Turning understanding into euros

The Understanding China program's second EU-China Policy Summit being held in Brussels on Dec 2, 2010. rovided to China Daily

With the European Union's member states and private institutes pouring money into China-focused research, many ask whether the continent's increasing understanding of China will bring financial rewards.

But while Europe struggles to distil the ever-growing output of academic research, policy reports and roundtable debate into a united political approach to China, there has been more success on the business front.

Understanding China, a program launched in 2009, looks to enhance the business prospects of European companies in China. Focusing on small- to medium-sized enterprises (SMEs), the initiative takes a two-pronged approach encouraging policy-level debate while offering companies assistance in setting up or developing operations in China through trained representatives.

Anita Ryczan is the project coordinator of Understanding China, which is co-funded by the European Commission and managed by Eurochambres, the Association of European Chambers of Commerce and Industry.

"Our main aim is to improve the understanding of China among European businesses. The element we always hear European businesses say they struggle with is their knowledge of China."

It can be easy for European SMEs to get carried away by the headline figures. China is not only now the second-largest economy in the world, but also the EU's second-largest trading partner. With story after story praising China's economic growth, there is a danger of believing that setting up an operation on the mainland will be plain sailing.

"In general, businesses are very optimistic about the huge opportunities that China's market can give them," Ryczan says.

"But they very often don't prepare enough in advance, thinking it will go well because China's so big and there are so many chances over there. They are not aware of the difficulties they can face. This is what we are trying to show people."

These difficulties can take any number of forms, from staffing to intellectual property disputes. Freya Lemcke, an international affairs adviser at Eurochambres, has overseen the creation of an SME center in Beijing which will offer European businesses advice on legal, standards, HR and business development issues. A key concept behind the center is to provide assistance to businesses from EU countries without developed ties to China.

"Not all European countries have such a developed infrastructure as say, Germany, which has a very well developed chamber network in China," Lemcke says.

"The idea of this SME center is to provide a portal for all 27 member states, all with the same support to enter the market."

This support begins in Europe, with seminars and training programs for business representatives. The hope is that initiatives such as Understanding China will create a network of China business experts across the continent which can assist SMEs thinking about moving into the Chinese market.

There have been some early success stories. Representatives from business associations in Hungary have established a national support network for companies looking to expand into China. One former participant on the Understanding China program was sent by the Croatian chamber of commerce to the Shanghai Expo last year to oversee the country's pavilion.

There is also hope that offering assistance to EU countries without traditionally strong ties to China will aid businesses across Europe as a whole.

"We lobby for European business to have a joint voice wherever we are present," Lemcke says.

"We think we are always stronger together and we believe being perceived as European as opposed to Belgian, Lithuanian or Italian will benefit all companies in Europe in the end."