DS | DEVELOPMENT Solutions - Trade & Economy

This study, commissioned by DG Trade in March 2006, brought together a team of senior experts to carry out in-depth studies across eleven of Europe's most competitive sectors. The sectors covered included machinery, chemicals, automotive, pharmaceuticals, ICT equipment, agriculture, financial services, distribution and retail, construction, telecommunication services, and sustainable services and technologies. A twelfth report explored China's intellectual property environment across all sectors.

In addition to a comprehensive desk and field study, more than 200 industry questionnaires as well as in-depth interviews with sector operators in China were conducted within the frame of the study. The findings highlight the evolving picture of European industry trade competitiveness vis-à-vis China. A conference was also held in Brussels on July 7th 2006 for European business executives and wider stakeholders to comment on the priority issues related to European competitiveness and trade policy towards China. The collated opinions of relevant stakeholders provided further input into the conclusions of the study.

Each of the sector studies follows a similar structure. The first section provides a review of sectoral developments in China, which sets the scene for sectoral analysis. Based on a comprehensive analysis of both European and Chinese sector operator strengths, a picture of market evolution and competitive characteristics is established and specific EU trade and investment potential in China for the next 5-10 years is identified. This is followed by identification and quantification of market access obstacles preventing EU exporters and investors from reaching their full potential in the Chinese market. A review is also made of the impact that Chinese business has on European operators in third countries, particularly those markets which Chinese companies are targeting for export and investment.

A series of forward looking development scenarios are outlined to provide insights into the likely evolution of competitiveness and the recommended interventions of European trade policy in view of competitive challenges. Each report concludes with a section on how European sector operators can maintain as well as develop their competitive position and how European trade policy can be geared to ensure a level playing field. This is made possible by reviewing the commitments made by China following its WTO accession and its compliance record. Where European operators are seen to be operating in a protected market, then the costs or impacts of market access obstacles were estimated using a partial equilibrium model and other methods.