Chinese companies say business environment in the EU is deteriorating

Chinese companies’ evaluation of the European Union’s business environment has dimmed for the fourth consecutive year because of the bloc’s so-called de-risking strategy and its policy measures targeting Chinese investors, a report by the China Chamber of Commerce to the EU says. The report warned the EU not to politicize critical business matters, particularly in key areas such as information and communication technology, electric vehicles (EVs) and renewable energy, referring to an anti-subsidy investigation of Chinese EVs initiated by the European Commission recently and its earlier description of the Chinese telecommunications company Huawei as a “high-risk vendor”. About 43% of 180 Chinese companies surveyed said they felt the business environment in the EU has deteriorated over the past year, giving it a score of 64 this year, compared with 65, 68, 70 and 73 for each of the years from 2019 to 2022. Declining scores were reported in areas such as politics, economics, the environment, industry, human resources, business services and research. Nevertheless, Chinese companies expressed a willingness to cultivate the European market, according to the survey, conducted between July and October.

About 90% of the companies surveyed reported revenue increases; the corresponding figure in last year’s survey was 70%. About 80% of the companies said they plan to raise their investment in the EU, something that the report said signifies “their long-term dedication to the EU market”. The report, titled “Building Trust, Boosting Prosperity”, called for collaboration and for both sides to capitalize on the positive momentum of resuming exchanges at all levels this year. Several senior European Commission officials have visited China in recent months. This year’s China-EU Summit will be held in Beijing from December 7 to 8, the European Council announced. The report stressed the importance of boosting mutual trust to address global challenges including geopolitics, climate change and energy and food security.

“For Chinese businesses, the European market is pivotal, serving as a key investment destination,” said Xu Chen, Chairman of the China Chamber of Commerce to the EU. “Their establishment of R&D and data centers, cybersecurity hubs and battery plants in countries such as Germany and Hungary contributes to local economies, job creation and innovation for sustainable growth. “Our shared future is brighter when we prepare for more collaboration, communication and understanding of each other.” The Chamber report set out 170 detailed proposals and recommendations.

Speaking at the ninth Europe Forum in Brussels, Fu Cong, Head of the Chinese Mission to the EU, voiced his deep concern regarding the EU’s crackdown on Chinese technology companies on the pretext of national security and an anti-subsidy investigation of Chinese EVs and possibly Chinese wind turbines, photovoltaic parts and steel and aluminum products. Many of the measures are “protectionist in nature and potentially in conflict with WTO rules”, he said. Such “perceived departure of the EU from a world leader of free trade has sent shock waves through the Chinese business community. We are deeply concerned about the EU’s growing assertiveness and unilateral actions as they have caused disruptions to our bilateral trade and investment,” he added, as reported by the China Daily.