On September 24, Xian Janssen Pharmaceutical (Xian Janssen), a pharmaceutical subsidiary of Johnson & Johnson with 35 years of operation in China, announced the signing of a memorandum of cooperation with the First Affiliated Hospital of Xian Jiaotong University to explore the concept of an internet-based and patient-centered “e-hospital”.

This strategic partnership is aimed at delivering a comprehensive new e-hospital model, which will provide virtual health services for patients, initially focusing on oncology (hematology and solid tumors), immunology and pulmonary arterial hypertension. The partnership will also contribute to improving the health of people living in China’s Central and Western regions and support the construction of medical consortiums in Gannan, Gansu provinces. It helps develop their digital infrastructure and ability to introduce high-quality medical services to local people and improve local medical capacity. The cooperation is a pilot between a public hospital and a multinational pharmaceutical company. Xian Janssen will empower internet+ healthcare from treatments to new patient support programs.

There is an increasing demand from patients for online consultations and medical services. For example, patients with pulmonary hypertension face problems to go to medical institutions for treatment and follow-up. Beyond the current internet+ healthcare model mainly involving repeat visits and prescriptions for patients with chronic diseases, the cooperation aims to explore the patient and disease management focused on severe diseases such as oncology, immunology and rare disease. “This partnership demonstrates our commitment to improving the health of Chinese patients above and beyond the work we do to research and develop innovative medicines,” said Asgar Rangoonwala, President of Xian Janssen. “Under the impact of Covid-19, patients cannot access medications offline or seek help from their doctor through traditional channels. By adopting the model of e-hospital, more patients can benefit from medical consultations in a more convenient and efficient way,” Rangoonwala said.

The evolving medical needs and demand for new solutions are especially prominent during and after the outbreak of Covid-19, which has undoubtedly changed the medical needs of patients to a considerable extent. The e-hospital is only part of Xian Janssen’s efforts to better safeguard the health of Chinese people with innovative solutions and technologies. Over the past 35 years, as one of the earliest multinational pharmaceutical companies entering China, Xian Janssen has accompanied and witnessed China’s healthcare reform and the evolution of innovative healthcare development. The company has also been collaborating with digital companies to provide patients with online medical and health services, such as questions about medication, disease consultation, outpatient appointments, and e-prescription. The collaboration between Xian Janssen and AliHealth has benefited more than 15 million Chinese patients so far.

First established in 1985, Xian Janssen has become one of the fastest-growing MNCs with approximately 3,000 employees across the country. In June 2019, following an investment of USD400 million, Xian Janssen opened its new supply chain innovation hub in Xian for commercial production. It sets a new standard in pharmaceutical manufacturing in China and helps to serve the rapidly expanding needs of the country and other markets in the Asia Pacific. The plant features world-class manufacturing technologies and advanced quality control systems. “With our novel innovation strategies and forward-looking investment models, Xian Janssen enables the discovery of game-changing medicines and deployment of a transformational patients’ service model in China to support the fast-changing demands from patients and consumers,” Rangoonwala told the Global Times. “Beyond innovative medicine, we also intend to extend to tailor-made solutions that can optimize patients experience alongside the treatment journey.” Xian Janssen has been launching the Patient Support Program (PSP) in its key therapeutic areas, with features including an online consultation and order system, patient education program and a superior patient experience of using its innovative drugs with special made patient-care packs. The key disease areas include psychiatry, neurology, hematology, immunology, solid tumors, and rare diseases, the Global Times reports.

An EU-China leaders’ meeting took place on September 14, 2020 via videoconference. The EU was represented by Charles Michel, President of the European Council and Ursula von der Leyen, President of the European Commission, with German Chancellor Angela Merkel for the Council Presidency. President Xi Jinping represented China. The EU High Representative for Foreign Affairs and Security Policy, Josep Borrell, also participated. The meeting followed the 22nd EU-China summit held by video with Prime Minister Li Keqiang and a videoconference with President Xi Jinping in June.

The videoconference covered trade and investment, climate change and biodiversity, the response to the Covid-19 pandemic, as well as international affairs and other issues. With regard to the negotiations for an ambitious EU-China Comprehensive Investment Agreement (CAI), while both sides registered progress on the rules regulating the behavior of state-owned enterprises (SOEs), on forced technology transfer and on transparency of subsidies, the EU emphasized that more work was urgently needed on the issues of rebalancing market access and on sustainable development, according to a press release by the European Council. The EU called on China to step up its ambition on these issues. The two sides reaffirmed their objective of closing the remaining gaps before the end of the year. The EU side emphasized that high-level political engagement from China would be required to achieve a meaningful agreement. On other trade and economic issues, the EU reiterated its call on China to engage in future negotiations on industrial subsidies in the WTO. The EU stressed that, in line with China’s stated commitment to open up and ensure that EU producers are fairly treated on the Chinese market, more needed to be done to improve market access in the agri-food trade, financial services and the digital sector. The EU also again made clear its concerns on overcapacity, both in traditional sectors such as steel and aluminum as well as in high tech.

The two sides welcomed the signature of the EU-China Agreement on Geographical Indications which will improve access to the Chinese market especially for high-quality European agricultural products. The EU underlined the need for reciprocity and a level playing field in the area of science and technology, underpinned by high ethical and integrity standards. Leaders welcomed and agreed to continue the high level digital dialogue. They looked forward to concrete progress on ICT standards, product safety and research and innovation.

On climate change and biodiversity, the EU encouraged China to strengthen its climate commitments in terms of peaking carbon dioxide emissions and setting the goal of climate neutrality domestically. The EU also stressed the importance of a moratorium in China of building coal-fired power plants and financing their construction abroad, at least as part of a global initiative. The EU also encouraged China to launch its national emission trading system soon. The two sides agreed to establish a High-Level Environment and Climate Dialogue to pursue ambitious joint commitments on these issues. The EU noted that joint commitments by both sides on biodiversity could be a game-changer at the global level and China has a key role to play as host of the Conference of the Parties next year. An ambitious global agreement would be a major achievement.

On the Covid-19 response, the EU emphasized the shared responsibility to participate in global efforts to stop the spread of the virus, boost research on treatments and vaccines, and strengthen the role of the World Health Organization (WHO), including through the full implementation of the World Health Assembly resolution of May 2020. The EU also underlined that the recovery measures should support the transition to a greener and more sustainable economy. China’s full engagement in G20 efforts to support low-income countries and effectively implement the G20 – Paris Club Debt Service Suspension Initiative will also be essential. The EU also brought up human rights issues with the Chinese side, according to the EU press release.

China’s Global Times wrote that Chinese, German and EU leaders reaffirmed that they will further strengthen cooperation from trade to epidemic control, sending what experts call a resounding signal that the parties remain committed to pursuing pragmatic engagement rather than differences, “as some ill-advised officials and pundits in the U.S. are actively pushing for.” Chinese President Xi Jinping stressed that China and the EU must adhere to four commitments, namely peaceful coexistence, open cooperation, multilateralism, as well as dialogue and consultation, in order to push for the sound development of bilateral ties. The virtual meeting is set to inject impetus into China-Europe cooperation, particularly in economic and trade relations, and provide desperately needed confidence into a global economy battered by not only a global pandemic but also geopolitical and trade tensions created by an increasingly destructive U.S. government, Chinese experts said. Among the significant outcomes of the summit was a reaffirmation from the leaders that they will complete negotiations for a bilateral investment treaty (BIT) by the end of the year. The deal, once signed, is expected to greatly expand each other’s market and provide greater protection, as reported by the Global Times.

In the first eight months of the year, China’s trade with the EU grew by 1.4% year-on-year to CNY2.81 trillion, according to official Chinese data. This was higher than trade between China and the U.S., which fell 0.4% to CNY2.42 trillion. Also, in the second quarter of the year, China overtook the U.S. as Germany’s largest export market, with German exports to China reaching €23 billion.

Premier Li Keqiang will attend the World Economic Forum (WEF) Special Virtual Dialogue with Global Business Leaders on September 15. He will deliver an address and have discussions with the business leaders attending the meeting.

The European Union Chamber of Commerce in China called on China to make bold commitments to conclude the EU-China investment agreement by year end as the Chamber released its European Business in China – Position Paper 2020/2021. This annual publication delivers to the Chinese government over 800 detailed recommendations for improving the business environment, spread across 34 industry sectors and horizontal issues, the Chamber wrote in a press release. The Position Paper details how persistent issues, such as limited market access and a complex regulatory environment, prevent European businesses from contributing fully to China’s sustainable development. This significant amount of untapped market potential could help to not only boost economic growth, but also stave off serious problems that have for some time threatened China’s development, like its burgeoning debt situation and rapidly ageing population. While the European Chamber has been advocating for increased market access and a level playing field for its members for the past two decades, it is now critical for China to enact meaningful reforms due to the economic devastation wreaked by the Covid-19 pandemic and the looming threat of decoupling.

Although European companies remain committed to the market, a number of ‘dichotomies’ that have emerged in recent years raise questions over which direction China will eventually decide to move in:
• The ‘one economy, two systems’ model, which divides the private and state-owned economies
• The country’s economic potential versus its market access regime
• The persistent divide between China’s rhetoric and the reality on the ground
• The clash of China’s charm offensive towards European business and its ‘wolf warriors’ in Europe

These issues are further compounded by the increased politicization of doing business in China. This is a serious factor that threatens business operations in ways that companies can neither predict nor control. European leaders currently still have the appetite for engagement, but public opinion in the Old Continent is souring on China: voters are voicing their concerns over the unbalanced economic relationship, allegations of forced labor in Xinjiang and the autonomy of Hong Kong. These issues present a real challenge for the EU and China to find an effective way forward before the window of opportunity closes, according to the European Chamber.

It is therefore imperative that the EU and China strive for a political agreement on the Comprehensive Agreement on Investment (CAI) by the end of 2020. A half-baked deal that leaves the most critical issues unaddressed would be unwelcome and futile. Instead, it must deliver tangible results and secure open and fair markets on both sides to bolster the relationship and lay the groundwork for further productive engagement.

“Having inked bold economic agreements with numerous diverse partners in recent years, it is not revolutionary that the EU should expect a market that is as open and fair as its own when entering into such an agreement with China,” said Joerg Wuttke, President of the European Union Chamber of Commerce in China. “After more than 30 painful rounds of CAI negotiations, there’s a real sense that this is now or never,” the Chamber concluded in its press release. To download the report, click here.

In a Chinese reaction to the Position Paper, Bai Ming, Deputy Director of the International Market Research Institute at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times that “the EU has raised some issues about the Chinese market, but there are also obstacles in the EU that must be overcome.” Bai said that the difficult situation posed by the Covid-19 pandemic and rising global tensions requires “political wisdom” on both sides to turn this into an opportunity for cooperation rather than conflict. While the bilateral relationship faces many complications, and some EU countries and the EU Chamber have been more focused on the negatives, the overall relationship remains on a solid track because both sides need and support each other, Cui Hongjian, Director of EU Studies at the China Institute of International Studies, said.

Chinese companies are taking a less rosy view of doing business in the European Union compared with last year, as an index measuring the ease of doing business in the EU declined from 73 points in 2019 to 70 this year, according to a report by the Chinese Chamber of Commerce to the EU (CCCEU) and consultancy Roland Berger. Four months of in-depth interviews and surveys of Chinese executives were conducted across Europe. CCCEU Chairwoman Zhou Lihong said that as Covid-19 wreaks havoc on EU economies, most Chinese member companies and institutions have been struggling to weather the pandemic storm. “Adding to their woes is that Brussels and several member states continue to adopt a ‘conservative’ approach to foreign investment, security screening and foreign subsidies, among others, leading to ‘unprecedented’ uncertainties for Chinese companies and major concerns,” she said.

According to the report, the decline in favorable views centers on aspects of the political environment, macro-economic and sector-specific environments and the labor market. Overall, 68% of the respondents feel the EU has been tightening its China policy; 72% believe that the EU market outlook is worse than last year; and 55% experience more difficulties in hiring European and foreign talent. The survey also found that if the ease of doing business in the EU were to improve, 60% of Chinese companies in the EU would invest more in the market and nearly 20% intend to do so “significantly”, the China Daily reports.

Foreign business chambers and associations will be allowed to report issues related to the investment environment to Chinese authorities under a new grievance mechanism that will be effective on October 1, the Ministry of Commerce (MOFCOM) said. Foreign investors who are yet to set up entities in China but have made commitments to the market will be eligible to file complaints as well. The new complaint handling mechanism tailored for foreign investors will replace interim measures to deal with foreign investors’ complaints that have been in place since 2006. The Ministry started revising the interim rules in November 2019, and it released draft rules for the new grievance mechanism in March. The period for public comments ended in late April.

The announcement of the new mechanism amid the Covid-19 pandemic, the rise of unilateralism and protectionism, and the resurgence of anti-globalization is a pivotal move to stabilize foreign investors’ expectations, Zong Changqing, Director of the Department of Foreign Investment Administration at MOFCOM, told reporters. It also signifies China’s long-standing pledge to improve the protection of the legitimate rights of foreign businesses and continue its open-door policy, he added. China’s actual foreign investment in U.S. dollar terms shrank 2.3% year-on-year to USD76.98 billion in the first seven months. The new mechanism aims to resolve foreign investors’ complaints, said Bai Ming, Deputy Director of the International Market Research Institute at the Chinese Academy of International Trade and Economic Cooperation, a think tank under MOFCOM. “Foreign investors will be able to rely on the new mechanism, which is supposed to complement the new Foreign Investment Law, to have their complaints and grievances heard and handled, thereby enabling worry-free investing,” Bai told the Global Times. The new Foreign Investment Law came into force on January 1.

The Ministry received 454 suggestions from international organizations, business chambers and associations, foreign-invested firms, local complaint channels, experts and scholars, Zong disclosed. The final version of the new mechanism has taken into account a variety of concerns raised by these parties. Including prospective foreign investors in the new mechanism and adding a clause that allows business chambers and associations to file complaints regarding the investment environment are moves taken in response to advice from multiple institutions, including the American Chamber of Commerce in China (AmCham China), according to Zong. The new grievance mechanism forbids any clampdown on those filing complaints and shortens the deadline of resolving unsettled complaints to one year from the previous two years, the Global Times reports.

The rule consists of five chapters and 33 articles, further refining the requirements of the Foreign Investment Law and its implementing regulations and updating and optimizing of its system for handling foreign companies’ complaints, the China Daily adds. The regulation is meant to implement article 26 of China’s Foreign Investment Law, which provides that the state establishes working mechanisms for complaints by foreign-invested companies, promptly handles the issues raised by them or their investors and coordinates and improves policy measures in question, said Zong Changqing, Director General of the Ministry’s Department of Foreign Investment Administration. He said the rule has broadened the scope of complaints that can be made by foreign companies. It has clarified that global companies can apply to agencies that handle complaints for coordination and settlement of their legal rights and interests that may be infringed by administrative actions. The companies also can report to the government units that they are having problems with in running their business. In addition to global companies’ right to suggest the government improve relevant policies and measures, foreign chambers of commerce can also report issues concerning China’s investment environment to authorities that handle complaints.

China saw its foreign trade and ability to attract foreign direct investment (FDI) rebound during the second quarter of this year. China is the world’s largest consumer market, with 400 million middle-income people and a large number of rural residents with strong purchasing power, who are increasingly pursuing better life and services, said Wei Jianguo, Vice Chairman of the China Center for International Economic Exchanges. He said this explains why multinationals have not withdrawn from the country. Instead, many of them, including BASF, BMW, Nestle and Coca-Cola, have increased investment in China as they believe that investing closest to the major consumer base is the cheapest and most efficient way to compete with other established rivals in this market. Thanks to global investors’ rising confidence, China saw FDI rise 8.4% on a yearly basis in the second quarter of the year. In June, FDI inflows expanded 7.1% year-on-year to CNY117 billion, the Ministry of Commerce (MOFCOM) said.

Nouryon, the Netherlands-based chemical manufacturer, said earlier this month that it will build a new plant in Ningbo, Zhejiang province, to produce tert-Butyl hydroperoxide and tert-Butyl alcohol, essential ingredients in the production of polymers and composites, and two key intermediates in its organic peroxides business. The manufacturing facility is scheduled to be completed in the second half of 2021 and will have an annual capacity for 35,000 metric tons of TBHP and TBA. “This is an important step in integrating our regional supply chain for TBHP, which is currently imported,” said Johan Landfors, President of Technology Solutions at Nouryon. “Demand for TBHP and TBA continues to rise in Asia, and our new facility will ensure that we can meet that demand for years to come.” He said the new facility represents a significant investment for the firm to build its presence in fast-growing markets. It also underlines its focus on working with local partners.

“Some countries are considering industrial self-supply and removing industrial chains from China on the heels of the outbreak, but I think the cost is too high and it cannot be done in reality,” Ludovic Subran, Chief Economist at Germany-based insurer Allianz, told the Global Times, taking note of China’s overwhelming advantage in manufacturing electronic products, auto parts, and mechanical equipment. Subran said that the onslaught of the pandemic has put the global economy on halt and dealt a blow to the insurance industry. “But China’s insurance sector has been bouncing back since the second quarter. More consumers are willing to learn and purchase insurance policies after the pandemic ebbs,” Subran noted. Riding on the boom, he estimated that by 2030 the revenue of China’s insurance market will likely hit €777 billion, which equates to the combined revenue from the UK, France, Germany and Italy.

Swedish furniture-maker IKEA also scaled up investment in China recently. It opened its first IKEA City store in downtown Shanghai last week, the first such store in the Chinese mainland, after the launch of the online IKEA Tmall flagship store in March. IKEA said it is “very optimistic and confident” over its business in China in the second half as Chinese consumers lean toward convenient and fast shopping experiences. “In the future, we plan to have more reach in the third and fourth-tier cities here in China, and will continue to expand our online and offline marketing channels,” IKEA said.

Leon Wang, Executive Vice President, International and China President at AstraZeneca, said that the company is confident of China’s improving investment environment and the rosy prospects. “AstraZeneca always looks to China’s powerful economic potential despite the challenge of the pandemic, and we will always support China’s development with action,” Wang said, as reported by the Global Times.