European firms less keen on doing business in China | Business| Economy and finance news from a German perspective | DW | 10.06.2015
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European firms less keen on doing business in China

Fewer companies in Europe plan to expand in China, according to a lobby group survey. A slowdown in China's economy and what is perceived as unfavorable treatment are cited as reasons for their pessimism.

A mere 55 percent of respondents in the latest survey by the European Chambers of Commerce said they are planning to expand their operations in China this year, down from 86 percent two years ago. Nearly two-thirds plan to lay off staff to cut costs.

Just 28 percent said they were "optimistic" about their profitability in the country, an all-time low according to the Chamber.

"European companies fortunately know how to deal with difficulties," Jörg Wuttke, Chamber president, told the AFP news agency. "But the longer the companies are here in China, the less optimistic they are."

More than half of the 541 companies polled said foreign companies faced discrimination. Nearly two-thirds of companies surveyed this year said an "unpredictable legal environment" was an obstacle to business, according to the survey.

Over the past year, China has launched anti-monopoly probes against a number of high-profile foreign firms, drawing accusations of double standards as domestic players are allowed to dominate some markets.

Slow Internet connections and online censorship were also hindering business, the survey found.

Firms are also concerned about a slowdown in the Chinese economy. Growth came in at just 7.4 percent in 2014, the weakest annual figure in 24 years.

But firms are far from leaving China in droves. "The optimism is shrinking but the optimism is still there," Wuttke told AFP. "We don't see European companies leaving China," he added. In an interview with DPA news agency, Wuttke said, "There is no way around China, but it is no longer the only investment destination."

ng/uhe (dpa, AFP)

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