“Disturbing Trend”: the EU enterprises in China’s fight against downturn

European companies in China have normalized their operation to a great extent, but are struggling with the economic downturn, by the Corona-crisis and the trade war with the United States.

In addition, large Chinese state-owned enterprises are on the rise again and the crowding out of foreign and private companies, such as the Wednesday in Beijing, presented to the annual survey by the European chamber of Commerce in China, the business climate is clear.

“China’s market is moving in the direction of a “one economy, two systems”model”, – noted the Vice-President Charlotte Roule to a “worrying Trend”. On the one hand, there is a more open, equitable and well-regulated System, on the other hand, however, areas in which state-owned enterprises with “alarming speed” inheriting shares. The Chinese government support the enterprises in the crisis more on the state.

In the majority of EU companies, the economic downturn in China, which had suffered in the first quarter, a drop in Growth from 6.8 percent. Place two of the since two-year-old trade war of the USA with China. Headache, the decline of the global economy will prepare them furthermore, rising wage costs, and ambiguous provisions in China. Also, the growing pressure of competition by private companies or market players that do not adhere to the usual rules, was called.

Since China has been the outbreak of the lung disease largely under control, have returned to normal, the operation of the European company, in the meantime, “Essentially,” said Roule. But supply chains are interrupted, which was a Problem. Also the travel restrictions prepared for more major problems, because experts could hardly be to China brought. Out of fear of introduction of the Virus China awards there is currently no normal Entry permits for foreigners.

The survey of the business climate had already been in February, but the experts of the chamber of Commerce, described how the conclusions were adjusted by further surveys in the enterprises of the rapid development. Some Trends, particularly the rise of the state-owned enterprises, have stepped up even more, said Roule.

The following surveys of the German, Italian, Austrian, and French chambers of Commerce in China in March would have shown that two-thirds to three-quarters of the member companies expect this year as a result of Covid-19 a decline in revenue by more than ten percent.