NOS News•today, 7:42 PM
China is no longer one of the darlings of European business. For years, the country was considered a top country to invest in for companies from the European Union. But a report from the European Union Chamber of Commerce in China shows that this investment drive is waning.
Every year, the Chamber of Commerce questions a few hundred large European companies about their plans with China. This year, 13 percent say they have no investments in the pipeline and do not plan to make any in the future. That percentage has never been so high in the twelve years that the House has been investigating this.
Geopolitics
The share of companies that still want to invest money in the Chinese market is also low. Only 15 percent now name China as the top destination for their capital. In the best years, one in three companies would rather invest money nowhere than there.
ICT companies in particular are becoming less and less sympathetic to China. More than a fifth indicate that they no longer have investment plans due to geopolitical tensions, stricter data security regulations and China’s drive to become more self-sufficient in technology.
In addition, the Chinese economy is simply not doing well. Contrary to expectations, the economy did not pick up strongly again after the corona pandemic. Companies see this economic dip as the biggest challenge. But the geopolitical tension between the US and China and more regional tensions, which are not explicitly mentioned in the report, also make China less attractive.
Who benefits?
Some European companies even indicate that they are already relocating investments. Instead of setting up a new factory or department in China, a company sets it up in another country.
Southeast Asian countries such as Indonesia or Vietnam in particular benefit from the shift. But a significant portion of companies are also choosing Europe itself as an alternative destination for the money that was intended for China.
The movement is not just a European thing, according to the companies surveyed. More than a quarter also see Chinese suppliers and customers shifting their investments abroad.
Dutch investments
Dutch investments in China were not very large and had previously decreased. A study by the Central Planning Bureau (CPB) showed two years ago that the value of those investments decreased from 16.1 billion euros to 12.7 billion euros between 2015 and 2018.
China was therefore in 26th place on the list of most popular investment destinations for Dutch companies.
