EBG urges China to prioritize economic growth, fair market practices
Date
9/12/2024 4:43:35 AM
(MENAFN) A European business group has urged China to refocus its efforts on economic growth, implementing meaningful reforms, and enhancing investor confidence by ensuring equal treatment for all companies operating in the country. According to the "Annual Situation of European Business in China" report, business confidence is currently at a historic low, driven by declining domestic demand and overcapacity in certain sectors. The report calls on the Chinese government to further open up its Economy and allow market forces to play a greater role in determining the allocation of resources. It also emphasizes the need for policies aimed at boosting domestic consumption to stabilize the economic environment.
The report, published by the European Chamber of Commerce in China, reveals that profit margins for about two-thirds of the companies surveyed earlier this year are at or below the global average, reflecting the challenging business climate. Adding to the tensions, China recently lodged a complaint with the World Trade Organization over tariffs imposed by the European Union on Chinese-manufactured electric vehicles. In response, China initiated an anti-dumping and anti-subsidy investigation into European exports of dairy products, wine, and pork. These retaliatory measures have sparked concerns about the possibility of an escalating trade war, further dampening the outlook for European businesses in China.
The uncertain economic landscape, coupled with a politicized business environment, has led many European companies to question the viability of investing in the world's second-largest economy. Jens Eskilund, President of the European Chamber of Commerce in China, highlighted that for some European investors, the perceived risks associated with operating in China are beginning to outweigh potential rewards, a trend that is likely to intensify unless critical trade issues are resolved. The report offers more than 1,000 recommendations to the Chinese government, aimed at tackling the current challenges faced by European businesses and restoring investor confidence. Among these recommendations, it calls on China to refrain from penalizing foreign companies for actions taken by their home governments, and to maintain stable policies that attract foreign investment without frequent modifications or retaliatory actions.
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