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EU Chamber urges China to lift foreign investment curbs
by Staff Writers
Beijing (AFP) Sept 1, 2016


China new home price increase picks up in August
Beijing (AFP) Sept 1, 2016 - Increases in new home prices in China picked up in August from a month ago, a survey showed Thursday, raising worries of further rises in major cities.

The average price for new homes in 100 major cities gained 2.17 percent month-on-month in August to 12,270 yuan ($1,837) per square metre, the China Index Academy (CIA) said in a statement.

It accelerated from a rise of 1.63 percent in July.

Real estate is a key sector for China's economy, the world's second largest and a vital driver of global growth.

Beset by property market problems, a sluggish manufacturing sector and mounting debt, China's economy is growing at its slowest rate in a quarter of a century, and concerns about its health have roiled global markets.

Authorities have introduced several policies to try to revitalise the property sector, including reducing minimum downpayment requirements, cutting transaction taxes and providing incentives for migrant workers to buy homes.

The policy loosening led prices in some big cities to rise this year as pent-up demand was unleashed. But at the same time the country has a huge inventory of unsold new homes, mostly in third- and fourth-tier cities.

The government has vowed to take "specialised" measures to tackle diverging trends in different regions.

Cities in richer regions including the Yangtze River Delta and Pearl River Delta led the increase in August, while others stimulated buying by loosening mortgage policies or handing out subsidies, the CIA said.

"Both market supply and demand are expected to continue to go up" as the peak sales season comes in September and October, "hopefully leading to a sustained increasing trend in the average (new) home prices", it said.

Land prices in first- and second-tier cities have been hitting new highs, it said, adding: "More cities may impose tightening policies in future."

Some places including the commercial hub Shanghai have introduced or hinted at policies to tighten the market after property and land prices surged in their localities.

Year-on-year, new home prices in China rose 13.75 percent last month, up from an increase of 12.39 percent in July, the CIA said.

A European lobby group in China on Thursday slammed the country's "unequal investment landscape" and called for it to drop wide-scale prohibitions on foreign investment, warning future access to the EU could be at stake.

The comments from the EU Chamber of Commerce in China come as Chinese buyers spend billions to snap up stakes in European companies, sports clubs, airports, and infrastructure.

"For the Chinese, Europe is a sumptuous buffet, anything goes, very nice, and for us it's four dishes and a soup, you can't do more," the group's president Jorg Wuttke told reporters at a briefing in Beijing.

The remarks preceded a statement from the Chamber said: "While Europe welcomes foreign investment, this lack of reciprocity is unsustainable and could lead to protectionism and increased tension."

It added that it was in China's interest to loosen restrictions and show Beijing "supports globally accepted principles".

Chinese investment in Europe has surged over the past two years, growing 44 percent year-on-year in 2015 to 20 billion euros ($22.3 billion).

Beijing has urged its companies to go abroad in search of higher returns and advanced technologies to make Chinese firms more competitive in a range of high-value sectors, from aerospace to agribusiness and robotics.

And the first half of 2016 has seen numerous billion-dollar deals including a $43 billion bid for Swiss seed technology company Syngenta.

Among the top-drawer investments are the purchases of 219-year-old private German bank Hauck & Aufhauser, Italian tyre-maker Pirelli, and a portion of advanced robotics firm Kuka.

Pointing to these, the chamber said it is "almost impossible to imagine" European investors would be allowed to invest in similarly prominent Chinese companies, calling the situation "win-win results, but only in one direction".

China ranked 84th globally -- behind Saudi Arabia and Ukraine -- in the World Bank's ease of doing business index for 2016, and second to last in an OECD report on the restrictiveness toward foreign investment.

If Beijing does not lower market barriers, it cannot assume it will continue to be allowed unhindered access to the EU because this would be politically untenable, Wuttke said.

"The stark contrast between (the flow of Chinese investments into Europe) and the closed-up Chinese market will drive a lot of people to the conclusion that China takes advantage of us," he said.

"As we have seen with Brexit, globalisation also produces losers, and losers have a political voice."

Some parties in Europe could now win elections on "an anti-China ticket", he added, noting that thousands of steel workers marched in Brussels to demonstrate against the negative impact of China on their jobs.

China, which makes more than half the world's steel, is widely accused in Europe of dumping its production on world markets and violating trade agreements at the expense of local jobs.

Last month the EU approved anti-dumping duties on cold rolled steel from China, its second-largest trading partner.

Chinese steel exports to the EU rose 28 percent in the first quarter of this year, while prices dropped more than 30 percent.

bfc/dly/dan

SYNGENTA

PIRELLI & C. SPA


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