The European Union Chamber of Commerce in China has released its European Business in China Position Paper 2022/2023 on 21 September. The report covers some European business concerns about the investment environment in China. According to their analysis, an inflexible COVID-19 policy led to unprecedented disruptions to business and exacerbated pre-existing challenges. Also, favoritism towards state-owned enterprises and increased politicization of business have further eroded China’s standing as an investment destination. Companies are increasingly viewing the country as less predictable, reliable and efficient, and with geopolitical tensions on the rise, it makes the future less certain.
These policies could create isolation between China and Europe through two separate systems. Companies have to make distinct policies and procedures when dealing with China compared to the rest of the world, such as developing separate supply chains to navigate the COVID rules. This could be a threat to economic growth.
Although most European businesses stay optimistic about the future investment opportunities in China, the chamber advices China to make more efforts to regain the confidence of investors. This could be achieved through more transparency within the Chinese business environment, especially now with the new supply-chain legislations in the EU and the United States.
Interested in reading the full report? Click here.