Foreign
EUROPEAN companies said in China’s new survey they wanted to increase their business activities in the world’s second-largest economy but cited pandemic-related entry restrictions as limiting the brakes on their plans for now.
About 59 percent of companies said they were considering expanding their operations in China, the European Union Chamber of Commerce in China’s business confidence index survey found.
By contrast, just nine percent of the firms questioned said they were thinking about pulling out of the market, the lowest proportion ever recorded in the annual survey.
Overall, EU firms were more positive about their growth prospects in China than at any time since 2014. Some 68 percent said they were optimistic about business in their sector.
According to the Chamber of Commerce, companies benefited from the fact that China overcame the pandemic faster than other regions and that the economy was able to recover from last year.
The companies still had a range of criticism to offer, including problems with market access and feeling at a disadvantage in China compared to domestic competitors.
In the short term, the strict entry restrictions imposed by China because of the pandemic have made it much more difficult to bring foreign specialists into the country or to keep them there.
This had caused problems for 73 percent of the companies surveyed.
Sixteen percent of the companies also said that forced technology transfer was an unresolved problem for them.
EU firms were also worried about the changing political climate, with 41 percent complaining that business was getting too politicized.
In addition to the ongoing trade war with the U.S., relations between the EU and China had deteriorated significantly in the dispute due to the human rights situation in the western region of Xinjiang.
Beijing and Brussels have imposed mutual sanctions.
“Our members’ long-term commitment to the China market paid dividends in 2020, but geopolitical tensions are forcing us to reconsider our strategies here,” said Charlotte Roule, board member of the EU Chamber of Commerce.
EU companies were not pulling out of China, she said, rather they were increasingly trying to build separate supply chains that de-link business in China from the rest of the world in order to minimize risks. (dpa/NAN)
– June 08, 2021 @ 12:12 GMT
Tags: but COVID-19 entry rules take bite EU firms bullish about China
