China retreats behind the Great Wall. That says the club of European companies in the country. "China seems to have opted for greater economic and political control, and accepts that this could lead to lower growth," said Jörg Wuttke, chairman of the European Chamber of Commerce (EuKvK) in a new report. "Our biggest concern is: where is our place?"
From tech companies to the real estate sector and education, the space to do business for private Chinese companies has also been shrinking rapidly in recent months. A development that was already started last year when tech company Alipay was banned from going public at the last minute. Foreign companies are also noticing that the tide is turning in China. Foreign companies are being pushed out of the market in various sectors, says the Chamber of Commerce. For example, companies in several provinces were unable to sell their health equipment because they "had no Chinese majority shareholder." "China wants to do what it can do itself," says Wuttke. "Even if that is more expensive and potentially more polluting." Vulnerable economy 'Buy Chinese goods', seems to be the motto. US sanctions have convinced policymakers in Beijing that the country is vulnerable if supply chains are cut. And so China wants to become self-sufficient in a range of sectors, including the chip industry. China has said it welcomes foreign companies. But companies are noticing that the red carpet is no longer being rolled out for everyone. H&M was hit after it said it wouldn't use cotton from Xinjiang over concerns about Uyghur forced labour. "That's why companies ask themselves: am I next?" says Wuttke about this. The club of European companies in China is also concerned about the ongoing travel restrictions, related to Covid. They notice that it is more difficult to get specialists and talents to China. "China has become less attractive to send workers to. Foreigners are a dying breed in China." For the past year and a half, only limited visas have been issued by China. Incoming travelers face strict quarantines lasting up to three or four weeks. "There are now more foreigners in Luxembourg than in Beijing and Shanghai," said Wuttke. Luxembourg has more than 600,000 inhabitants, Beijing and Shanghai together just under 50 million inhabitants. However, turning your back on the market is not an option for most companies. In an earlier report by the same Chamber of Commerce, only 9% indicated that they wanted to run. "If you're not in China, you're not a global player," Wuttke says. "Twenty to thirty percent of global growth is in China, the growth potential remains enormous. But the price of self-sufficiency will eventually be paid by lower growth, and less innovation."
0 Comments
Leave a Reply. |
Thank you for choosing to make a difference through your donation. We appreciate your support.
This website uses marketing and tracking technologies. Opting out of this will opt you out of all cookies, except for those needed to run the website. Note that some products may not work as well without tracking cookies. Opt Out of CookiesCategories
All
Archives
April 2024
|