European Interest in China Investments Wanes

China’s economy grew just 0.4 percent from a year earlier in the second quarter, an anemic rate that has made the Chinese market less attractive for foreign investment.

Joerg Wuttke, the chamber’s president, said that no new European company had entered the Chinese market since the start of the pandemic and that all but the largest European companies were losing interest.

“They don’t even want to consider China,” he said, adding that companies’ preferences are “clearly Southeast Asia, India and other parts of the world.”

On Tuesday, the Swedish Chamber of Commerce in China released a survey of its members that also found many of them pessimistic about the investment climate in China. The Swedish group’s members were concerned about stringent pandemic controls, including quarantines often of 11 nights for people arriving from overseas as well as other limits on international travel.

China’s willingness to buy imports, from luxury products to factory gear, is also slowing, the chamber said. China has sought to build more self-reliance through programs like “Made in China 2025,” which give preference to domestic manufacturing over imports.

Unlike the United States, Europe ran only small trade deficits with China before the pandemic. But China bought only $112 billion worth of European goods in the first half of this year, while exporting $302 billion. The widening imbalance has made European companies and countries more willing to raise concerns about Chinese policies.

Article source: https://www.nytimes.com/2022/09/20/business/europe-china-investment.html