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October 30, 2009

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Home » Business » Economy

EU firms remain committed to China

EUROPEAN companies are confident of China's economic outlook and won't withdraw or reduce their investment in the country because of the global financial crisis, said Joerg Wuttke, president of the European Union Chamber of Commerce in China yesterday in Shanghai.

"I am not seeing a single European company withdrawing from China because of the crisis," Wuttke said. "It does not make sense that companies withdraw from a market of 8-percent growth to other markets which may contract."

Some European firms are looking to raise their investment in China due to its improved economic outlook.

China's gross domestic product grew by 8.9 percent in the third quarter, thanks to vibrant domestic consumption and steady investment.

But China should do more to maintain its attractiveness as an investment destination for high technologies.

Wuttke said some European companies are reluctant to bring the latest technologies to China because of the lack of protection of intellectual property rights.

"China's intellectual property laws are not bad. The problem is their implementation," Wuttke said.

One result of the poor execution of IPR laws is that companies don't conduct "genuine" research and development in China, he said.

"Companies build R&D centers, but the focus is on development, not really on research," Wuttke said. "For the research part, companies are more willing to transfer Chinese scientists elsewhere to guarantee IPR protection."

China needs to deal with excess production capacity in the country, he said.

"Overcapacity in China will leave many oversupplied products to be exported, and this may lead to dumping charges," Wuttke said.


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