Unequal market access, growing politicization and an uncertain to unpredictable business environment: such accusations sound familiar. However, this time they do not come from European companies in China, but from the sixth business climate report of the China Chamber of Commerce to the EU (CCCEU), which was presented on Monday.
The survey of 200 Chinese companies over the past four months paints a comparatively bleak picture for Chinese business interests in the EU. A foreseeable development, writes Marcel Grzanna: The growing perception of China as a rival also translates into a more critical economic policy. So far, the countervailing duties on electric cars from China have been the most obvious sign of this European cultural change.
However, companies are also optimistic in many areas. A two-thirds majority even believe the EU’s strategic importance for their company will grow in the next one to three years.
Beijing is not only facing major economic challenges in the EU. Even before the Central Economic Conference on Wednesday, the Politburo of the Chinese Communist Party announced substantial economic policy measures for 2025. For the first time since 2011, the government plans a “moderate easing” of monetary policy and a “more proactive” fiscal policy. The aim is to ensure the stability of the real estate and stock markets and strengthen domestic demand. However, there are also numerous risks to consider, first and foremost Trump’s tariff plans, as Jörn Petring reports.
In today’s opinion piece, Merics tech expert Antonia Hmaidi urges Germany to establish an independent digital ministry similar to the one in China. She argues that the German Ministry for Digital Affairs and Transport (BMDV) is too decentralized and too often gets bogged down in jurisdictions, which prevents the country from closing the gap to global leaders.
Chinese companies in the European Union feel the effects of the shifting approach to Beijing’s industrial policy. Where there was often great optimism in the past, uncertainty is spreading – companies are finding it increasingly difficult to predict how their business will develop. The hefty countervailing duties on electric cars from China are the clearest signal yet of a shift in European culture.
In this respect, the sixth business climate report from the China Chamber of Commerce to the EU (CCCEU) provides a comparatively bleak picture of Chinese business interests in the EU. The paper, which was published on Monday, emphasizes “uncertainty” as a decisive factor for Chinese companies operating in the EU. The Chamber refers to survey data collected among 200 Chinese companies over the past four months.
Around four out of five companies feel this growing uncertainty. They are concerned about a “growing politicization of commercial sectors” and urge the EU to “create a fair, transparent, and predictable market environment for foreign enterprises” – demands that are slowly but surely becoming similar in content to the demands of EU companies in China. Many European companies have been struggling for years with the growing frustration caused by the Chinese authorities.
According to the report, an atmosphere is developing in the EU that Chinese companies tend to view negatively. This comes as little surprise considering the political developments of recent years. The growing perception of China as a rival to the EU translates into a more critical economic policy. Over half of those surveyed stated they felt they were being treated differently by politicians. 64 percent feel that they are treated differently because of their Chinese origin.
The paper results from a collaboration between the CCCEU and the consulting agency Roland Berger. Its content serves Brussels as feedback for its own industrial policy, but must nevertheless be interpreted carefully. The CCCEU is much less capable of adopting a completely self-sufficient policy than the EU Chamber in Beijing.
The report aims to foster closer trade relations between China and the EU, commented CCCEU President Liu Jiandong, who also emphasized the strategic importance of Europe for Chinese companies. He said that each was the other’s second-largest trading partner and that, according to Eurostat, bilateral trade reached 740 billion euros in 2023. Liu also pointed out that these companies have built up research, design and production capacities in the EU and contribute to the EU’s tax revenue, as well as creating local jobs and innovation.
The report also emphasizes that the EU’s trade deficit with China has decreased by 27 percent compared to 2022. An improvement for the Europeans – that’s how the report puts it. It states that China exported cars worth 12.9 billion euros to the EU. Conversely, cars were also the EU’s largest export to China, worth 19.4 billion euros. “Leading to a trade surplus of 6.5 billion euros in favor of the EU,” the paper states.
The note combines two sensitive issues: The accusation that China’s highly subsidized car industry is dumping its overcapacity in the EU and that China is not doing enough to balance its trade with the Europeans. There is sufficient evidence to support both accusations. Most recently, the International Monetary Fund found that Beijing was artificially revising its trade surplus downwards to disguise the export of overcapacity.
What is remarkable are all the positive aspects the paper identifies despite growing uncertainty. 66 percent of respondents expect the EU’s strategic importance for their company to grow over the next one to three years. Over 40 percent plan to increase the size of their workforce in Europe and 30 percent intend to expand their business activities or open new branches in the EU.
The survey also shows that 55 percent of Chinese companies remain optimistic about the medium to long-term prospects for trade and economic relations between China and the EU, particularly in sectors such as green cooperation and digital transformation. Over half believe that increased cooperation between China and the EU could accelerate the digital transformation in the EU.
Shortly before the important Central Economic Conference this week, Beijing promised more stimulus for 2025. The Politburo of the Communist Party met on Monday to discuss plans for the coming year. The leadership’s explicit promises surprised many observers.
According to the meeting minutes, the 24-member committee chaired by Xi Jinping announced that it would aim for a “moderate easing” of monetary policy in 2025. This is the first significant change since 2011. The committee also chose stronger wording regarding fiscal policy and announced it would be “more proactive.” In addition, the stability of the real estate and stock markets is to be ensured.
“The wording in this Politburo meeting statement is unprecedented,” Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group, told Bloomberg. Xi and his leadership will likely set the tone for the Central Economic Conference, which will be closely observed this week. Hundreds of senior officials will attend, including ministers, the head of the central bank, provincial governors and executives from state-owned financial and industrial corporations.
Many different interests have to be coordinated. The meeting, which usually lasts two days, is more important for economic policy than the National People’s Congress in March. Although the growth target and other marks are announced there with much pomp, the real work is already underway. Although the conference communiqué, which according to media reports is due to begin on Wednesday, does not usually contain any concrete figures. But the tone will provide important clues.
“Observers will be watching to see if there’s any shift in tone in fiscal and monetary policy,” writes ING Bank in an outlook. They will also follow which economic sectors are prioritized. It will be particularly interesting to see if any additional measures are hinted at for domestic demand or the real estate market. “The markets would be satisfied with a shift to signal more aggressive policy support but may be disappointed if the release offers little new content.” The Politburo meeting on Monday already made it clear in which direction things are headed.
Back in September, the government presented an economic stimulus package to stabilize the economy. It included measures such as lowering the minimum reserve ratio for banks and mortgage interest rates as well as aid for the real estate and financial markets. However, there has been criticism of the lack of significant fiscal incentives, in particular direct aid for households, which could boost consumption.
It is becoming increasingly clear that Beijing was in no hurry to put all the cards on the table. It first waited for the outcome of the US election. “The conference will most likely discuss the possible consequences of US tariff increases and make initial plans,” Wang Tao, an economist at UBS, told the South China Morning Post. Concrete reactions to tariffs, however, are unlikely to be made until after an official announcement.
Should Trump’s new tariffs put exports under severe pressure, Beijing would have little choice but to boost domestic demand. Ding Shuang, chief economist for Greater China at Standard Chartered Bank, therefore believes that Beijing will place greater emphasis on fiscal policy in order to stimulate consumption. However, inflated market expectations could still lead to disappointment once the conference results are announced.
Beijing had already sent out another strong signal last week. The central bank’s policy advisor, Wang Yiming, and the state-owned Bank of China proposed maintaining the annual growth target of around five percent for 2025. This would be difficult to achieve without strong measures to stimulate the economy. Central baBankovernor Pan Gongsheng also promised a “supportive” monetary policy.
In order to catch up, Germany needs clear jurisdictions and must make digitalization a priority. Establishing an upgraded Federal Ministry for Digital Affairs would allow Germany to digitally modernize itself and survive in the new, digital world.
To date, digitalization has only been organized decentrally at the ministerial level. If the focus is on cybersecurity, then the Ministry of the Interior is responsible. When it comes to cyber diplomacy and international organizations, this falls under the remit of the Federal Foreign Office. However, when it comes to bilateral cooperation on digital issues, it is the responsibility of the Federal Ministry for Digital and Transport (BMDV). Unless it falls under digital development policy – then the Federal Ministry for Development Cooperation (BMZ) is responsible.
This opaque and complex maze of jurisdictions was actually supposed to be resolved in 2021 by creating a Federal Ministry for Digital Affairs. However, the newly created Federal Ministry for Digital and Transport only deals with digital matters in two of its six thematic units. Although digitalization is now considered a priority in all policy areas in Germany, this importance is not yet reflected in the competence center of a well-thought-out ministry structure.
In contrast, China has had a Central Cyberspace Affairs Commission since 2018. Its executive arm, the Cyberspace Administration of China, is responsible for legislation in the digital space, including the regulation of artificial intelligence and responsibility for data security. It can penalize companies under cybersecurity laws and has its own investment arm that holds golden shares in companies.
The highest party commissions in China are the main decision-making bodies. This alone shows how important digitalization is for the People’s Republic. The Central Cyberspace Affairs Commission ranks on the same level as the Military Commission, the Foreign Affairs Commission and, since 2022, the Science and Technology Commission.
The bundling of digital matters in the Cyberspace Administration of China has resulted in much success in digitalization. While Germany was still discussing the digitalization of the administration to process online applications, China has created structures. The result is remarkable: China is now a global leader in e-government and smart cities. In 2023, 92.5 percent of permits at the local level (e.g., for marriages) could be applied for online.
Meanwhile, China continues to deepen its role in international standardization forums. The aim behind this is to make human rights less important and to conduct standardization debates in multilateral bodies such as the UN, where non-state actors such as civil society hardly play a role. China is trying to shape standards in such a way that digital technologies can be used for repressive purposes.
China is also expanding its bilateral partnerships. China-centric initiatives such as the Global Data Security Initiative and the export of Chinese digital products under the Digital Silk Road round off China’s digital range, particularly for developing countries.
Germany and Europe want to offer an international alternative to the digital Silk Road and act as a counterweight to China in standardization processes. However, in order to present a credible and well-equipped alternative, Germany first needs to digitize itself extensively.
In Germany, where digitalization has only been making slow progress so far, a genuine digital ministry would be an opportunity to break down entrenched and limited silo thinking and boost progress. However, it is not enough to simply write “digital” in the name of a new ministry; a digital ministry would also need to be equipped with the appropriate competencies to take on a coordinating role.
It would have to be able to lead regular consultations on digital issues with other ministries, even independently of planned draft legislation. To achieve technically meaningful and effective results, there would have to be technical expertise in addition to ubiquitous legal competence. In order to better assess the risks of digital technology and make quick, qualified decisions, the Ministry of Digital Affairs should also coordinate the risk management of digital technologies.
It will be essential to avoid the mistakes that other countries have made. For example, China has exaggerated the importance of digitization to such an extent that every ministry wants to do as much digitization as possible without examining its usefulness in every case. Furthermore, in their eagerness to digitize as much as possible as quickly as possible, many authorities have neglected cybersecurity. For instance, the Shanghai police database was put up for sale on the internet.
A positive example of a new approach to digitalization can be seen in the UK, which established a new Department for Science, Innovation and Technology (DSIT) in 2023. This ministry has taken over some of the responsibility for innovation from the Department for Business and the responsibility for digital from the Department for Culture, Media and Sport. From the outset, the new ministry had responsibility for international digital negotiations, such as standards on the internet or innovation and cybersecurity of digital products.
If Germany is to play a more important international role in digital matters, it must rethink the international component of digitalization in particular. The Digital Minister should therefore be equally involved in the National Security Council as the other relevant ministries. In addition, key embassies should have digital advisors who are seconded by the Digital Ministry, as the Federal Ministry of Education and Research already does today.
With these initial measures, Germany could improve its expertise in digitalization and be more successful on the international stage. Digital technologies are now the fundamental prerequisites for progress. By establishing a genuine Federal Ministry for Digital Affairs, the German government would have the opportunity to make an important contribution to maintaining Germany’s strong reputation for innovation, quality and productivity and thus compete with China in the digital sector.
Antonia Hmaidi works on the geopolitics of technology, China’s pursuit of tech self-reliance, China’s cybersecurity and hacking campaigns. She gained experience as a project manager at the Bertelsmann Stiftung, worked at the German Corporation for International Cooperation (GIZ), as a journalist in Asia and at the German Institute for International and Security Affairs (SWP).
Editorial note: Now more than ever, discussing China means controversial debates. At China.Table we aim to reflect the diversity of opinions to give you an insight into the breadth of the debate. Opinions do not reflect the views of the editorial team.
Unequal market access, growing politicization and an uncertain to unpredictable business environment: such accusations sound familiar. However, this time they do not come from European companies in China, but from the sixth business climate report of the China Chamber of Commerce to the EU (CCCEU), which was presented on Monday.
The survey of 200 Chinese companies over the past four months paints a comparatively bleak picture for Chinese business interests in the EU. A foreseeable development, writes Marcel Grzanna: The growing perception of China as a rival also translates into a more critical economic policy. So far, the countervailing duties on electric cars from China have been the most obvious sign of this European cultural change.
However, companies are also optimistic in many areas. A two-thirds majority even believe the EU’s strategic importance for their company will grow in the next one to three years.
Beijing is not only facing major economic challenges in the EU. Even before the Central Economic Conference on Wednesday, the Politburo of the Chinese Communist Party announced substantial economic policy measures for 2025. For the first time since 2011, the government plans a “moderate easing” of monetary policy and a “more proactive” fiscal policy. The aim is to ensure the stability of the real estate and stock markets and strengthen domestic demand. However, there are also numerous risks to consider, first and foremost Trump’s tariff plans, as Jörn Petring reports.
In today’s opinion piece, Merics tech expert Antonia Hmaidi urges Germany to establish an independent digital ministry similar to the one in China. She argues that the German Ministry for Digital Affairs and Transport (BMDV) is too decentralized and too often gets bogged down in jurisdictions, which prevents the country from closing the gap to global leaders.
Chinese companies in the European Union feel the effects of the shifting approach to Beijing’s industrial policy. Where there was often great optimism in the past, uncertainty is spreading – companies are finding it increasingly difficult to predict how their business will develop. The hefty countervailing duties on electric cars from China are the clearest signal yet of a shift in European culture.
In this respect, the sixth business climate report from the China Chamber of Commerce to the EU (CCCEU) provides a comparatively bleak picture of Chinese business interests in the EU. The paper, which was published on Monday, emphasizes “uncertainty” as a decisive factor for Chinese companies operating in the EU. The Chamber refers to survey data collected among 200 Chinese companies over the past four months.
Around four out of five companies feel this growing uncertainty. They are concerned about a “growing politicization of commercial sectors” and urge the EU to “create a fair, transparent, and predictable market environment for foreign enterprises” – demands that are slowly but surely becoming similar in content to the demands of EU companies in China. Many European companies have been struggling for years with the growing frustration caused by the Chinese authorities.
According to the report, an atmosphere is developing in the EU that Chinese companies tend to view negatively. This comes as little surprise considering the political developments of recent years. The growing perception of China as a rival to the EU translates into a more critical economic policy. Over half of those surveyed stated they felt they were being treated differently by politicians. 64 percent feel that they are treated differently because of their Chinese origin.
The paper results from a collaboration between the CCCEU and the consulting agency Roland Berger. Its content serves Brussels as feedback for its own industrial policy, but must nevertheless be interpreted carefully. The CCCEU is much less capable of adopting a completely self-sufficient policy than the EU Chamber in Beijing.
The report aims to foster closer trade relations between China and the EU, commented CCCEU President Liu Jiandong, who also emphasized the strategic importance of Europe for Chinese companies. He said that each was the other’s second-largest trading partner and that, according to Eurostat, bilateral trade reached 740 billion euros in 2023. Liu also pointed out that these companies have built up research, design and production capacities in the EU and contribute to the EU’s tax revenue, as well as creating local jobs and innovation.
The report also emphasizes that the EU’s trade deficit with China has decreased by 27 percent compared to 2022. An improvement for the Europeans – that’s how the report puts it. It states that China exported cars worth 12.9 billion euros to the EU. Conversely, cars were also the EU’s largest export to China, worth 19.4 billion euros. “Leading to a trade surplus of 6.5 billion euros in favor of the EU,” the paper states.
The note combines two sensitive issues: The accusation that China’s highly subsidized car industry is dumping its overcapacity in the EU and that China is not doing enough to balance its trade with the Europeans. There is sufficient evidence to support both accusations. Most recently, the International Monetary Fund found that Beijing was artificially revising its trade surplus downwards to disguise the export of overcapacity.
What is remarkable are all the positive aspects the paper identifies despite growing uncertainty. 66 percent of respondents expect the EU’s strategic importance for their company to grow over the next one to three years. Over 40 percent plan to increase the size of their workforce in Europe and 30 percent intend to expand their business activities or open new branches in the EU.
The survey also shows that 55 percent of Chinese companies remain optimistic about the medium to long-term prospects for trade and economic relations between China and the EU, particularly in sectors such as green cooperation and digital transformation. Over half believe that increased cooperation between China and the EU could accelerate the digital transformation in the EU.
Shortly before the important Central Economic Conference this week, Beijing promised more stimulus for 2025. The Politburo of the Communist Party met on Monday to discuss plans for the coming year. The leadership’s explicit promises surprised many observers.
According to the meeting minutes, the 24-member committee chaired by Xi Jinping announced that it would aim for a “moderate easing” of monetary policy in 2025. This is the first significant change since 2011. The committee also chose stronger wording regarding fiscal policy and announced it would be “more proactive.” In addition, the stability of the real estate and stock markets is to be ensured.
“The wording in this Politburo meeting statement is unprecedented,” Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group, told Bloomberg. Xi and his leadership will likely set the tone for the Central Economic Conference, which will be closely observed this week. Hundreds of senior officials will attend, including ministers, the head of the central bank, provincial governors and executives from state-owned financial and industrial corporations.
Many different interests have to be coordinated. The meeting, which usually lasts two days, is more important for economic policy than the National People’s Congress in March. Although the growth target and other marks are announced there with much pomp, the real work is already underway. Although the conference communiqué, which according to media reports is due to begin on Wednesday, does not usually contain any concrete figures. But the tone will provide important clues.
“Observers will be watching to see if there’s any shift in tone in fiscal and monetary policy,” writes ING Bank in an outlook. They will also follow which economic sectors are prioritized. It will be particularly interesting to see if any additional measures are hinted at for domestic demand or the real estate market. “The markets would be satisfied with a shift to signal more aggressive policy support but may be disappointed if the release offers little new content.” The Politburo meeting on Monday already made it clear in which direction things are headed.
Back in September, the government presented an economic stimulus package to stabilize the economy. It included measures such as lowering the minimum reserve ratio for banks and mortgage interest rates as well as aid for the real estate and financial markets. However, there has been criticism of the lack of significant fiscal incentives, in particular direct aid for households, which could boost consumption.
It is becoming increasingly clear that Beijing was in no hurry to put all the cards on the table. It first waited for the outcome of the US election. “The conference will most likely discuss the possible consequences of US tariff increases and make initial plans,” Wang Tao, an economist at UBS, told the South China Morning Post. Concrete reactions to tariffs, however, are unlikely to be made until after an official announcement.
Should Trump’s new tariffs put exports under severe pressure, Beijing would have little choice but to boost domestic demand. Ding Shuang, chief economist for Greater China at Standard Chartered Bank, therefore believes that Beijing will place greater emphasis on fiscal policy in order to stimulate consumption. However, inflated market expectations could still lead to disappointment once the conference results are announced.
Beijing had already sent out another strong signal last week. The central bank’s policy advisor, Wang Yiming, and the state-owned Bank of China proposed maintaining the annual growth target of around five percent for 2025. This would be difficult to achieve without strong measures to stimulate the economy. Central baBankovernor Pan Gongsheng also promised a “supportive” monetary policy.
In order to catch up, Germany needs clear jurisdictions and must make digitalization a priority. Establishing an upgraded Federal Ministry for Digital Affairs would allow Germany to digitally modernize itself and survive in the new, digital world.
To date, digitalization has only been organized decentrally at the ministerial level. If the focus is on cybersecurity, then the Ministry of the Interior is responsible. When it comes to cyber diplomacy and international organizations, this falls under the remit of the Federal Foreign Office. However, when it comes to bilateral cooperation on digital issues, it is the responsibility of the Federal Ministry for Digital and Transport (BMDV). Unless it falls under digital development policy – then the Federal Ministry for Development Cooperation (BMZ) is responsible.
This opaque and complex maze of jurisdictions was actually supposed to be resolved in 2021 by creating a Federal Ministry for Digital Affairs. However, the newly created Federal Ministry for Digital and Transport only deals with digital matters in two of its six thematic units. Although digitalization is now considered a priority in all policy areas in Germany, this importance is not yet reflected in the competence center of a well-thought-out ministry structure.
In contrast, China has had a Central Cyberspace Affairs Commission since 2018. Its executive arm, the Cyberspace Administration of China, is responsible for legislation in the digital space, including the regulation of artificial intelligence and responsibility for data security. It can penalize companies under cybersecurity laws and has its own investment arm that holds golden shares in companies.
The highest party commissions in China are the main decision-making bodies. This alone shows how important digitalization is for the People’s Republic. The Central Cyberspace Affairs Commission ranks on the same level as the Military Commission, the Foreign Affairs Commission and, since 2022, the Science and Technology Commission.
The bundling of digital matters in the Cyberspace Administration of China has resulted in much success in digitalization. While Germany was still discussing the digitalization of the administration to process online applications, China has created structures. The result is remarkable: China is now a global leader in e-government and smart cities. In 2023, 92.5 percent of permits at the local level (e.g., for marriages) could be applied for online.
Meanwhile, China continues to deepen its role in international standardization forums. The aim behind this is to make human rights less important and to conduct standardization debates in multilateral bodies such as the UN, where non-state actors such as civil society hardly play a role. China is trying to shape standards in such a way that digital technologies can be used for repressive purposes.
China is also expanding its bilateral partnerships. China-centric initiatives such as the Global Data Security Initiative and the export of Chinese digital products under the Digital Silk Road round off China’s digital range, particularly for developing countries.
Germany and Europe want to offer an international alternative to the digital Silk Road and act as a counterweight to China in standardization processes. However, in order to present a credible and well-equipped alternative, Germany first needs to digitize itself extensively.
In Germany, where digitalization has only been making slow progress so far, a genuine digital ministry would be an opportunity to break down entrenched and limited silo thinking and boost progress. However, it is not enough to simply write “digital” in the name of a new ministry; a digital ministry would also need to be equipped with the appropriate competencies to take on a coordinating role.
It would have to be able to lead regular consultations on digital issues with other ministries, even independently of planned draft legislation. To achieve technically meaningful and effective results, there would have to be technical expertise in addition to ubiquitous legal competence. In order to better assess the risks of digital technology and make quick, qualified decisions, the Ministry of Digital Affairs should also coordinate the risk management of digital technologies.
It will be essential to avoid the mistakes that other countries have made. For example, China has exaggerated the importance of digitization to such an extent that every ministry wants to do as much digitization as possible without examining its usefulness in every case. Furthermore, in their eagerness to digitize as much as possible as quickly as possible, many authorities have neglected cybersecurity. For instance, the Shanghai police database was put up for sale on the internet.
A positive example of a new approach to digitalization can be seen in the UK, which established a new Department for Science, Innovation and Technology (DSIT) in 2023. This ministry has taken over some of the responsibility for innovation from the Department for Business and the responsibility for digital from the Department for Culture, Media and Sport. From the outset, the new ministry had responsibility for international digital negotiations, such as standards on the internet or innovation and cybersecurity of digital products.
If Germany is to play a more important international role in digital matters, it must rethink the international component of digitalization in particular. The Digital Minister should therefore be equally involved in the National Security Council as the other relevant ministries. In addition, key embassies should have digital advisors who are seconded by the Digital Ministry, as the Federal Ministry of Education and Research already does today.
With these initial measures, Germany could improve its expertise in digitalization and be more successful on the international stage. Digital technologies are now the fundamental prerequisites for progress. By establishing a genuine Federal Ministry for Digital Affairs, the German government would have the opportunity to make an important contribution to maintaining Germany’s strong reputation for innovation, quality and productivity and thus compete with China in the digital sector.
Antonia Hmaidi works on the geopolitics of technology, China’s pursuit of tech self-reliance, China’s cybersecurity and hacking campaigns. She gained experience as a project manager at the Bertelsmann Stiftung, worked at the German Corporation for International Cooperation (GIZ), as a journalist in Asia and at the German Institute for International and Security Affairs (SWP).
Editorial note: Now more than ever, discussing China means controversial debates. At China.Table we aim to reflect the diversity of opinions to give you an insight into the breadth of the debate. Opinions do not reflect the views of the editorial team.
