‘Ideology trumping economy’: EU body warns firms souring on China | Business and Economy
The European Union’s Chamber of Commerce says companies increasingly see China as “less predictable, reliable and efficient”.
A leading European industry group has warned that “inflexible” COVID-19 containment and business politicization are eroding the country’s position as an investment destination.
The European Union Chamber of Commerce said in a report on Wednesday that companies increasingly view China as “less predictable, reliable and efficient” due to prioritizing ideology over the economy and planning. pragmatic policy making.
The business lobby group says Beijing’s extremely strict “COVID zero dynamic” policy has caused “unprecedented disruption” to the industry, while factors such as bias towards state-owned enterprises further undermined confidence.
The industry body, which represents more than 1,700 European companies in China, said most companies have put their operations in the country on “wait and see” and have begun assessing markets. alternative market, with the majority of European investment in the last 4 years. years come from a handful of large companies.
“While Beijing’s reform agenda in the past helped ensure stability, spurred economic growth, and facilitated massive inflows of foreign direct investment, ideology is now taking over. advantage in the economy,” the industry body said in an accompanying press release.
The European office said Beijing should introduce “comprehensive market reforms” to restore business confidence, which will require political space policymakers to “”make mistakes”, discuss ideas and ultimately change course.”
“European companies still want to contribute to China’s economic development, but investment in the country is unlikely to increase while China is closed and companies see political and economic risks. economy and prestige are on the rise,” said Jörg Wuttke, president of Europe. Union Chamber of Commerce in China.
“Companies are also calling for transparency in the business environment, as they now have to align their China operations with both corporate commitments and new supply chain legislation in the EU and US. Ky.”
China is the last major economy to use draconian restrictions like lockdowns and border controls as part of a zero-tolerance strategy to destroy COVID-19 at all costs.
The controversial strategy made a heavy damage to The world’s second-largest economy, avoided a second-quarter contraction with a 0.4% increase in gross domestic product (GDP).
Beijing has defended the policy as necessary to save lives, while also warning against the virus.
