Brussels, 08/01/2014 (Agence Europe) - European Commissioner for the Internal Market and Services Michel Barnier, from France, also expects a better offer from Bejing at the WTO for access to China's public procurement.
On Tuesday 7 January while visiting the Chinese government - including a meeting with China's Minister for Finance Lou Jiwei - Barnier highlighted the Chinese banking sector's lack of opening to foreign competition. “Chinese banks are some of the biggest and most powerful banks in the world. They should not and do not fear competition”, he said. Barnier believed that there was “room for progress”, underlining that foreign firms represent only “1-2%” of the banking and insurance market in China, where “the needs are great”. He highlighted the continuing obstacles to foreign investment in this sector, including the difficulties in obtaining licences, the restrictions, and the complexity of the legal and administrative framework.
Barnier nevertheless welcomed the opening up that has begun of the Chinese automobile insurance market to foreign firms, and the enormous programme of reforms announced by the Chinese Communist party in November with “an emphasis on the rule of law”. While the Chinese finance sector remains closely managed by the state and dominated by large public bank monopolies, Beijing has decided progressively to authorise banking establishments with entirely private capital - with a pilot programme that will allow three to five private foreign banks to operate in the country in 2014.
Barnier also spoke to the Chinese authorities about the financial reforms undertaken by the eurozone - including the mechanism for banking union adopted at the end of 2013. “We have been appreciative of the trust that China has maintained in the eurozone despite its concerns. This trust is now justified by our programme of reforms that is beginning to bear fruit”, he assured.
Another issue that Barnier addressed with the Chinese authorities is the negotiation on China's accession to the WTO government procurement agreement (GPA), which guarantees the stakeholder countries reciprocal access to their public procurement (for a recent insight into the GPA, see EUROPE 10977). Barnier did not hide that he expects a better offer from Beijing, which would bring legal guarantees to European firms answering public calls for tenders in China - calls for tenders from European firms are currently “systematically sidelined”. “I think that [the Chinese authorities] are responsive, but their latest offer is not good enough”, Barnier commented before his trip.
In November 2013, the EU and China agreed to negotiate an investment agreement to boost their investment flows and trade (see EUROPE 10968). (EH/transl.fl)