business environment in China, according to Joerg Wuttke, President of the European Chamber of Commerce in China.
Launching the EU Chamber’s 2007 European Business in China Position Paper, Wuttke said: “The investment climate is becoming more complex and challenging for foreign businesses operating in China,” adding that “companies in some sectors face new or increased requirements in areas such as technology transfer.” In addition, the transfer of technology mandated by Beijing, “threatens the core of European business … if you let go your entire technology,” he said.
Wuttke also highlighted the finance and telecoms sectors, where domestic competitors still enjoy state-protected competitive advantages. “We are seeking a non-discriminatory investment climate,” he added. “We seek fair and impartial treatment.”
The 2007 EU Paper identifies technical barriers to trade and investment, such as: “homegrown standards, the lack of adoption of international standards and arduous approval procedures”.
Below are the published highlights of the 2007 EU Chamber Position Paper:
Recent Positive Developments

• Two-way trade between EU and China has grown by 21.6% in 2006, exceeding EUR 250 billion.
• Large scale economic reforms in most sectors.
• Continued European investment into China, over EUR 3.7 billion in 2006.
• Improved consultation in the drafting of certain legislation such as the Labour Contract Law, the Property Law and the ongoing work on the Patent Law and Energy Law.
• Promulgation of new legislation, including China’s first Anti-Monopoly Law.
• Opening up of the banking sector to foreign participation; reduction of capital requirements.
• Intensified efforts on energy saving and emission reduction, and the publication of the national action plan on Climate Change.
• The introduction of National Phase III emission standards (similar to Euro III) for new vehicles nationwide.

Challenges

• Emerging trend within some regulatory bodies towards unequal treatment of foreign companies through protectionist measures.
• Continued lack of effective deterrence against IPR infringements.
• Need for greater consistency, implementation and enforcement of laws and regulations, particularly at the local level.
• Continued limitations on investment in certain industries such as automotive, telecoms, petrochemicals, and energy.
• Technical barriers to trade and investment in the form of home-grown standards, the lack of adoption of international standards and arduous type approval procedures.
• Sufficient time should be granted between the promulgation and the effective date of laws and regulations.
• Forced technology transfer for participation in certain sectors.
• Lack of independent regulators in certain sectors, which results in the lack of effective, transparent and independent decision-making.
• Distortions in energy prices that discourage energy saving and greater dissemination of advanced environmentally friendly technologies.

The Benelux Chamber of Commerce (together with the Danish Chamber) invited two speakers to give their insight into the new law: Ms. Luka Lu, Lawyer and Managing Partner for Capital Associates and Mr. Paul van de Kerkhof, Managing Director Randstad China. Both gave good presentations and Bencham members received their presentations in electronic form.

Many foreigners are not yet aware of the changes this law will bring – they better get an update because it is going to change a lot how companies handle their Human Resources.
Several clauses of the law will need further clarification. The final version is more balanced than the earlier drafts. One provision that was changed is regarding the ceiling for liquidity damages in relation with the non-competition clause – very reassuring because the former draft left the door open to stealing employees along with their expertise and technical secrets without due legal ways to stop it.
Overall the law seems to be made more for blue collar workers than for top execs. The question is, will China really enforce the rules for those workers who are regularly badly treated, mostly by local Chinese companies.
The law will result in higher HR costs but will make it more easy to fire top level staff.
Outsourcing of staff as done in western countries still is much a grey area, the least to say.
I found the following overview interesting, source: FIDUCIA. Gives a flavor of what it is all about.
New labour law regulations

• Employers are required to sign written contracts. If within one month, no written contract is signed the employers have to pay double salary. If within one year, still no contract is signed, an indefinite contract is deemed to be signed.
• Each employee can be offered a maximum of two fixed-term contracts. The third contract will be considered
• as indefinite.
• Employees who have worked for the same employer
• for ten years are entitled to an indefinite contract unless they request a fixed-term contract.
• The length of the probation period is linked to the duration of the contract and only applies once.
• Salary during the probationary period cannot be lower than 80% of the salary after probation.
• Labour unions have the right to negotiate contracts and company policies with employers on behalf of employees.
• Changes concerning hours, safety, insurance and allotment of holidays must be submitted to the employee
• representatives for discussion (this regulation
• already applies for labour union members).
• Employers are limited in their demand for training cost repayment when staff leave before the end of their contract.
• Employers are forced to pay severance if they do not renew employees’ fixed-term contracts, unless they can state a valid reason.
• The non-compete obligation is limited to two years and only applicable for senior management and technical personnel and other staff who are subject
• to confidentiality obligations.

Be warned…

People find me and send their links. Got this one, a blog “with insights, comments and ramblings about the ethnic home furnishings industries, particularly Chinese antique & reproduction furniture. From the folks at antique-chinese-furniture.com”
link: http://www.acf-china.com/blog/
The company behind it: ACF China Co. (stands for Antique Chinese Furniture).
The design of the blog looks cool and gives me some ideas… It also uses WordPress. The articles are not detailed in content but there are many interesting links for people seriously interested in Chinese antiques, restoration, curios, repairing it all, etc.
So, if one is interested, just keep in touch with their blog and submit your comments.
Another interesting operation in Beijing is Van Thiel & Co. Call them, the big repair center for that kind of stuff, in Beijing. Bencham organized a visit to their facilities, I missed it unfortunately. Maybe I should go there to repair some of my damaged antiques.
I found it interesting to hear from Rudy van Thiel Jr. they had no problems to find good craftsmen to do the delicate repair work.
The company is based in the United States with an office in the Netherlands. Consolidation warehouses are in Hungary, England and France.
The antiques are said to be authentic and range in age from the late 1700’s through the mid 1900’s.
They are sourced from France, England, the Mediterranean, Eastern Europe, Scandinavia, Indonesia, India and China. The operation in Beijing (roughly 5,000 sqm) is responsible for inspection, cleaning, restoration and consolidation of antiques from Asia & Europe.
For more information, visit their website: http://www.vanthielantiques.com/

I attended the opening of the Holland Week in Chaoyang Park on Friday evening 28 September. Was great, very relaxed and I could indulge in Dutch cheese, jenever and especially the “Hollandse Maatjes” – they were de-li-ci-ous…

I just felt pity one could not buy the jenever, cheese or maatjes (to take home).
At the gate of Chaoyang Park they were still completing the field with 580 Chinese flags, to celebrate the coming 58th National Day (1 October).
For the full series of pictures, click the following link:
http://homepage.mac.com/bjprc/PhotoAlbum9.html

I made two presentations to EMBA delegations from the University of Irvine, California (Paul Merage School of Business), on 27 August (Crowne Plaza) and on 14 September (Grand Hotel Beijing). The topics range from doing business in China, working with the government, the attitude of the Chinese and of course the Olympics.

Challenging as usual to address the audience – they not exactly “kids”… So, real very nice to receive this message from their Faculty Chair:
“Again, I would like to express my sincere appreciation to your wonderful presentation on Beijing Olympics and Doing Business in China. Students have given me very positive feedback about your talk. I hope we will have the honor of having you speak to our students in the future.”
I wish all people would be so nice…