Photo top left: From left to right first row: Philippe Latour, Executive Advisor to Group CFO, AGEAS; Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce; Mr Kurt Vandeputte, Chairman, Flanders-China Chamber of Commerce and Vice President Battery Recycling Solutions, Umicore; HE Ambassador Cao Zhongming; Philip Eyskens, Chief Legal & Compliance Officer, Bekaert;
Second row: Johan Verstraete, Vice President, Picanol; Dirk Poppe, Area Director APAC, DEME; Carl Peeters, Chief Financial Officer, Ahlers.
The Flanders-China Chamber of Commerce, with the support of Flanders Investment & Trade, organized an exclusive dinner with H.E. Mr Cao Zhongming, Ambassador of the People's Republic of China in Belgium on 5 October 2023 in Brussels. Ambassador Cao Zhongming delivered a speech on China's economic perspectives and its foreign investment environment.
Mr Kurt Vandeputte, Chairman, Flanders-China Chamber of Commerce, gave the introductory speech at the dinner.
He welcomed the participants and congratulated the new commercial counsellor at the Chinese Embassy in Belgium, Mrs Xie Yajing, wishing her a lot of success. He said it was an honor to have His Excellency Mr Cao Zhongming, Ambassador of the People’s Republic of China in Belgium at the event. He thanked the Ambassador and his colleagues, and also Flanders Investment and Trade, a structural partner of the Chamber, the Government of Flanders and the Federal Government of Belgium for their support.
The Chamber has around 170 member companies, which is a big amount for a region like Flanders. In a members' survey, 80% of the responses were either good or excellent. Doing business has become more complex. According to a survey of European companies in China, the top three challenges for EU companies based in China are, first, the slowing down of the Chinese economy; secondly, the global economic slowdown, and thirdly, the geopolitical situation. The survey also stated that 60% of EU companies mentioned that China remains a top three destination for investment.
For many of the Chamber's member companies, China remains an important market which cannot be ignored. China’s market continues to offer long-term business opportunities for Flemish companies. There is still an enormous untapped potential for growth in the Chinese market also taking into account China’s growing middle-class. Many companies are in China for China and are more and more engaging deeper in the Chinese market. To fend off potential risks to operational continuity, an increasing number of firms are creating two separate systems, with one for China and one for the rest of the world – including for supply chains, data and information technology (IT) systems and staffing, Mr Vandeputte said.
Many of companies are also in China for its innovation power. The World Intellectual Property Organization (WIPO) just released the Global Innovation Index 2023 (GII), which showed that three Chinese Science & Technology Clusters – Shenzhen-Hong Kong-Guangzhou, Beijing, as well as Shanghai-Suzhou – were among the world's top five. The speed of China’s innovation power is also seen with the growing number of Chinese cars in Belgium. China is no longer only the production facility of the world. Competition is not new, it is everywhere, but it is important it is played by the same rules by everyone, Mr Vandeputte added.
Doing business with China can be challenging but the biggest risk for companies doing business with China is not to be in China! In these difficult times, and the Chamber plays an even more important role to act as a bridge and help Belgian companies grow in China and assist Chinese companies to find partnerships and develop their business in Flanders, Mr Vandeputte concluded.
His Excellency Ambassador Cao Zhongming presented his perspectives of the Chinese economy and its foreign investment environment. He apologized for being 30 minutes late as he spent one hour on the trip what we had not expected.
“It is my great pleasure to attend this event organized by the Flanders-China Chamber of Commerce. The last time we met was during the Spring Festival and this time we are meeting at the Mid-Autumn Festival, both very important festivals for the Chinese people. This event held by the FCCC has given me the opportunity to communicate face-to-face and share with you China's economic performance and policy on utilizing foreign investment. I want to thank Mr Chairman and Ms Sonck for the arrangements tonight and I want to particularly thank Mr Chairman for his efforts to promote the cooperation between the FCCC and the Chinese side and between Flanders and Chinese companies over the years.
Opening up is China's fundamental national policy. China is firmly committed to all-round opening up. President Xi Jinping has stressed on different occasions that China will not change its policy of utilizing foreign investment and protecting the legitimate rights and interests of foreign-invested companies in China. Nor will China change its policy of providing better services to foreign companies investing in China. Mr Chairman has mentioned the common challenges we face, including geopolitical changes, the need for transparency, rules-based competition and protection of intellectual property rights. In recent years the Chinese government has stepped up opening up and launched a series of policy measures to open up still wider and actually utilize foreign investment. In August, the Chinese government issued the guidelines on further optimizing the foreign investment environment and attracting foreign investment. Let me share with you the main points and five major aspects of the guidelines.
It has been mentioned by Mr Chairman that our new Councillor is Madame Xie from the Ministry of Commerce and she knows very well China's investment policies. If you have questions, we can discuss later.
The five major aspects of the guidelines:
1. Improve the quality of foreign investment. According to the document, foreign-invested companies are encouraged to establish research and development centers, investment companies and regional headquarters in China. They are also encouraged to invest in biopharmaceuticals, vocational education and training centers. The services sector will be opened up wider. Let me say a few more words, given the features of the Belgian economy. According to guidelines about R&D centers, support will be given to joint R&D and application programs by foreign-invested R&D centers and Chinese companies, and foreign-invested companies and their R&D centers in China will be encouraged to undertake China's major science and technology research projects. In the biopharmaceutical sector, in which Belgium has experience, foreign-invested companies will be encouraged to conduct clinical trials, and use drugs which have already been marketed overseas. Drug registration application procedures are to be streamlined for those already approved overseas and its production shifted to China. The pharmaceutical sector is an area we can further explore for cooperation between Chinese and Belgian companies.
2. Ensure national treatment for foreign-invested companies. Efforts will be made to ensure that foreign-invested companies are entitled to participate in government procurement activities. Specific standards for products produced within China will be further clarified. Foreign-invested companies are supported to develop world-leading innovative products in China. Special inspections against differential and discriminative treatment of foreign-invested companies will be carried out. Foreign companies can equally participate in industrial standards setting. The entire process of standards formulation and revision will be more transparent. Foreign-invested companies are encouraged to develop corporate standards on their own or with other companies. Standardized services will be provided. Foreign-invested companies are equally eligible for supporting policies adopted in China.
3. Continue to strengthen protection of the rights and interests of foreign companies. The guidelines have laid out specific and clear measures to strengthen administrative protection of intellectual property rights, enhancing administrative law enforcement of intellectual property rights, and standardizing the formulation of foreign-related economic and trade policies and regulations.
4. Further facilitate investment and business operation. According to the guidelines, senior managers, technical personnel and their families will enjoy facilitation in their border entry and exit, stay and application for permanent residence in China. Green channels for eligible foreign-invested companies will be put in place. Foreign companies with low credits risks will be subject to fewer and less frequent law enforcement inspections.
5. Provide greater financial support and tax incentives for foreign-invested companies. The guidelines noted that the comprehensive fiscal and taxation support policies, like financial support, tax incentives and rewards for eligible foreign-invested companies, will be further improved.
The guidelines put forward a number of ground-breaking opening-up measures in response to the major concerns of foreign-invested companies on investments and operations in China, including some of the concerns raised by Mr Wuttke. It is a policy document of China's commitments to high-level opening up and welcoming foreign investment. I believe that all of you can see China's firm determination of opening wider to the world. I also hope that you will fully share the benefits of the implementation of these measures.
As the world's second-largest economy, China's economic development has always attracted wide attention. There has been a lot of discussion about China's economy, some of which is pessimistic. Some believe that China's economy has stepped in a downward range and China is now less attractive for foreign investors. I want to tell you that China's economy enjoys strong resilience, tremendous potential, and great vitality, and is fundamentally sustaining its long-term growth option, and share this optimism about the Chinese economy. Faced with challenges of losing steam of the global economic recovery and overlapping of domestic cyclical structural contradictions, China has introduced a string of macro-policies across the board, including in foreign trade. China's economic performance in August and September continued to recover. Major economic indicators have shown signs of improvement and positive factors have accumulated.
I want to share some of the latest figures collected on September 30. In September the PMI indicator reached 50.2, above the 50 point threshold, and increased by 0.5 points compared with August. In September the business activity index for the manufacturing sector increased to 51.7. It may be only a little over 50, but we can tell that the momentum is faster. It means that China's economic recovery is very promising. On investment, I also want to share with you a couple of numbers. In the first eight months of this year, the number of new established foreign-invested companies in China increased by 33%. Particularly, the paid-in foreign capita utilized in the high-tech manufacturing sector increased by 19.7%, in the high-tech service sector, paid-in foreign capital in R&D and design service increased by 67.1%, meaning that the quality of foreign investment has further improved. In the first eight months of this year, FDI from the United Kingdom, Canada, France, Switzerland, the Netherlands and Germany in China increased by 132.6%, 111.2%, 105.6%, 59.2%, 25.3% and 20.8% respectively. Of course, we cannot discuss the numbers without mentioning Belgium. In the first seven months of this year, FDI flows from Belgium to China increased by 48.2% year-on-year. I hope that Belgian entrepreneurs will not be misled by some pessimistic media reports but stay confident in China's economic development. The figures of several months cannot represent the overall trend of China's economy, so I want to tell you that the long-term fundamentals sustaining China's economic road stay on course.
The accelerated economic recovery is one of the most urgent challenges faced by our world. In the context of turmoil and transformation, the world calls for entrepreneurship based on opening, cooperation and innovation. I believe that entrepreneurship is key to global economic recovery and growth and every country's social and economic development is impossible without the important contributions of entrepreneurs. However, in recent years, intensified geopolitical changes and the deglobalization trend have squeezed the stage for entrepreneurship. The politicization of economic activities and the overstressed concept of national security have harmed entrepreneurs. We live in a global community of interdependence. Countries need to pursue mutual support and win-win cooperation, rather than high fences around small yards or zero-sum games.
China has always been working towards a global community with a shared future. On September 26, China released the white paper on “A Global Community of Shared Future: China's Proposals and Actions”, promoting a new type of economic globalization and putting forward China's proposals for better global governance and response to various challenges in the 21st century. China cannot develop by shutting its doors to the world, nor can the world develop by shutting out China. Belgian entrepreneurs have always put faith in China's economic development, I want to extend my warm welcome to all of you to visit China more often to seek more cooperation opportunities. The Chinese Embassy in Belgium will continue to provide necessary support and facilitation.”
A networking dinner concluded the event.
