47% of European businesses would expand business in China

Updated: 2016-06-07 18:54

By Chen Yingqun(chinadaily.com.cn)

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47% of European businesses would expand business in China

Representatives from European countries attends the 10th European Union-China Business and Technology Cooperation Fair. [Photo by Hu Qing/ chinadaily.com.cn]

About 47 percent of European businesses would expand business in China this year, and a clear majority would likely increase their investment if they see China's reforms in many sectors to be better implemented, says a survey released on June 7.

"Despite slowing and L-shaped growth, China's economy could be powered, for another two or three decades, on high-quality expansion by measures including further pruning overcapacity, supply side transformation and strengthening innovation," said Roland Berger CEO Charles-Édouard Bouée.

"Addressing these tasks and the challenges highlighted by the Business Confidence Survey will ensure both that all of this growth ultimately takes place. And that European businesses are able to make a major contribution towards attaining it," he says.

The European Chamber, in cooperation with Roland Berger, today, released its annual Business Confidence Survey 2016, which says that 41 percent of European companies are now re-evaluating their China operations and planning to cut costs through head count reduction. While 56 percent of respondents report that doing business in China has become more difficult, a five-point increase from 2015, 70 percent of respondents do not feel more welcome in China than they did 10 years ago, and 72 percent European companies' willing to invest in R&D in China , dropped from 85 percent in2015.

China has vowed to provide a more open and competitive market for foreign companies. However, the reports says European companies still think China's progress in reforms is not fast enough, which triggers some pessimism among them.

Xu Hongcai, director of the economic research department at the China Center for International Economic Exchanges says that China is undergoing an economic slowdown and an economic transformation.

"It is also tackling the problems of overcapacity, so European companies might need time to adapt to this situation, but they should see China is speeding up the process of reform and opening up," says Hu.

Moreover, Hu says there are still huge opportunities in China for Western companies.

"The key is for them to do more field researches in different regions and industries of China to find out the specific demands in different regions and industries and find opportunities for themselves. For example, in China's urbanization process and the development of green industries, Europe's technology, capital and management experiences are all greatly needed."

European Chamber President Joerg Wuttke says that the China-EU bilateral investment treaty, which is still undergoing negotiations, would be integral to improving the business environment and reducing market access barriers.

"European companies now need a road map. This will give them with the confidence they need to commit more to China's future development in these economically challenging times," Wuttke said.

The survey was based on response from 506 European companies in China, of which half of them are small and medium-sized companies.