Doing business in China is growing tougher, more uncertain, European business group says

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A report by a European business group says that uncertainty and “draconian regulations” have drastically raised risks for foreign businesses in China. The report by the European Union Chamber of Commerce in China, released Wednesday, urges China's leaders to do more to address concerns that it says have “grown exponentially” in recent years.

President of the European Union Chamber of Commerce in China Jens Eskelund speaks during a press conference for European Chamber in Beijing, China, Wednesday, March 20, 2024. Uncertainty and “draconian regulations” have drastically raised risks for foreign businesses in China, a report by a European business group said Wednesday.

The study, compiled by the chamber and the China Macro Group consultancy, echoes concerns that have been raised by European and American companies operating in China. Foreign investment fell 8% last year from a year earlier as companies recalibrated their commitments in the world’s second largest economy.

At the same time, Beijing has not addressed many of the issues raised by foreign businesses, among them access to government procurement contracts, which are vital given the huge role of state-owned companies in the economy. “The business community would like both sides to be much more clear about the definitions of national security and how it’s determined,” he said in an interview before an annual chamber banquet with Chinese officials. “Because what we need is ... predictability, and we need certainty.”

He said Europe’s approach to trade and investment issues was “targeted, very limited and very focused on eliminating ‘critical dependencies,’” not at competing with China. But companies still must hedge against risks or potentially be blindsided by policy shifts.

 

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