European companies are becoming increasingly concerned about China’s new economic course. They see “worrying signs” that the country’s economic focus is increasingly inward, the president of the European Union Chamber of Commerce in China said.
Jörg Wuttke believes that there are “significant doubts about the country’s future growth”.
The five-year plan adopted by the Communist Party in March states that the country wants to become less dependent on the rest of the world and ultimately achieve a high degree of self-reliance. The interest group sees the danger in this that European companies can play an increasingly smaller role in the Chinese economy, especially in high-tech sectors. Beijing’s recent steps to make companies comply with stricter regulations are also viewed with suspicion by European companies.
In the short term, there are no problems, says Wuttke. Last year, many large European companies achieved record sales and profits in China, which quickly recovered from the corona crisis. Moreover, the prospects remain good for the coming years, according to the organization representing 1,700 European companies in China.
American companies are also concerned about Beijing’s new course vis-à-vis large companies. Still, they are more optimistic than the past three years about the business climate in China, according to an annual poll by the US Chamber of Commerce in China. It is also an interest group for companies.
Under US President Joe Biden, trade relations with China have returned to normal after his predecessor Donald Trump’s trade war. In addition, US companies saw their sales and profits increased in China last year. However, the companies do question the strict Chinese corona policy in which entire neighbourhoods or cities are sometimes isolated for a single infection.