European businesses voice fears China hi-tech overhaul will be unfair to foreign firms

Beijing’s plans to create national winners in 10 high-tech manufacturing sectors by 2025 have come under fire from European companies, which fear Chinese manufacturers will swamp whole industries with overcapacity and ignite a protectionist backlash.

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The EU Chamber of Commerce in China on Tuesday launched a 70-page report of China’s commercial plan, known as China Manufacturing 2025. “The wide set of plan tools that are being employed to accomplish CM2025’s development are highly challenging,” said the chamber, which symbolizes European businesses in China. The report was timed to match with the National People’s Congress; the yearly conference of China’s rubber-stamping legislature. The chamber said, for example, that foreign car makers with electric designs were being pushed to change over their battery power technology to Chinese partners in return for being able to produce and sell in China.

“European business is experiencing extreme pressure to change over advanced technology in return for near-term market access,” according to the critique.

In many cases, for example in a high-speed train, western multinationals such as Siemens have given technology under certification deals only to see Chinese partners convert circular and contest with them in international marketplaces. Many experts say international multinationals’ mindset to China has solidified in the past several years, as development bogged down and competition sharpened.

“Many companies that were more resistant of an unlevel playing field back when China was growing in the double numbers are now finding this level of tolerance running slimmer in this new lower-growth environment,” said Jude Blanchette of the Meeting Board in Beijing.