Status: 04/21/2023 2:55 p.m
The future of China business is causing controversy in business. While many companies still want to expand it, according to the EU Chamber of Commerce, a growing number of companies are looking for possible other locations.
According to a survey by the EU Chamber of Commerce, parts of the European economy are increasingly critical of China as a location. Nine percent of the companies surveyed have already decided to relocate current or future investments from China. Almost every sixth company is already looking around for possible alternative locations.
At the same time, many European companies want to stay in China. According to the EU Chamber of Commerce, half of the members even want to expand their business activities in China.
The strict lockdowns in China have put the business of many companies to the test; The result was production shutdowns and interrupted supply chains. According to the EU Chamber of Commerce, almost every fourth company looked elsewhere last year due to the strict Covid requirements.
Other countries are coming into focus
Chamber of Commerce President Jörg Wuttke sees a “clear decision for the potential of other economies”. Those who had already turned away from China this year wanted to go to other Asian countries, to Europe or India.
After the expiry of the strict corona requirements, concerns were recently raised by China’s solidarity with Russia despite the Ukraine war and the threats against the island state of Taiwan. Should China attack the country, the damage to the global economy could be enormous.
Increasing system rivalry
Politically, there are efforts in Europe to reduce economic dependence on China. After her recent visit to China, Federal Foreign Minister Annalena Baerbock warned that system rivalry was increasingly coming to the fore in relations with China.
The German economy is apparently less dependent on profits generated in China than assumed, as a new study shows. Between 2017 and 2021, profits of seven to eleven billion euros flowed back to Germany from the investments of German companies in the People’s Republic, according to the joint study published on Thursday by the Bertelsmann Foundation, German Economic Institute (IW), Mercator Institute for China Studies ( Merics) and the Federation of German Industries (BDI).
In an international comparison, China has reached a relevant size and is roughly on a par with the USA with twelve to 16 percent of the profit reflows from all over the world. However, the EU’s share is much higher at an average of 56 percent in the period under review.