On June 10, the European Union (EU) Chamber of Commerce in China, in cooperation with Roland Berger, released its European Business in China Business Confidence Survey 2020. According to the report, EU member companies operating in China believe that they have seen continuous progress on drafting and enforcing of IPR-related regulations in China and marked improvement has been made in IP protection laws and enforcement over the past decade.
The report reveals that IP protection has long been among major concerns for European companies operating in China or looking to enter the market. When it comes to the impact of IPR on R&D, two-thirds of respondents rate the effectiveness of China's IP protection laws and regulations as either "excellent" or "adequate". Statistics showed that China has seen marked improvement in both IP legislation and enforcement, which is the highest rate of positive sentiment since 2012.
The report noted that a key benefit of the Chinese market is its world-class research and development (R&D) and innovation environment, with a steady improvement. Forty percent of members now believe the Chinese market to be more innovative than the worldwide average, particularly in financial services, professional services, medical devices, aerospace and aviation, and environment sectors. This positive sentiment is fueled by the availability of government incentives for foreign-invested enterprises to engage in R&D. Sixty-nine percent of members believe that Chinese firms are already equally innovative as, or more innovative than, European firms. This is the highest percentage since 2017 and has shown steady improvement over the years, supported by the fact that in April 2020, China surpassed the US to lead in the number of international patent applications filed.
The report also said that although the full extent of the negative impact from COVID-19 on revenue growth remains unclear, European companies have long been drawn to the Chinese market, chiefly due to its sheer size and growth potential, as well as its world-class industrial clusters from which links in global supply chains can be sourced. China still remains one of the top three investment destinations for 63% of respondents. European companies in general remain strongly committed to China.
The 2020 survey inquired 1,308 eligible entities, with 626 respondents completing the survey, and achieved a response rate of 47.9%. Published annually since 2004, the survey has enabled the European Chamber to build a rich data set that serves as a broad indicator of how European companies judge the business environment in China.
