Beijing, June 8, (dpa/GNA) – A new survey of European companies in China found they want to increase their business activities in the world’s second-largest economy, but cite pandemic-related entry restrictions as putting the brakes on their plans for now.
About 59 per cent 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 9 per cent 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 per cent 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 starting 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 is causing problems for 73 percent of the companies surveyed.
Sixteen per cent of companies also said that forced technology transfers are an unresolved problem for them.
EU firms are also worried about the changing political climate, with 41 per cent complaining that business is getting too politicized.
In addition to the ongoing trade war with the US, relations between the EU and China have 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 are not pulling out of China, she said, rather they are increasingly trying to build separate supply chains that de-link business in China from the rest of the world in order to minimize risks.
GNA