European businesses are less confident in China’s economy now that its expected post-COVD economic boom has busted and its relations with Europe and the U.S. are deteriorating, according to a survey by the European Union Chamber of Commerce in China.
Doing business with China has become harder over the past 12 months, about two-thirds of businesses said, a 4-point increase from the poll a year ago.
Another 11 percent reported shifting, or planning to shift, investments out of China. An additional 7 percent said they might do so.
Although there is not yet a tide of companies abandoning the Asian giant, “stakeholders in China should worry about the direction” the poll indicates, chamber president Jens Eskelund said in a statement announcing the survey results.
The European Commission has formulated a new economic security strategy that calls on countries to impose stricter controls on European investments in countries that could pose a security risk to the region.
China and Russia are not specified in the strategy statement but are seen as the primary risks, The Wall Street Journal noted.
TREND FORECAST: Again, as we have extensively detailed in previous Trends Journals, China’s COVID War and zero-COVID policy has destroyed the lives and livelihoods of hundreds of millions of its people. And as we recently saw when U.S. Secretary State Antony Blinken visited Beijing, the photographs show everyone around him and China’s President Xi were all masked up… still fighting COVID.
Despite China’s attempts to pump cheap money into its system to rejuvenate its economy, doubts persist as to when and if its economy will gain pre-COVID War strength. It will take considerable time to demonstrate a consistently positive business climate that can restore confidence.
China’s foreign trade will decline further into the future, both because Western companies look for friendlier and more reliable manufacturing sources and because of the global economic funk. However, with its yen weakening, its products will be a lot cheaper to buy from countries with stronger currencies.
Also, as the West ramps up its tension with China, Beijing is, and will continue to tighten and expand trade links with its Asian partners, such as India and Vietnam. Those closer trade ties will foster political alliances, dividing the world more sharply into Eastern and Western camps.