EU businesses worry more about China's economic slowdown than geopolitical conflict

Beijing's central business district on June 21.

The European Chamber of Commerce in China (EUCCC) has released the results of a survey of European Union (EU) companies operating and doing business in the country. Accordingly, the number of EU companies that continue to consider China among the top three countries to invest in in the future has fallen to the lowest level since the annual report was conducted in 2010.

As rising interest rates and inflation weigh on consumer demand in Europe and the US, companies in China are facing plummeting prices.

The number of EU companies reporting a decline in income from China in 2022 has tripled compared to 2021. In addition, China's importance to their global profits has declined for the second consecutive year, Reuters reported on June 21, citing the report.

“The decline in business sentiment has been going on for three years and cannot be reversed overnight,” the EUCCC commented.

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The EUCCC's findings, based on members' views from February to early March, also revealed a record number of companies lost business opportunities last year due to lack of market access and policy barriers.

President Xi Jinping's increased focus on national security has left many foreign companies uncertain about how to navigate a market where regulations are often vaguely worded.

Foreign direct investment (FDI) into China has fallen sharply since the country lifted its strict Covid-19 prevention policies late last year. The EU's trade deficit with China is also expected to widen further in 2022, reaching €396 billion.

Source link: https://thanhnien.vn/doanh-nghiep-eu-lo-kinh-te-trung-quoc-tri-tre-hon-la-xung-dot-dia-chinh-tri-185230621120930804.htm