Resource Efficiency vs. Competition : In 2020, Would Resource-Efficient Europe Be More Competitive than Non-Resource Efficient China?

339% was the increasing speed of China's foreign direct investment (FDI) into the European Union between 2007 and 2010 while China still took 3% of the total FDI in the European Union (EU) [Time, 19 December 2011]. Looking at the recent acquisition of Elkem (Norway), SaaB (Sweden), Volvo (Sweden), BorsodChem (Hungary) and Medion (Germany) by Chinese companies, this article raises questions on the relationship of resource efficiency and comparative competitiveness between China and EU and whether resource efficiency and eco-innovation measures of EU will sufficiently increase future competitiveness of European companies. Focused on the electronics industry, this article assesses economic impacts of existing and pending policies and regulations on resource management in China and EU in a qualitative and quantitative manner. By identifying the competiveness, innovation and compliance cost gaps in China and EU, this article will demonstrate the clear link between resource efficiency, innovation and competitiveness, compliance challenges, and suggest policy and practical recommendation to ensure a level-playing field in the global market. While ensuring resource efficiency as a shared objective of the international community is a difficult but justifiable challenge, regulatory divergence and law enforcement practices in each country may pose significant difficulties for small-and-medium sized companies (as well as global companies) to maintain its global competitiveness