EU Firms Admit China Is on par With Them in Innovation, a Survey Says
Xu Wei
DATE:  Jun 26 2018
/ SOURCE:  Yicai
EU Firms Admit China Is on par With Them in Innovation, a Survey Says EU Firms Admit China Is on par With Them in Innovation, a Survey Says

(Yicai Global) June 26 -- Most European firms operating in China think that their local counterparts are on the same level or even better in innovation for the first time, according to a survey co-collected by the European Union's commerce chamber in China.

Some 61 percent of the respondents from 532 firms answered that Chinese companies are equally competitive in creating goods and services or even superior, which is double the number from a year ago, according to the survey done by the EUCCC and German consultancy firm Roland Berger. This marks the 12th year that the study has been executed. 

Last year, Chinese private enterprises invested over CNY1.37 trillion in research and development, up 13.1 percent compared with the year earlier. The Chinese government also spent an equivalent of 2.1 percent of the country's gross domestic product last year to ratchet up R&D inputs, which was just 0.7 percentage points less than that of the US and 0.8 lower than in Germany.

Some 61 percent of the survey respondents consider China as one of the top three destinations for investment in future but they also believed that the Chinese market will grow more challenging over the next five years. Some 46 percent of them predicted that regulatory obstacles will make business operations more difficult. Some 43 percent claimed that the 'Made in China 2025' high-tech initiative favors local companies and in this way will hamper foreign firms' sales. Other concerns were the generally increasing local competition and the rise of labor costs.

A record-high number of the firms, 46 percent of them, up by 8 percentage points, said that they will reduce operational costs this year due to weaker prospects for profits.

Chinese businesses will grow into world-class companies at a faster pace if they engage in fair, open and free market competition, the survey participants said, adding that the government's preferential treatment will only limit Chinese firms from fulfilling their true potential, and restrain their ambitions to become global leaders in innovation.

Editor: Emmi Laine

Follow Yicai Global on
Keywords:   EU,Innovation,European Union,EU Chamber of Commerce,Made In China 2025,EUCCC