European firms in China doubt the Chinese government has a credible plan to boost demand in the ailing economy or would carry out long-promised reforms, diminishing their appetite to invest in the country, a European business lobby group said on Wednesday.
The EU Chamber of Commerce in China said in the latest edition of its Position Paper that many of its more than 1,700 member companies are now reconciling themselves to the fact that the problems they face might have become permanent features rather than “growing pains” of an emerging market.
“A tipping point has been reached, with investors now scrutinizing their China operations more closely as the challenges of doing business are beginning to outweigh the returns,” chamber president Jens Eskelund said at an event where the paper was released.
Photo: AP
“It has become so much harder to make money in the Chinese market,” he added.
Last year, EU foreign direct investment (FDI) flows to China dropped by 29 percent from the previous year to 6.4 billion euros (US$7.07 billion), European Commission data showed.
Meanwhile, profit margins in China have sunk for about two-thirds of its members to equal to or below the global average, the chamber said.
“With many other markets offering greater predictability and legal certainty along with the same return on investment, continuing to invest at previous levels in the China market is simply becoming harder to justify,” the chamber’s report read.
European firms must wrestle with Chinese competitors receiving unfair subsidies, a highly politicized business environment, Chinese President Xi Jinping’s (習近平) heightened focus on national security, and perennial market access and regulatory barriers, the chamber said.
However, the “central concern” was China’s economic slowdown.
After a dismal second quarter, Chinese policymakers signaled they were ready to deviate from their playbook of pouring funds into infrastructure, instead targeting fresh stimulus at households.
However, promise fatigue has become prevalent among European firms, and doubts over China’s commitment to reform are increasing, the chamber said.
Economists are still waiting for specific plans to reinvigorate the 1.4 billion-strong consumer market. The top decisionmaking body of the ruling Chinese Communist Party in July pledged that it would announce such plans and it recently rolled-out subsidized trade-in scheme for consumer goods.
The chamber said the trade-in program is unlikely to significantly increase domestic consumption as the amount budgeted for it works out to just about 210 yuan (US$29.53) per capita.
“The government needs to look at what can be done for China to regain its position as a top location for European FDI,” Eskelund said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
Teleperformance SE, the largest call-center operator in the world, is rolling out an artificial intelligence (AI) system that softens English-speaking Indian workers’ accents in real time in a move the company claims would make them more understandable. The technology, called accent translation, coupled with background noise cancelation, is being deployed in call centers in India, where workers provide customer support to some of Teleperformance’s international clients. The company provides outsourced customer support and content moderation to global companies including Apple Inc, ByteDance Ltd’s (字節跳動) TikTok and Samsung Electronics Co Ltd. “When you have an Indian agent on the line, sometimes it’s hard
PROBE CONTINUES: Those accused falsely represented that the chips would not be transferred to a person other than the authorized end users, court papers said Singapore charged three men with fraud in a case local media have linked to the movement of Nvidia’s advanced chips from the city-state to Chinese artificial intelligence (AI) firm DeepSeek (深度求索). The US is investigating if DeepSeek, the Chinese company whose AI model’s performance rocked the tech world in January, has been using US chips that are not allowed to be shipped to China, Reuters reported earlier. The Singapore case is part of a broader police investigation of 22 individuals and companies suspected of false representation, amid concerns that organized AI chip smuggling to China has been tracked out of nations such
RSS