Tuesday, February 9, 2010

EU needs single voice on China

EU member states are undermining Europe’s power by pursuing their own interests - and China sees it this way too

The EU’s last-minute decision to scrap plans for an SME Centre in Beijing. The office would have helped European firms to do business in China.

The reasons for the collapse of the initiative are not yet entirely clear, but one thing struck me when talking to sources in Brussels and Beijing: EU member states are uneasy about the prospect of a European enterprise centre which would work with companies trying to crack the Chinese market.

Several member states have set up national business-liaison offices in Beijing’s Chao Yang district which aim to get the biggest slice of the pie possible for their own firms. Looking at the bigger picture, one would be forgiven for wondering whether EU governments are really willing to work as one when it comes to the serious business of making money in emerging markets.

China sees EU as a bloc of three or four big players

Ask a Chinese diplomat how they deal with Europe when a political crisis breaks and you’ll find Beijing calls the embassies of France, Germany and the UK when they want something done. The EU, as an entity, is seen as a sluggish, many-headed beast. The real power is still in London, Berlin and Paris. (We could perhaps add Warsaw and Prague to that list.)

China understandably deals with those it identifies as the real power brokers on issues that matter. And the big European powers are happy enough with this. (It’s a wonder that some in the east would quite like to see an 'Asian EU'.)

Maybe the Lisbon Treaty will change this situation, given that there will be a new European External Action Service (EEAS) but we’ll have to wait and see.

Name recognition

I spent some time in China (here’s the proof) and was (naively) surprised to find that plenty of people had never heard of Ireland (’ai er lan’? Anybody?). But then again I hadn’t heard of Dongguan and its population is bigger than that of my home country.

For smaller European nations, the recognition that goes with the EU brand could be a major help to doing business in China. But that takes committment from all member states - including the big ones.


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