On 5 September 2024, Fabian Blake, Vice Chair of the European Chamber’s South China Chapter, delivered a speech at the Guangzhou Foreign Enterprises Roundtable Meeting. The event, hosted by Guangzhou Vice Mayor Tan Ping, was also attended by Sun Zhiyang, Guangzhou Mayor and Deputy Party Secretary. The roundtable served as a crucial platform to discuss business development, investment priorities and the challenges faced by foreign-funded businesses in Guangzhou, with the goal of boosting confidence in their long-term growth and stability. The European Chamber was the only chamber invited to this event, where it advocated on some of the top issues impacting its members.
In his speech, Mr Blake addressed several critical issues and offered recommendations raised by European Chamber members. Key topics included the incomplete implementation of the Greater Bay Area (GBA) Preferential Individual Income Tax (IIT) Policy, challenges related to green energy initiatives and carbon footprint management, and operational difficulties faced by European small and medium-sized enterprises (SMEs), particularly in the realm of intellectual property protection. He also presented key findings from the Business Confidence Survey 2024, highlighting a decline in national business confidence among European firms due to the broader economic slowdown.
Mr Blake noted that cash flow issues are exacerbated by unclear contract terms and delays in client payments. SMEs often face limited bargaining power during negotiations, with nonnegotiable or unfavourable payment terms, particularly when dealing with state-owned enterprises or large private companies, and frequent instances of late or missed payments. While debt collection services are available, they come at a high cost. To alleviate the financial burden on SMEs, extending preferential VAT, corporate income tax (CIT), and personal income tax policies for small taxpayers would be beneficial.
On the matter of IPR, Mr Blake said that intellectual property protection remains a significant concern for SMEs, as they often lack the resources to effectively safeguard their innovations. While there have been improvements, copyright and patent protection still need strengthening, and counterfeiting remains a major issue. Additionally, policy guidance at the municipal and provincial levels, along with legal instruments like joint venture requirements, continue to compel technology transfers. It is recommended to enhance enforcement and consistency, particularly with notice-and-take-down procedures on e-commerce platforms, to better protect intellectual property.
Regarding the GBA Preferential IIT Policy, the Guangzhou Government reported that it is currently reviewing submitted tax returns. Subsidies for the years 2021 and 2022 are expected to be paid by the end of 2024, with the application process for 2023 subsidies set to begin shortly after that. Concerning green energy and carbon footprint management, especially for EU SMEs, the government shared the latest regulations and encouraged European Chamber members to participate in an upcoming policy interpretation seminar aimed at helping businesses navigate the evolving regulatory landscape. Additionally, updates were provided on efforts to streamline administrative processes and strengthen intellectual property protection, reaffirming the government’s stated commitment to support the sustainable growth of European enterprises in Guangzhou.
The European Chamber Small and Medium-sized Enterprise Forum comprises European SMEs operating in various industries in China who strive for improved operating conditions and exchange on practical business issues to foster their success in China. Advocacy actions for SMEs organised by the European Chamber and the EU SME Centre include regular working group meetings and policy meetings covering issues of specific relevance for European small and medium-sized businesses in China. Find out more on our Advocacy page.
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