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[Exclusive Interview] EU companies in Guangdong well-prepared for rising labor cost

2015-October-30       Source: Newsgd.com

Mr. Alberto Vettoretti is the Chairman of South China Chapter of European Chamber of Commerce of China. Recently, he accepted the invitation of an exclusive interview with Newsgd.com, discussing about the European companies running business in Guangdong.

Newsgd: We noticed that 41% of South China Chapter Membership Composition are involved in manufacturing. How many companies among them have launched R&D center in Guangdong?

[Exclusive Interview] EU companies in Guangdong well-prepared for rising labor cost

(Graphic from South China Position Paper 2015/2016, published by European Chamber of Commerce of China on July 2, 2015)

Vettoretti: European members are of course heavy players when it comes to R&D. Sometimes we don't see too much down here (South China), because in Guangdong we have manufacturing arm, sometimes their head offices are indeed in Beijing and Shanghai. So R&D centers, most of the time, follows the head offices.

We have quite a few members into the electronics, into the medical devices, which also heavily invested here in R&D. There are about 20% of South China members have some form of R&D down here in the South.

We should look at whether these are full-cycled R&D, or only part of the process. I would say the majority, is only involved in the small part of the process.

Newsgd: Are there any reasons they don't want to invest R&D here?

[Exclusive Interview] EU companies in Guangdong well-prepared for rising labor cost

Vettoretti: The theft of the technology is still a big issue. If (the governments) are aware enough of the IP rights, I'm sure the European companies would like to invest much more R&D here.

So many companies still keep their best technology outside of China, for the reasons they're still afraid of some of the IP rights might eventually be stolen.

Newsgd: Guangdong government published IP report earlier this year, there are some improvements on cracking down IP infringement and setting up IP courts as well.

Vettoretti: Some praise should be spent to the Guangdong government in these regards. There's more interest in bring in the cases into the courts. The law is there.

[Exclusive Interview] EU companies in Guangdong well-prepared for rising labor cost

(Graphic from South China Position Paper 2015/2016, published by European Chamber of Commerce of China on July 2, 2015)

The law is great. but when it comes to enforcement, then it still has some issues. The issues are sometimes relate to the facts that judges and courts don't really implement all the fines against the companies commit.

We also see a lack of exposure of such cases. I believe if you have a list of all the cases which have been prosecuted, and this is made public. This will used as a term to have less companies eventually doing some infringement against the IP rights.

Editor: Chan

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