In Hong Kong, a European business group emphasized the need for China to prioritize economic growth and reforms more effectively to enhance investor confidence. The group suggested that to boost the economy and increase business confidence, China should create a level playing field for all companies within the country. The European Business in China Position Paper underscored the necessity of opening up the economy and allowing a freer market to determine resource allocation, as well as implementing policies that can stimulate domestic demand.

The paper revealed that the profit margins of two-thirds of companies surveyed in China were at or below the global average. The European Chamber of Commerce in China published this data highlighting the challenges faced by businesses in the country.

Recently, China lodged a complaint with the World Trade Organization regarding European Union tariffs on Chinese-made electric vehicles. Additionally, China initiated investigations into European dairy products, brandy, and pork exports concerning anti-dumping and subsidies. These actions have sparked concerns about a potential trade war.

European businesses are increasingly cautious about investing in China due to factors such as the country’s economic slowdown and a politicized business environment. The paper indicated a growing trend where the risks associated with investing in China are outweighing the potential returns.

The President of China’s European Union Chamber of Commerce, Jens Eskelund, highlighted in the paper that if key business concerns are not addressed promptly, the trend of diminishing returns compared to risks will intensify.

The European Chamber’s report provided over 1,000 recommendations for China to address challenges faced by European businesses in the country and to enhance investor confidence. Recommendations included urging China not to penalize companies for their home governments’ actions, ensuring the application of policies to attract foreign investment, and avoiding sudden policy shifts.

Additionally, the report encouraged the EU to engage proactively with China and maintain measured and proportionate responses during disagreements. This collaborative approach aims to foster more stable and productive economic relations between the involved parties.