2 minutes agoFILE - President of the European Union Chamber of Commerce in China Jens Eskelund speaks during a press conference for European Chamber in Beijing, China on March 20, 2024. China is actively seeking foreign investment to boost its slowing growth, but that very sluggishness is weighing on company plans to grow their businesses in the world's second largest economy, an annual survey of more than 500 European companies has found.
Those older issues are now compounded by the weaker economy, eroding business confidence, said Jens Eskelund, the president of the European Chamber. Massive investment in industries such as solar power panels and electric cars has created intense price competition, squeezing profits. More than a third of the survey respondents said they have observed overcapacity in their industry. For 15% of the companies, their China operations finished 2023 in the red. Foreign companies need growth in domestic demand, not manufacturing capacity, Eskelund said.
“China’s allure as a top investment destination is fading," a chamber report on the survey said."Without meaningful improvements to the business environment, companies will continue to pursue opportunities in other markets that they perceive to offer more reliability, predictability and transparency.”