CHINA's focus on Covid-zero at the expense of economic priorities is making the country less appealing to European companies as a place to invest, said the European Union Chamber of Commerce in China, which called on Beijing to refocus on reform, reports Bloomberg.
Recent Chinese policy decisions mean the country is now seen as 'less predictable, less reliable and less efficient', according to the report published the EU Chamber. 'This has led to a loss of confidence in China and firms are increasingly looking to shift planned or future investments to other markets that are seen as providing 'greater reliability and predictability,' the paper said.
'Business people are here for the market and we can see that because of ideology the market is shrinking,' said chamber president Joerg Wuttke. 'Ideology trumps the economy,' he said, referring to examples such as the dogged pursuit of controlling all Covid infections despite the rising cost, the crackdown on the tech sector, or power shortages last year driven by prioritising emissions control over economic activity.
European investment in China is growing more concentrated with a handful of large firms particularly from Germany doubling down on their bets while virtually no new players seek to enter the market, according to a new report by research organisation Rhodium Group, reports Reuters.
The three big German automakers - Volkswagen, BMW and Daimler - as well as chemicals group BASF, accounted for a third of all European investment into China from 2018 to 2021, according to the report.
Germany as a whole, where former Chancellor Angela Merkel actively encouraged and aided companies to enter the Chinese market, accounted for 43 per cent of foreign direct investment (FDI) over those four years, compared with 34 per cent in the previous decade.
SeaNews Turkey
Recent Chinese policy decisions mean the country is now seen as 'less predictable, less reliable and less efficient', according to the report published the EU Chamber. 'This has led to a loss of confidence in China and firms are increasingly looking to shift planned or future investments to other markets that are seen as providing 'greater reliability and predictability,' the paper said.
'Business people are here for the market and we can see that because of ideology the market is shrinking,' said chamber president Joerg Wuttke. 'Ideology trumps the economy,' he said, referring to examples such as the dogged pursuit of controlling all Covid infections despite the rising cost, the crackdown on the tech sector, or power shortages last year driven by prioritising emissions control over economic activity.
European investment in China is growing more concentrated with a handful of large firms particularly from Germany doubling down on their bets while virtually no new players seek to enter the market, according to a new report by research organisation Rhodium Group, reports Reuters.
The three big German automakers - Volkswagen, BMW and Daimler - as well as chemicals group BASF, accounted for a third of all European investment into China from 2018 to 2021, according to the report.
Germany as a whole, where former Chancellor Angela Merkel actively encouraged and aided companies to enter the Chinese market, accounted for 43 per cent of foreign direct investment (FDI) over those four years, compared with 34 per cent in the previous decade.
SeaNews Turkey