Overlooking old Chinese temples with mountains in the background

Veröffentlicht in China News am 21.09.2023

China News: China and what to do? De-couple, de-risk, or what?

In the last couple of months, the news from and or about China was not very favourable. Too many voices, and too many opinions but no clear picture as to how to keep the business with China going. As a matter of fact, de-coupling from China is no option! But what does China want from us? To provide a clearer picture and some guidance the European Chamber of Commerce in China has released its European Business in China Position Paper 2023/2024 (Position Paper 2023/2024), shedding light on the perplexing messages emanating from Chinese authorities. This contradictory messaging has left European businesses uncertain about the nature of China's desired relationship with them.

The unexpected reopening of China's borders on January 8th, 2023, was initially met with optimism, with many anticipating a swift economic recovery. However, this rebound did not materialize for numerous companies. While official announcements aimed at enhancing the business environment were made, they were accompanied by a wave of legislation focused on national security. Consequently, this has deepened uncertainty and increased compliance risks.

The Position Paper 2023/2024 elucidates the challenges faced by European companies operating in China and offers over 1,000 constructive recommendations to the Chinese government on how to address them. It serves as a blueprint for attracting and retaining foreign investment in China while tackling the structural issues that impede the country's transition to sustainable and high-quality economic development. By actively collaborating with European companies to resolve the issues outlined in the report, the Chinese government has the opportunity to restore business confidence and revive the appeal of the Chinese market.

Jens Eskelund, the president of the European Chamber, emphasized the need for clarity on whether China intends to prioritize self-reliance and tighten regulations based on security concerns or fulfil its promises of market openness. He stated, "Our members are eager to deepen their engagement and make significant contributions to China's development, but they now require tangible actions."

Download the report, please click here.

Time will tell what direction the Chinese government will take. Overall, the economic recovery appears to be regaining traction. This positive trend can be attributed to recent policy actions taken in both the monetary and property sectors by the Chinese government and the central bank. While it may take some time for the complete impact of these measures to be realized, they are expected to contribute to the strengthening of the recovery. Although there are initial signs of improvement, it is premature for policymakers to reduce comprehensive support measures. The combination of fiscal and monetary support is expected to persist.