Nearly a quarter of European companies in China are considering shifting their investments out of the country as COVID-19 outbreaks and lockdowns dim the outlook for the world’s second-largest economy, a survey showed.
About 23 percent of the businesses that responded to the survey are thinking of moving their current or planned investments away from China, a report released yesterday by the EU Chamber of Commerce in China said.
The survey was conducted at the end of April, when Shanghai was still in shut down and restrictions in places like Jilin Province disrupted business activity.
Photo: AFP
The number of European firms reassessing their options in China was the highest proportion in a decade, and also more than double the 11 percent recorded in a February poll, the chamber said, adding that 372 businesses responded to the April poll, whereas 620 responded to the February one.
China’s current policy — with no exit strategy for its zero tolerance approach to combating infections — “leaves headquarters no option but to look for other locations,” chamber vice president Bettina Schoen-Behanzin said. “The world does not wait for China.”
Of the firms considering a shift in investment, 16 percent said they were looking at relocating to Southeast Asia, while 18 percent said they were looking elsewhere in the Asia-Pacific region, 19 percent said Europe, 12 percent said North America and 11 percent said South Asia.
It is not clear when the property and the automotive sectors — two major drivers of the economy — would recover, Schoen-Behanzin said, adding that European businesses are re-evaluating their position in the market as they wait to see how long the uncertainty lasts.
HANDOVER POLICY: Approving the probe means that the new US administration of Donald Trump is likely to have the option to impose trade restrictions on China US President Joe Biden’s administration is set to initiate a trade investigation into Chinese semiconductors in the coming days as part of a push to reduce reliance on a technology that US officials believe poses national security risks. The probe could result in tariffs or other measures to restrict imports on older-model semiconductors and the products containing them, including medical devices, vehicles, smartphones and weaponry, people familiar with the matter said. The investigation examining so-called foundational chips could take months to conclude, meaning that any reaction to the findings would be left to the discretion of US president-elect Donald Trump’s incoming team. Biden
INVESTMENT: Jun Seki, chief strategy officer for Hon Hai’s EV arm, and his team are currently in talks in France with Renault, Nissan’s 36 percent shareholder Hon Hai Precision Industry Co (鴻海精密), the iPhone maker known as Foxconn Technology Group (富士康科技集團) internationally, is in talks with Nissan Motor Co’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, the Central News Agency (CNA) said, citing people it did not identify. Nissan and fellow Japanese automaker, Honda Motor Co, are exploring a merger that would create a rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world, people familiar with the matter said on Wednesday. However, one potential spanner in the works is
HON HAI LURKS: The ‘Nikkei’ reported that Foxconn’s interest in Nissan accelerated the Honda-merger effort out of fears it might be taken over by the Taiwanese firm Nissan Motor Co has become the latest buyout target in Japan as it explores a merger with Honda Motor Co and faces an overture from Hon Hai Precision Industry Co (鴻海精密), known as Foxconn Technology Group (富士康科技集團) internationally. Shares in Nissan yesterday jumped 24 percent, the most on record, to hit the daily limit, after the two Japanese automakers acknowledged that talks are ongoing to better position themselves for competitive challenges during a time of upheaval in the global auto industry. Foxconn — a Taipei-based manufacturer of iPhones, which has been investing heavily in factories to build electric vehicles — has also
CHIP SUBSIDY: The US funding would help alleviate the financial pressure from building two fabs in the US and should lift gross margins in 2026, the company said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said it is to receive US$406 million in subsidies from the US Department of Commerce for two new US fabs under the CHIPS and Science Act, with the first batch of the funds likely coming next year. The grant represents 10 percent of the planned investments of US$4 billion in advanced semiconductor wafer manufacturing facilities in Texas and Missouri, GlobalWafers said. The commerce department is to disburse the funds based on the completion of project milestones over a multiyear timeframe, the company said. Along with the tax credit, which is equal to
RSS