China needs to boost economic reforms – European Chamber

China must refocus on economic growth and reforms while boosting investor confidence by creating a level playing field for all companies, according to the paper published Wednesday by the European Chamber of Commerce in China.

The paper highlighted concerns over “all-time low” business confidence due to weak domestic demand and overcapacity in key sectors, urging China to open its economy, introduce policies to increase domestic demand, and allow the market to guide resource allocation.

Two-thirds of companies surveyed reported profit margins in China at or below the global average. Rising tensions, including China’s recent WTO complaint over EU tariffs on electric vehicles and retaliatory investigations into European imports, have raised concerns about a potential trade war.

Jens Eskelund, president of the European Chamber, warned that many European businesses are rethinking investments in China due to the country’s economic slowdown and politicised business environment.

The paper offers over 1,000 recommendations to address these challenges, including avoiding punitive actions against companies and ensuring consistent implementation of foreign investment policies. It also calls on the EU to engage with China in a measured and balanced way during disputes.

Attribution: the Associated Press (AP)

Subediting: M. S. Salama