European Union Chamber of Commerce in China (EUCCC) and Roland Berger GmbH released the Business Confidence Survey 2016 on June 7 in Beijing. The Survey shows that 41% of European enterprises are re-assessing their business in China and plan to reduce costs by layoff and other measures.

 

The Survey points out that after 35 years of dynamic economic development it is natural that the pace of growth should ease off in China, a process that is already well underway. Despite this, China remains a significant investment destination for European companies with 47% reporting that they plan to expand their operations.

 

EUCCC President Joerg Wuttke said, “In the age full of economic challenges, European companies are in need of a signpost to cope with challenges in continuous investment in China.” The effective results of the negotiations for the EU-China Bilateral Investment Treaty can undoubtedly improve the business environment and reduce restrictions on the market access. 

 

 “Although China’s economic growth has slowed and shows a L-shaped trend, it can maintain a high-quality growth for 20 to 30 years with the constrain of the overcapacity and enhancement of the supply-side reform and innovation,” Charles-Edouard Bouée, CEO of Roland Berger GmbH, added, “Solving these difficulties and challenges set forth in the Business Confidence Survey,  China can ensure final growth and European companies will make contributions in this process.”

 

According to Alberto Vettoretti, chairman of European Union Chamber of Commerce South China Chapter, EU has about 1,800 enterprises in China, which invested about EURO9.3 billion in China. And about 300 of them are located in Guangdong Province, and more than 80 representative enterprises attended the survey. The survey results show that the EU companies in Guangdong have a relatively better evaluation to the business environment of Guangdong. Shenzhen enjoys the highest satisfaction degree of all cities in Guangdong on the business environment, followed by Guangzhou and Foshan.

 

What is noteworthy is that the top commercial challenges faced by companies in China have changed somehow in this year’s survey. Joerg Wuttke said that corruption and intellectual property challenges have fallen out of the Top 5 (the Top 5 challenges are Chinese economic slowdown, rising labor costs, global economic slowdown, market access barriers and investment restrictions and RMB volatility). He praised that in recent years China had made fruitful works in the corruption crackdown and many EU companies in China said the Chinese government’s anti-corruption efforts are beyond their anticipation, and removed many barriers for their operations in China.