27th Feb 2024

Failure to win contracts is fault of EU firms, says China

  • EU firms have had particular difficulty winning wind energy contracts (Photo: CE)

A spokesman for the Chinese ministry for foreign affairs told EUobserver on Sunday (13 September) that any failure by European firms to win contracts under China's stimulus plan was due to their lack of competitiveness.

Mr Qin Gang denied his government favoured Chinese companies when awarding lucrative contracts under the country's stimulus plan, contrary to opposite claims by a number of European business groups.

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"Foreign investors must come to China in a more aggressive and competitive form [if they are to win the contacts]," said Mr Qin. "Nobody wants to buy white elephants."

China's four trillion yuan (€400 billion) stimulus plan announced last November has received praise from many in the international community as an important measure to help boost the Asian economy, with positive knock-on effects for the rest of the world.

However Europe's main business lobby group, BusinessEurope, recently sent a letter to EU trade commissioner Catherine Ashton, complaining that new rules appeared to limit purchases by the Chinese government to companies that are at least 50 percent Chinese-owned.

"We are deeply concerned that these new provisions could have a domino effect on protectionism globally," wrote the group's chief executive Philippe de Buck.

The European Union Chamber of Commerce in China recently expressed a similar view, saying China fails to treat local and foreign companies equally in the public procurement process.

Wind energy is proving to be a particularly hard sector for foreign companies to crack, says the chamber, with developers required to make 70 percent of their parts in China.

But Mr Qin denied the Chinese government was using protectionist measures to give an unfair advantage to domestic turbine producers and related manufacturers.

"We also have Chinese companies making windmills," he said. "At the end of the day, it's [a question of] value for money."

Warning to France

Separately, Mr Qin warned France to pull back on proposals for a carbon tax on imports entering into the European Union, aimed at complementing a newly unveiled carbon tax on fossil fuels products in France.

"We need to impose a carbon tax at [Europe's] borders. I will lead that battle," French President Nicolas Sarkozy said last week while visiting a factory in the east of the country.

Mr Qin indicated that China strongly opposed such measures, saying: "we would regard that as another form of protectionism."

The US decision on Friday night to raise tariffs on imports of car and light truck tyres from China has also come under fire.

Under pressure from the powerful United Steelworkers union, US President Barack Obama slapped a 35 percent tariff on the tyre imports for the coming year, falling to 30 percent in the second year, and 25 percent in the third.

"We are against it firmly and it is not in the interest of the US," said Mr Qin. "It sends out a very bad signal and sets a very bad precedent."

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