China EU Photo:VCG

China Chamber of Commerce to the EU (CCCEU) told the Global Times that the voting outcome of Corporate Sustainability Due Diligence Directive (CSDDD) on February 28 is perceived as a response to the apprehensions widely shared by the business communities. It addresses worries regarding burdensome compliance and excessive administrative costs that could potentially result from the proposed CSDDD rules.

The response came after the EU failed to pass a law in favor of the CSDDD on February 28.

Reuters reported that not enough envoys from the 27 EU members backed the law for it to proceed, with opposition led by Germany's pro-business Free Democrats, part of the three-party governing coalition, who argued it would burden business with excessive bureaucracy.

The rules did not name China directly, but the rules would have required EU firms with more than 500 employees and €150 million ($162.7 million) net turnover worldwide to conduct detailed audits of their suppliers and partners.

China is the EU's second largest trading partner, largest source of imports and third largest export destination. If the bill is passed, it is widely believed that Chinese companies will become important targets of its supervision.

Chinese experts also said the legislation itself lacks credibility and appears to be an attempt to use human rights and environmental issues to suppress China, which is doomed to fail.

In a written submission to the European Commission back in May 2022, the chamber expressed concerns regarding the proposed CSDDD rules, citing potential unbalanced, disproportionate, and ambiguous obligations for all business operators.

Our members also voiced apprehensions that CSDDD might necessitate subject companies undertaking due diligence along their entire value chains, both directly and indirectly, at a level surpassing their control and capabilities, CCCEU said.

The CCCEU and its members reaffirm they are supportive of international and multilateral initiatives when it comes to respecting human rights and environmental protection.

Chinese authorities have been rejecting EU accusations of so-called human rights violation. The groundless accusation on China's human rights conditions, spreads disinformation, tarnishes China's image and gravely violates China's internal affairs, Chinese foreign ministry spokesperson Mao Ning told a press conference in December.

Global Times