HONG KONG: China must reprioritise economic growth and reforms and boost investor confidence by levelling the playing field for all companies in the country, a European business group said Wednesday.
With “business confidence now at an all-time low” over lagging domestic demand and overcapacity in certain industries, the annual European Business in China Position Paper called on China to open its economy and allow a more free market to determine resource allocation. It also recommended introducing policies to boost domestic demand.
Profit margins in China are at or below the global average for two-thirds of the companies surveyed earlier in the year, according to the paper published Wednesday by the European Chamber of Commerce in China.
In August, China filed a complaint with the World Trade Organisation over European Union tariffs on electric vehicles made in China. It also launched anti-dumping and subsidies investigations of European dairy products, brandy and pork exports. The tit-for-tat actions have raised fears that a trade war may break out.
Many European businesses are deciding that the returns on investments in the world's second-largest economy are not worth the risks, due to issues including China's economic slowdown and a politicised business environment.
