BRUSSELS - Most Chinese companies operating in the European Union are feeling the pinch from the bloc’s de-risking strategy, but still see more opportunity than challenge in Europe’s green and digital transitions, according to a survey published on Tuesday.
The survey for the China Chamber of Commerce to the EU, conducted by consultants Roland Berger, gauged the views of 180 Chinese enterprises in the EU, including telecommunications and smartphone companies Huawei and ZTE, electric vehicle maker BYD, Cosco Shipping and China’s largest banks.
Their overall rating of the EU’s business environment fell for the fourth consecutive year, with views of the political landscape declining most steeply.
Some 72 per cent of respondents said their business operations had been negatively impacted by the EU’s de-risking strategy, particularly semiconductor and telecoms suppliers.
The strategy partly seeks to reduce EU dependence on China, especially for minerals and products required for its green and digital transitions.
China processes nearly 90 per cent of rare earth elements and 60 per cent of lithium globally, and has announced export restrictions for other key materials – gallium, germanium and graphite.
A number of Chinese companies felt the EU had become more unfair in terms of single-market access, import tariffs, public procurement opportunities, and scrutiny of investments. The EU is also looking into possible tariffs on Chinese electric vehicles.
However, despite these challenges, 83 per cent of respondent companies said they still had faith in the EU market and would continue to expand their presence.
On the EU’s transition to a greener and more digital economy, most companies expressed optimism that China-EU cooperation and technology collaboration would intensify in the coming years.
About 90 per cent replied that they saw more opportunities than challenges in green and digital fields.
The report also noted that bilateral trade was continuing to grow, reaching €857 billion (S$1.26 trillion) in 2022, making the EU and China each other’s second-largest trading partner.
The EU has said it wants a more balanced relationship with China and that its trade deficit of about €400 billion is partly due to Chinese restrictions on European companies, compared with an EU market that is largely open. REUTERS
