European Chamber urges Beijing to live up to its commercial potential

The European Chamber in China published its first ever standalone Beijing Position Paper 2015-2016 on Thursday.

Closely following the release of the first ever Shanghai Position Paper in January, the paper said that in contrast with the bustling commercial centre of Shanghai, Beijing has yet to be recognized as a major commercial hub worthy of its name and size.

Numerous issues at both a local and national level are holding Beijing back from fulfilling its potential to be such a hub.

"Beijing has become synonymous with big Government. This image needs to change," said Mats Harborn, European Chamber Vice President.

The Chinese government's plan for the city known as The Beijing Master Plan 2004-2020 aims high, expressing a clear desire for Beijing to attain global city status, full of international corporate headquarters and high-value-added industries. Yet in 2015 the city continues to be identified mainly with big and overly bureaucratic government.

In February 2014, the Chinese Government outlined the city's four core functions - government administration, culture, international exchange and technology, science and innovation. Business was unfortunately not mentioned.

The Beijing Position Paper views this as a setback and urges Beijing to develop a fifth core function - business. The Chamber's paper identifies several key areas in need of the government's attention if the city is to attain the status its administrators originally planned.

"Beijing still clearly lags behind China's established commercial centers, such as Shanghai and Guangzhou. A continent-sized country like China must have several centers of business, and Beijing should certainly be in the top tier of these," said the Vice President.

Among these are the strict implementation of visa and hukou regulations that make hiring local and foreign talent difficult, near crippling pollution that is driving expatriate families to abandon the city, unfavorable business policies as well as the issue of creating the Beijing-Tianjin-Hebei mega-region.

"More business-friendly regulations need to be forthcoming, ending financially irresponsible support for state-owned enterprises and creating more opportunities for small and medium-size enterprises would be one," said Mats Harborn.

"The National Government's drive to integrate Beijing with the city of Tianjin and Hebei province needs careful management and oversight or could worsen pollution and strain already scarce resources such as water and arable land. The good news is that many of the issues Beijing faces can be solved by turning problems into opportunities utilizing the help of all stakeholders including foreign businesses," he said.