Uncertainty Looms as Murky Chinese Laws Raise Concerns for European Businesses in China
European businesses in China are expressing growing concerns over the unpredictability and interpretation of Chinese laws, according to EU Vice President Vera Jourova. Jourova, who is also the European Commission’s digital chief, raised these concerns following discussions with Beijing officials on critical areas such as artificial intelligence (AI) and data governance.
The implementation of new regulations in China regarding cybersecurity, counterespionage, and data management has raised worries among foreign firms. The lack of clear definitions and lengthy procedures have compounded the challenges faced by European businesses operating in the country. Companies are uncertain about how these regulations will impact their operations in the world’s second-largest economy.
Jourova highlighted the ambiguous wording of the laws, particularly the lack of definitions for terms such as important data and the potential consequences for companies when transferring data outside of China. She also criticized the extended timelines and complicated procedures that foreign firms must navigate to conduct business in the country.
The concerns raised by European businesses come at a time of deteriorating ties between China and the West. The European Commission is increasingly focused on the vulnerabilities brought about by AI, misinformation, and data security, as well as the potential impact on human rights in China’s Xinjiang region.
During her meetings with Chinese officials, Jourova emphasized both the difficult business conditions faced by European firms and the implications of AI on human rights in Xinjiang. China has been accused of detaining over a million Uyghurs and other Muslim minorities in detention facilities across Xinjiang. Beijing argues that these actions are necessary to combat extremism and foster development.
While the European Union does not seek to completely decouple from China, Jourova emphasized the need to improve resilience, competitiveness, and protect European interests through measures such as de-risking economic interdependencies and advancing the technology security agenda.
However, China has pushed back against the de-risking strategy proposed by Washington and its European allies. In June, a foreign ministry spokesperson warned that anyone seeking to de-risk against China would create real risks and misidentify the actual target.
As European businesses continue to navigate the uncertainty caused by the murky Chinese laws, the need for clear and transparent regulations remains a crucial aspect of fostering a conducive business environment.
