In 2022, China continues to be an attractive and reliable business destination despite ongoing challenges, such as the Covid-19 pandemic and geopolitical conflicts. Many Belgian companies are still struggling with how to manage their China business from a distance and the soaring prices of international shipping keep breaking records. Despite the sustained pressure from Covid-19 outbreaks and supply chain bottlenecks, China’s economic outlook for 2022 is predicted to be relatively bright, with GDP growth forecast at over 5 percent. Even though closed borders and high products prices will have an impact, nevertheless international trade is still reaching records and foreign companies are maintaining an optimistic outlook.
Stability will be a priority for the Chinese economy in 2022. The relatively stable economic situation that has benefited consumption and productivity among domestic companies also forms an advantage for foreign companies. Despite the relative economic slowdown, China’s economy is still set to grow in 2022 at a rate faster than the global average. According to the World Bank’s prediction, China’s real GDP growth will reach 8 percent in 2021 and evolve to a solid 5.1 percent in 2022.
On the 25th of November 2021, the Belgian-Chinese Chamber of Commerce (BCECC) organized a webinar together with InterChina, a China-focused cross-border advisory firm. InterChina surveyed 287 China country managers across multiple sectors and found out that a majority of respondents continue to believe in the China opportunity and are doubling down on their China businesses. More than a quarter said that China now accounts for more than 20% of global sales, while almost a third said their Chinese business now accounts for more than 20% of profits. Driven by the consumption growth and the modernization of the economy, more than four fifths said that China will be their number one or two top markets worldwide by 2030.
However, this comes against the backdrop of a new geopolitical era and rapid economic, regulatory and social change in China. Examples are the new policy initiatives, such as ‘dual circulation’ and ‘common prosperity’ and measures taken against big-tech companies, for-profit tutoring and online gaming, as well as tighter controls over the higly-leveraged property sector. Belgian SMEs need to be aware that these changing rules of engagement in China come together with the strengthening of local competition and the emergence of sophisticated technology ecosystems.
As a result of China’s growing assertiveness and technological power, there is growing perception in Europe that China poses a threat to the Western world. Current geopolitical developments and the inability to travel to China contribute to this feeling of ‘disconnection’ with China. However, this should not cause us to hit the pause button with respect to China. On the contrary, 2022 still offers a unique opportunity to look forward to a new phase of cooperation with China.
When planning your China business for this year, you should keep in mind that borders will probably remain closed for most of 2022. The latest news is forecasting a potential opening up only in 2023, so doing business with China will remain a big challenge for many European SMEs.
The year 2021 has again been a challenging year for the Belgian-Chinese Chamber of Commerce (BCECC). Nevertheless, we have had great engagement from our members and organized many virtual events and webinars with great speakers and satisfactory attendance. We look forward to continue supporting our members in 2022 with many activities.
For more information and assistance in doing business with China in 2022, please contact us or follow the official WeChat account of the Belgian-Chinese Chamber of Commerce.
- InterChina Insight Part I & II, January 2022:
- CBBC Focus: China’s economic outlook for 2022
- Asia Briefing: An Introduction to Doing Business in China 2022
- PTL Group: China business circles’ last update for 2021
- China Briefing: China 2022 – the economy, covid, business, and regulatory landscape
- Xinhua: China’s economic outlook – what to watch in 2022