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The Wall Street Journal
The Wall Street Journal
World
Chao Deng

European Firms Fret Over Made-In-China Policy

(Credit: Virginia Mayo/Associated Press)

BEIJING—The Chinese government’s plan to promote domestic high-tech industries, a prime target of the latest U.S. trade measures, is also stirring unease among European companies.

The Made in China 2025 initiative has created business opportunities for some European firms, such as in increased machinery orders, but the benefits haven’t been widely shared, according to a survey by the European Union Chamber of Commerce in China.

More firms should be able to partake, said Mats Harborn, president of the chamber. “It should be open, transparent,” he said of the Made in China 2025 campaign. “It should make full use of global supply chains.”

China introduced the plan three years ago as a blueprint for enhancing the competitiveness of Chinese manufacturing by boosting high-tech sectors such as robotics, aerospace and electric vehicles.

In the chamber’s survey, 58% of the companies polled said they hadn’t been able to participate in Made in China initiatives.

While 62% said they didn’t know whether Made in China 2025 was leading to increased discrimination against foreign companies, of those with an opinion, 57% said “no” and 43% said “yes”—a response the chamber headlined as a cause for concern.

The survey of 532 respondents was conducted in February and March, when President Donald Trump’s administration was threatening China with tariffs, and its release comes after bilateral negotiations failed and both countries follow through on threats.

The U.S. is demanding that Beijing stop providing subsidies and other assistance for industries favored by Made in China 2025.

China maintains that its trade policies are fair. A Foreign Ministry spokesman said Tuesday that the U.S. accusations against China are designed to cover up its own unilateral and protectionist moves.

Regulatory concerns are a perennial issue for foreign companies doing business in China, and the EU chamber survey found that 46% of respondents expect China’s regulatory obstacles to worsen over the next five years. Some 48% found doing business in China is getting more difficult.

On a positive note for China, a solid majority of EU firms surveyed, 61%, said they believed Chinese firms were equally or more innovative than foreign firms, up from 47% last year. Chinese firms are catching up in particular on providing innovative products and services, the survey found.

That finding and the continuing growth of internet giants such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. should encourage China to become less protective, Mr. Harborn said.

Write to Chao Deng at Chao.Deng@wsj.com

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