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the world is still fighting the Corona virus. In Germany, companies are receiving Corona aid, but what does the pandemic mean for European companies in China? The latest survey by the EU Chamber of Commerce in Beijing shows something astonishing: no sign of a crisis. Even in the pandemic year 2020, companies in the People’s Republic earned more than expected. But the problems are increasing: difficult market access, unequal treatment and political influence. Chamber of Commerce President Jörg Wuttke laments another serious problem in an interview with China.Table: “The number of expats is downright plummeting.” Thus, many years of China experience are being lost, which may not be regained, Wuttke warns. But a look into the future also reveals something surprising: More than two-thirds of the respondents continue to expect positive sales developments in their industry and therefore want to invest more in China, reports Christiane Kühl.
Meanwhile, the origin of the Corona pandemic is still unclear. However, the suspicion that the pathogen could have originated in a laboratory in Wuhan persists. The fact that Beijing is doing little to clarify the situation will cause enormous political damage to the People’s Republic, analyses Marcel Grzanna. Claims for damages or a diplomatic boycott of the 2022 Winter Olympics would be just two possible consequences.
In addition to military and economic power, an influential world power also needs an internationally significant currency. So far, China lacks that. But Beijing is working flat out on a revolution in the financial sector: through the e-yuan. China is well on its way to becoming the first major economy to introduce a state-owned digital currency. The first tests show how much Beijing is gaining control nationally as a result. But it is not to stop there. With the e-yuan, Beijing wants to challenge the dominance of the US dollar as the global reserve currency, analyses Frank Sieren.
I wish you many new insights while reading
Michael Radunski
Feature
New EU Chamber of Commerce survey: no sign of crisis
Business is unexpectedly good. But after dark Covid 19 times, there are “storms on the horizon” that require companies to adjust their strategy. This is how the EU Chamber of Commerce in China (EUCCC) sums up the findings of its member survey presented today, Tuesday. With the world still reeling from the pandemic, the relatively optimistic business expectations-while complaining about old and new problems-are exceedingly surprising: 68 percent of respondents expect positive developments in their industry, up from 45 percent in the pre-Corona year of 2019. The last time companies were this optimistic was in 2014.
This may be due to the fact that business in the Covid year 2020 went better than the companies expected. At the beginning of 2020, half of the companies had expected sales to fall, and only one in two hundred had expected a plus. But in fact, 42 percent reported rising revenues, especially those in the consumer sector. “This was mainly thanks to Chinese customers who, unable to travel, spent a greater proportion of their disposable income on buying cars, cosmetics and clothes,” the Chamber of Commerce survey says. Only a quarter reported declining revenues, especially in industries directly hit by the pandemic, such as travel. Profits also remained surprisingly stable: 73 percent had positive earnings before interest and taxes (EBIT) – roughly the same level as in the past five years.
Still many unresolved Problems
Meanwhile, the list of concerns is long, as always. For 73 percent, the ongoing Corona travel restrictions are a major concern. 45 percent said they are losing business due to direct and indirect market access restrictions – a figure that has remained constant for years. 44 percent report unequal treatment in areas such as government contracts, licensing and access to subsidies. 46 percent of respondents expect regulatory barriers to increase in China over the next five years. And 41 percent complained about an increasing politicization of business life – for example, due to the conflict over the Xinjiang sanctions.
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