European businessmen warned with concern that China’s economic recovery in 2023 has slowed as the year progressed, the annual report of the European Chamber of Commerce in the Asian giant revealed on Wednesday.
The lack of expected pent-up demand, which did not materialize as expected after the end of anti-pandemic policies, significantly affected manufacturing activity and prices in the country, according to the document.
Chamber President Jens Eskelund highlighted the uncertainty in the relationship China wants to maintain with foreign companies, citing the “ambiguity” between the focus on national security and self-reliance versus the commitment to reform and opening up.
This “confusion” has generated “additional challenges” for European companies operating in the Asian country. The report also addressed persistent economic problems in China, such as rising government debt and challenges in the real estate sector, which remain unresolved.
In turn, the report highlights that China’s demographic dividend “is declining,” and the urban youth unemployment rate has reached “record levels,” raising additional concerns about the country’s economic health.
The presentation of the report also pointed out the lack of transparency in economic data and the difficulties that foreign companies face in accessing reliable and complete information. Additionally, the trade imbalance between Europe and China was mentioned, as Chinese exports to Europe have increased significantly.
According to Eskelund, European exports to China amount to approximately 200 billion euros in goods, while the transfer in the opposite direction was more than 600 billion euros, which raises doubts about the sustainability of this situation.
In the midst of these challenges, European companies in China seek “clarity and stability” for their operations and remain alert to the evolution of the economic situation in the Asian country.