China ShortCuts: Recent Episodes
The European Union Chamber of Commerce in China
European Chamber’s China ShortCuts is a five-minute weekly catch-up about the Chinese business landscape. Tune in every Wednesday for the latest economic data, market trends, and policy and regulatory updates.
This episode contains segments on:
- China’s July 2026 manufacturing and non-manufacturing PMI data
- The RatingDog July 2026 China General Manufacturing PMI
- China’s July 2026 Politburo meeting
- MOFCOM issues excess capacity position paper
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, X, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s July 2026 manufacturing and non-manufacturing PMI data
https://www.stats.gov.cn/sj/zxfb/202607/t20260731_1964253.html
The RatingDog July 2026 China General Manufacturing PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/402fe5cf21e94c2d83e7c7b5cc6fe2ea
China’s July 2026 Politburo meeting
https://www.news.cn/20260730/13ecbfd4cd9b455281a0649232b98ad0/c.html
MOFCOM issues excess capacity position paper
https://www.mofcom.gov.cn/syxwfb/art/2026/art_9484491dee094b25bb54656fdef72a93.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 5th August 2026.
(MUSIC)
RUI: Data released by the National Bureau of Statistics on 31st July showed that manufacturing activity in China contracted in July, ending four-months of continuous expansion.
XINHE: The Official Manufacturing Purchasing Managers’ Index, or PMI, stood at 49.2 points in July, the lowest level recorded since February 2026. All subindices covered by the index showed contraction. In particular, the new orders subindex dropped sharply, falling from 51.2 points in June to 48.5 points, indicating that demand for manufactured products declined at a faster pace than their supply.
RUI: The National Bureau of Statistic’s Non-Manufacturing PMI—which comprises of services and construction activity—also registered contraction in July. The index came in at 49 points during the seventh month of the year. Construction activity was down by two percentage points at 47%—the lowest figure registered for this metric since February 2020, during the beginning of the COVID-19 outbreak—while the Service Industry Business Activity Index stood at 49.3 points, down 1.1 points on June 2026’s reading.
(MUSIC)
RUI: Findings of a private survey released on 3rd August found that operating conditions in China’s manufacturing sector continued to improve, albeit at a slower pace, in July 2026.
XINHE: The RatingDog China Manufacturing Purchasing Managers Index stood at 50.9 points in July. This marks the eighth consecutive month that the index has stayed above the 50-point threshold, which indicates a continued improvement in the manufacturing segment of China’s economy.
Total new orders increased for a fourteenth consecutive month, while new export business activity rose for the first time in three months, returning back to expansion territory. At the same time, a reduction of purchasing activity was seen for the first time since November 2025.
RUI: Conversely, the official PMI data issued last week by the National Bureau of Statistics showed a contraction in manufacturing activity for July, with demand dipping more than production. The discrepancy between the official and the RatingDog PMI—while partly due to methodology—is also likely influenced by the fact that more export-orientated companies are included in the RatingDog PMI sample.
(MUSIC)
RUI: On 30th July, the Political Bureau of the Communist Party of China Central Committee met to evaluate the country’s economic performance and detail China’s key economic tasks for the second half of 2026.
According to an official readout, such tasks include: stepping up macro policy support and accelerating fiscal spending; stimulating domestic demand and service-related consumption; creating a healthier market environment; address ‘involution-style’ competition; fostering mutually beneficial international economic and trade cooperation; and vigorously developing trade in services.
It was also decided at the meeting that the fifth plenary session of the 20th Central Committee of the Communist Party of China will be held this coming October.
XINHE: It is positive that a number of the issues discussed at the July plenary session are related to concerns of European companies operating in China, including the need to address several structural challenges facing the Chinese economy.
These points do not represent new policy objectives, but rather a reiteration of previous objectives outlined in key policy documents, including the Premier’s 2026 Government Work Report and the 15th Five-year Plan for National Economic and Social Development. This reiteration suggests that there will be no major deviation in policy priorities for the second half of the year, and that additional action plans to address these issues can be expected.
(MUSIC)
RUI: On 28th July, the Ministry of Commerce (MOFCOM) published China’s Position on the So-called Excess Capacity Issue, a standalone document that outlines the country’s formal stance on the topic of ‘excess capacity’, a moniker for ‘overcapacity’.
The document offers a counternarrative to concerns relating to the potential distortive impact that surging exports of Chinese goods could have on third-countries’ industrial competitiveness and resilience, which it argues are being used to “stok[e] up protectionism”.
XINHE: In this regard, the paper argues that:
- there is no necessary connection between industrial subsidies and excess capacity; that “large exports or a trade surplus are not synonymous with excess capacity”;
- arguments that “China’s inadequate domestic demand gives rise to excess capacity” are counter factual; and
- market competition is the most effective mechanism to curb disorderly capacity expansion.
It also explicitly rejects the notion of China shock 2.0—which has gained traction in the EU and US in recent months—noting instead that industrial modernisation of China equates to a “China opportunity 2.0” for the rest of the world.
RUI: The position paper is likely to hold little weight among European officials, as it does not acknowledge the EU’s legitimate concerns related to its growing trade imbalance with China, which include the threat it poses to European overall economic security, its industrial resilience and the rate at which manufacturing jobs are being lost.
XINHE: At the same time, it is positive that the document calls for “[s]trengthening multilateral and bilateral dialogue on industrial policies”, something the European Chamber is also advocating for. It is important for the EU and China to engage in frank discussions regarding the use of industrial policies, with a view to aligning on if and when it is legitimate to use industrial policy to ensure economic security and resilience, and the areas where more openness, reliability and predictability can and should be provided for businesses.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
RUI: Listen to the full episode on our WeChat account, or your preferred podcast platform.
This episode contains segments on:
- China’s January-June 2026 foreign direct investment (FDI);
- China’s January-June 2026 industrial profits;
- China adds 14 EU entities to its export control list; and
- European Parliament Committee on Foreign Affairs visits China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, X, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s January-June 2026 foreign direct investment (FDI)
https://mo.mofcom.gov.cn/tjsj/ndtzsj/art/2026/art_703f2e0b79944b238638aa1024bf1613.html
China’s January-June 2026 industrial profits
https://www.stats.gov.cn/sj/zxfb/202607/t20260727_1964194.html
https://www.stats.gov.cn/sj/sjjd/202607/t20260727_1964193.html
China adds 14 EU entities to its export control list
https://www.mofcom.gov.cn/zcfb/zc/art/2026/art_439d72e1f12d414aa381260ef304b6aa.html
https://www.mofcom.gov.cn/syxwfb/art/2026/art_4415765208fc48fa979c3c0d25b1b9b7.html
European Parliament Committee on Foreign Affairs visits China
https://www.europarl.europa.eu/news/en/press-room/20260716IPR46537/foreign-affairs-committee-meps-conclude-mission-to-china
https://www.mfa.gov.cn/eng/wjbzhd/202607/t20260723_11990191.html
https://mp.weixin.qq.com/s/AeGw-pr8kN87C-8Vdg4nHQ
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 29th July 2026.
(MUSIC)
RUI: Data published by the Ministry of Commerce on 24th July shows that China attracted 402.14 billion yuan of foreign direct investment, or FDI, between January and June 2026, a year-on-year decrease of five per cent. Of this figure, 105.03 billion yuan of FDI flowed into the manufacturing sector, while China’s service sector attracted 289.62 billion yuan of FDI.
XINHE: FDI inflows into high-tech industries increased sharply by 33.2 per cent year-on-year to stand at 170.33 billion yuan, accounting for 42.4 per cent of all FDI attracted by China during the first six months of 2026.
RUI: FDI relating to R&D and design services; computer and office equipment manufacturing; and electronic and communication equipment manufacturing all also saw strong growth, increasing by 82 per cent, 52 per cent and 29 per cent year-on-year respectively.
(MUSIC)
RUI: Profits at larger industrial firms in China—those with an annual revenue of at least 20 million yuan—increased by 18.7 per cent during the first half of 2026, according to data published by the National Bureau of Statistics on 27th July.
XINHE: A sharp increase in profits at larger mining and manufacturing firms was recorded, with bottom lines increasing 33.5 per cent and 20.1 per cent on average respectively. By contrast, profits at larger firms operating in the electricity, heat, gas and water production and supply segment of the economy fell by 4.2 per cent year-on-year during the first half of the year.
RUI: Commenting on the data, Yu Weining, a statistician at the National Bureau of Statistics noted that despite a rise in overall profits being recorded, challenges remain, including the increasingly uncertain international environment, volatile commodity prices and weak domestic Chinese demand.
(MUSIC)
RUI: On 24th July, China’s Ministry of Commerce announced it had added 14 European entities to the country’s export control list. The move bans exporters from exporting dual-use items to the listed entities, and prohibits foreign organisations and individuals from transferring or providing dual-use items originating in China to them.
XINHE: A spokesperson for the Ministry of Commerce said the measure had been taken in response to EU’s decision to sanction 14 enterprises from the Chinese mainland and Hong Kong, as part of the bloc’s 21st sanctions package issued against Russia.
RUI: Commenting on the development, EU Commission spokesperson Paula Pinho said the Commission was analysing China’s newly announced measures and would liaise with both member states and the impacted companies accordingly.
(MUSIC)
RUI: From 21st to 23rd July, a delegation from the European Parliament’s Committee on Foreign Affairs, led by Chair of the Committee David McAllister, visited China to meet with counterparts including China’s Foreign Minister Wang Yi. According to an official EU readout, several issues of strategic importance to the EU were discussed during the talks, including the geopolitical implications of the bloc’s growing trade imbalance with China, Russia’s war of aggression against Ukraine, the human rights situation in China, and peace and stability in the Indo-Pacific region.
XINHE: On 21st July, European Chamber Vice-President Stefan Bernhart, met with the Parliament delegation to brief them on key economic and regulatory developments of note for European companies in China. He also recommended measures to the delegation that EU policymakers could take to better preserve Europe’s strategic industries and competitiveness, while also continuing to engage with China.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
RUI: Listen to the full episode on our WeChat account or your preferred podcast platform.
This episode contains segments on:
- China’s January to June urban unemployment rate;
- China’s January to June real estate data;
- China’s January to June urban fixed asset investment;
- China’s January to June households’ income and consumption expenditure;
- A joint announcement by the French president and the German chancellor; and
- European Chamber meets European Commissioner for Energy and Housing Dan Joergensen.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, X, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s January to June youth unemployment rate
https://english.www.gov.cn/archive/statistics/202607/15/content_WS6a5737e0c6d00ca5f9a0c384.html?utm_source=chatgpt.com
https://baijiahao.baidu.com/s?id=1871229429287938923𝔴=spider&for=pc
https://english.www.gov.cn/policies/latestreleases/202607/14/content_WS6a558bdfc6d00ca5f9a0c2cf.html
China’s January to June real estate data
https://www.stats.gov.cn/sj/zxfb/202607/t20260715_1964126.html
https://www.stats.gov.cn/sj/sjjd/202607/t20260715_1964114.html
https://english.news.cn/20260715/cfb73d6448034c62a397445e5e25eaa2/c.html
China’s January to June urban fixed asset investment
https://www.stats.gov.cn/sj/zxfb/202607/t20260715_1964124.html
China’s January to June households’ income and consumption expenditure
https://www.stats.gov.cn/sj/zxfb/202607/t20260715_1964129.html
A joint announcement by the French president and the German chancellor
https://www.ft.com/content/e8f185db-9b5c-4d0c-8e5e-e130483f151d?syn-25a6b1a6=1
https://www.lemonde.fr/en/economy/article/2026/07/17/france-germany-to-draft-joint-roadmap-on-china-trade-by-september_6755584_19.html?srsltid=AfmBOopUmIN5FBCIz4Kul6YnTEnCSHsb1r0teOZZaN80UBJ7CaN8lWoM
https://www.euronews.com/my-europe/2026/07/17/france-and-germany-deepen-defence-ties-and-push-for-tougher-stance-on-china
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 22nd July 2026.
RUI: According to data published by the National Bureau of Statistics on 15th July, China’s surveyed urban unemployment rate stood at 5 per cent in June, down from 5.1 per cent the previous month. The average surveyed urban unemployment rate for the first half of this year is 5.2 per cent.
XINHE: Unemployment among China’s urban youth saw a significant drop in June. Slightly less than 15 per cent of people between the ages of 16 to 24 not currently enrolled in education were out of a job, down from 15.6 per cent in May. For those aged 25 to 29, excluding students, the unemployment rate is relatively stable at 7.1 per cent. The rate for people between the ages of 30 and 59 fell 0.1 percentage point, to 4 per cent.
RUI: While the June data indicates some easing, Xiao Ning, Director of the Population and Employment Statistics Department of the statistics bureau highlighted that there is still an imbalance between labour supply and demand, with weak demand for workers in some sectors, underscoring the need for additional employment support. This is something that is already on the government’s agenda: the plan to expand consumption during the 15th Five-year Plan period, released on 13th July by the State Council, includes pledges to “promote high quality and full employment”.
(MUSIC)
RUI: Investment in China’s real estate market—an ongoing pain point in China’s economy— dropped 18 per cent year-on-year in the first six months of 2026, according to data released by the National Bureau of Statistics on 15th July.
XINHE: At the same time, the decline in China’s new-home prices showed signals of easing in June, with the number of cities reporting month-on-month increases in new home prices rising to 20, up from 16 in May. This is the highest number of cities reporting an uptick in new home prices recorded in a year. Mao Shengyong, deputy head of the statistics bureau told a press conference on 15th July that China will continue to “adopt city-specific policies and promote the stable and healthy development of the property market”. The real estate slump, now in its fifth consecutive year, has been a significant drag on China’s economy, with its impact not limited to households and property developers. Local governments are struggling too, with their revenue from selling land-use rights having halved between 2021 and 2025.
(MUSIC)
RUI: Urban fixed asset investment registered its steepest decline since the COVID-19 pandemic in the first half of 2026. It totalled 22.63 billion yuan in the January-June period, contracting 5.7 per cent year-on-year.
XINHE: While private investment dropped at a faster rate, down 8.5 per cent from a year ago, state investment in fixed assets also saw a decrease of 2.3 per cent in the first half of the year. A big contributing factor to the continued contraction in fixed asset investment is local government debt, as cash-strapped local governments are putting investment projects on hold.
(MUSIC)
RUI: On 15th July, the National Bureau of Statistics issued a statement highlighting that in the first half of 2026, China’s per capita disposable income and consumption expenditure both increased.
XINHE: From January to June, China’s per capita disposable income was close to 23 thousand yuan, representing a nominal increase of 5.2 per cent year-on-year and a real growth of 4.2 per cent year-on-year after deducting price factors. During the same period, China’s per capita consumption expenditure was a little under 15 thousand yuan, a nominal increase of 3.7 per cent year-on-year, and a real increase of 2.7 per cent year-on-year after deducting price factors.
RUI: The improvements in income and consumption are positive, as sustained real income growth is essential for Chinese policymakers to address structural issues that are putting a strain on China’s economy, including the imbalance between supply and demand, and unhealthy competition.
(MUSIC)
RUI: On 17th July, French President Emmanuel Macron and German Chancellor Friedrich Merz co-chaired the 26th Franco-German ministerial council in Germany, where they discussed issues pertaining to their bilateral ties as well as to the European Union. At a joint press conference held after the event, they announced that the two countries aim to draw up a joint “roadmap” by September to address issues ranging from defence co-operation to EU integration. Macron said that the countries had “never been as aligned on the question of China”.
XINHE: Regarding China, the French President proposed “emergency measures and early-warning procedures that the Commission can implement to react immediately and protect our industrial base.” Merz highlighted the EU’s growing trade deficit with China, calling for solutions to address the issue, warning that “it comes at the expense of our industry.”
(MUSIC)
RUI: On 21st July, European Chamber Vice President Gianni di Giovanni and Secretary General Adam Dunnett met with European Commissioner for Energy and Housing Dan Joergensen at a dinner hosted by Danish Ambassador Michael Starbæk Christensen.
XINHE: Vice President di Giovanni presented the Chamber’s latest Business Confidence Survey. He also shared several recommendations from the European Chamber’s Energy Working Group aimed at facilitating China’s green transition, which included streamlining cross provincial power purchasing agreements, enhancing green electricity certification systems, setting sustainable fuel blending targets, aligning methanol with global maritime rules, and opening pilot programmes to European technologies. European Union Ambassador to China Jorge Toledo also joined the event and shared his views on EU-China trade and investment relations.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
XINHE: Listen to the full episode on our WeChat account or your preferred podcast platforms.
This episode contains segments on:
- China second quarter GDP performance;
- June industrial production and retail sales;
- June foreign trade in goods data;
- June consumer and producer price indices;
- China’s Five-year Plan for Boosting Consumption;
- Chinese Foreign Minister Wang Yi’s EU visit.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s Q2 2026 gross domestic product (GDP) performance
https://www.stats.gov.cn/sj/zxfb/202607/t20260715_1964121.html
https://www.imf.org/en/news/articles/2026/07/08/tr070826-weo-press-briefing-transcript-july-8-2026
China’s June 2026 industrial production and retail sales
https://www.stats.gov.cn/sj/zxfb/202607/t20260715_1964123.html
https://www.stats.gov.cn/sj/zxfb/202607/t20260715_1964127.html
China’s June foreign trade in goods data
http://www.customs.gov.cn/customs/302249/zfxxgk/fdzdgknr/302274/302275/9f806879-1.html
China’s June 2026 consumer and producer price indices
https://www.stats.gov.cn/sj/zxfb/202607/t20260709_1964083.html
https://www.stats.gov.cn/sj/zxfb/202607/t20260709_1964084.html
https://www.stats.gov.cn/sj/zxfb/202607/t20260709_1964084.html
China’s Five-year Plan for Boosting Consumption
https://mp.weixin.qq.com/s/rqEsk2kz-tte62ZqAbNzAA
Chinese Foreign Minister Wang Yi’s EU Visit
https://www.mofcom.gov.cn/xwfb/bldhd/art/2026/art_e750f1abaaa0449b93d1eb4bc4c72d12.html
https://www.fmprc.gov.cn/wjbzhd/202607/t20260706_11975445.shtml
https://www.fmprc.gov.cn/wjbzhd/202607/t20260706_11975445.shtml
https://www.europarl.europa.eu/news/en/press-room/20260629IPR46212/meps-strengthen-the-eu-s-carbon-border-adjustment-mechanism-and-close-loopholes
https://www.fmprc.gov.cn/wjbzhd/202607/t20260707_11976415.shtml
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 15th July 2026.
(MUSIC)
RUI: China recorded GDP growth of 4.3 per cent year-on-year during the second quarter of 2026, according to data published by the National Bureau of Statistics—or NBS—on 15th July. This represents a slowdown compared the first quarter, during which GDP grew at 5 per cent. Higher fossil fuel prices and ongoing challenges, such as subdued consumer confidence and the downturn of China’s property sector, have all weighed on growth.
XINHE: Despite this slowdown, China remains on track to achieve its 2026 GDP growth target—as set out at the Two Sessions—of 4.5 to 5 per cent, having registered 4.7 per cent GDP growth during the first half of the year. The country is also currently outperforming the expectations of both the International Monetary Fund and the World Bank which projected it to achieve a growth of 4.6 per cent and 4.4 per cent respectively during the full year.
(MUSIC)
RUI: Data released by the NBS on 15th July shows that industrial production in China grew by 5.3 per cent year-on-year in June, up 0.8 percentage points on the 4.5 per cent growth registered in May.
XINHE: Retail sales grew more slowly over the same period, with supply growth continuing to outpace demand growth. A 1 per cent year-on-year increase in retail sales was recorded, a sharp decrease on 4.8 per cent growth in retail sales registered in June 2025.
(MUSIC)
RUI: China exported 412.3 billion US dollars’ worth of goods to the rest of the world in June 2026, a year-on-year increase of 27 per cent, according to data published by China’s General Administration of Customs. The total value of goods imported to the country from the rest of the world grew by 36 per cent over the same timeframe, to stand at 286.7 billion US dollars.
XINHE: China Customs’ data also shows that the country’s trade surplus with the EU widened in June to 32.87 billion US dollars, up 7.2 per cent from the 30.66 billion US dollar surplus recorded in May.
The EU’s growing trade deficit with China has become a significant point of contention in Brussels and many EU Member State capitals. During bilateral talks last month, European Commissioner for Trade and Economic Security and Interinstitutional Relations and Transparency Maros Šefčovič warned his counterpart, Chinese Minister of Commerce Wang Wengtao, that the current situation is ‘not sustainable’.
(MUSIC)
RUI: According to data published by the NBS, producer price inflation in China hit a four year high in June after factory gate prices increased 4.1 per cent year-on-year. This was predominantly driven by cost-push inflation, rather than rising demand, as rising input costs—including for oil, gas, chemical materials, and non-ferrous metals—continued to put pressure on producers’ margins.
XINHE: China’s consumer price index registered 1 per cent y-o-y growth during the sixth month of the year, a slight decrease on the 1.2 per cent growth rate recorded in May.
(MUSIC)
RUI: On 13th July, the State Council released the 15th Five-year Plan for Boosting Consumption, which calls for increased service-related and goods consumption; and sets a target of growing retail sales of consumer goods in China to around 60 trillion Chinese yuan by 2030.
The plan also outlines the need to increase household spending power by boosting employment rates, ensuring steady income growth, and by developing a more comprehensive social security system.
XINHE: The document—which is China’s first dedicated five-year plan specifically to boosting consumption—is a positive signal. The European Chamber has long highlighted the need for policies aimed at boosting domestic consumption to be more structural in nature—such as by improving the social safety net—as opposed to those that tend to provide temporary relief, such as trade-in subsidy programmes. While boosting domestic consumption is important, it will also be crucial to ensure that it is balanced against manufacturing output, to avoid further fuelling tensions with many key trading partners—including the EU—whose economies have come under increasing pressure from the rapid growth of Chinese exports.
(MUSIC)
RUI: From 2nd to 7th July, Chinese Foreign Minister Wang Yi visited northern Europe for a series of state visits, which included meetings with Danish Foreign Minister; Swedish Prime Minister and Foreign Minister; Finnish President and Foreign Minister; and Norwegian Prime Minister and Foreign Minister.
Topics discussed included strengthening bilateral trade and investment, rebuilding mutual trust, the green economy and artificial intelligence.
XINHE: Against a backdrop of escalating EU-China trade and investment tensions, it is positive that there has been increased engagement between European and Chinese officials at different levels in recent months. At the same time, with the EU now more assertively looking to rebalance its trade and investment relations with China, there is an increasing need for such talks to lead to tangible outcomes on key European concerns.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- The 15th Five-year Plan for the Construction of a New Energy System;
- China’s Jan-May 2026 foreign direct investment;
- RatingDog China General Manufacturing and Services PMIs; and
- The EU Steel Regulation enters into force.
The May/June edition of EURObiz is available to download on the European Chamber’s office website.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, X, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
The 15th Five-year Plan for the Construction of a New Energy System
https://www.ndrc.gov.cn/xxgk/zcfb/tz/202606/t20260625_1406079.html
China’s January-May 2026 foreign direct investment (FDI)
https://mo.mofcom.gov.cn/tjsj/ndtzsj/art/2026/art_452a8a83305d4bfbabda292f46de782d.html
RatingDog China General Manufacturing and Services PMIs
https://www.pmi.spglobal.com/Public/Home/PressRelease/91a0315b452d4dd181a37d85a4880bd4
https://www.pmi.spglobal.com/Public/Home/PressRelease/453d35cd5f134bd091d700eeb09016f7
The EU Steel Regulation enters into force
https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1484
https://policy.trade.ec.europa.eu/enforcement-and-protection/protecting-eu-steelmaking/factsheet-eu-steel-measure_en
The May/June edition of EURObiz
https://www.europeanchamber.com.cn/en/eurobiz-magazine
European Chamber Member benefits
https://www.europeanchamber.com.cn/en/become-a-member
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: The European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 8th July 2026.
(MUSIC)
RUI: On 26th June, the 15th Five-year Plan for the Construction of a New Energy System was released by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA). The plan calls for strengthening energy security; advancing the green transition; boosting technological self-reliance; and improving market mechanisms.
XINHE: In terms of targets, the plan states that by 2030:
RUI: The plan demonstrates a clear ambition to transition towards a renewable-dominant and system-integrated energy structure, and places an emphasis on grid flexibility, storage deployment and cross-regional coordination.
XINHE: At the same time, it does not address how structural challenges facing China’s energy system will be resolved, included its fragmented market design; the limited predictability of cross-provincial electricity trading; incomplete demand-side flexibility monetisation; and the continued gap between China’s green electricity certificate system and emerging international carbon accounting standards.
(MUSIC)
RUI: China received 327.29 billion yuan in foreign direct investment, or FDI, between January and May 2026, a year-on-year decrease of 8.6 per cent. That’s according to data published on 30th June by the Ministry of Commerce.
XINHE: Over the period, 86.97 billion yuan of FDI was invested into the manufacturing sector, while the service sector attracted 234.15 billion yuan.
FDI into high-tech industries continued to grow, increasing by 9.4 per cent year-on-year, to stand at 130.14 billion yuan. As a result, FDI into high-tech industries accounted for 39.8 per cent of China’s total FDI attracted during the first five months of the year.
RUI: FDI relating to R&D and design services; computer and office equipment manufacturing; and, electronic and communication equipment manufacturing all also performed well, increasing by 96.2 per cent, 29.7 per cent and 18.2 per cent year-on-year respectively.
(MUSIC)
RUI: Findings of a private survey released on 1st July found that operating conditions in China’s manufacturing sector improved in June 2026.
XINHE: The RatingDog China Manufacturing Purchasing Managers Index—which is based on surveys conducted by S&P Global and sent to purchasing managers at around 650 private and state-owned companies—stood at 51.7 points in June. This marks the seventh consecutive month that the index has stayed above the 50-point threshold, which indicates an overall improvement in the manufacturing segment of China’s economy, compared to the previous month.
RUI: An increase in new orders was registered for a thirteenth consecutive month, while employment increased for the first time in three months, with the fastest rate of job creation registered since August 2023. An increase in the average price of inputs was recorded for a twelfth consecutive month, marking the longest sequence of input-price inflation registered since the first half of 2022.
XINHE: The RatingDog China General Services PMI came in at 54.1 points in June, continuing the trend of expansion which began in January 2023. Total activity and new business both increased; while new export business expanded at the fastest rates so far this year. Employment in the services sector rose for a second consecutive month, marking the first back-to-back increase since 2024.
(MUSIC)
RUI: On 1st July, new rules aimed at protecting the EU steel market from global overcapacity came into effect, after having been adopted by the Council of the European Union in June.
XINHE: The Steel Regulation sets tariff-free quotas at 18.3 million tonnes per year, introducing an out-of-quota duty of 50 per cent for 26 categories of steel products imported into the EU. It also introduces a traceability requirement to improve transparency of the EU steel supply chain.
RUI: In addition, companies will need to provide information on where they ‘melt and pour’ imported steel. Speaking on the regulation, Maroš Šefčovič, European Commissioner for Trade and Economic Security, Interinstitutional Relations and Transparency, said that via the regulation the bloc is seeking to “provid[e] market participants with predictability through clear and transparent quota distribution rules, while applying a fair and objective methodology”.
(MUSIC)
RUI: Every two months, the European Chamber publishes EURObiz, the online journal dedicated to covering European business in China, and one that contains contributions submitted by Chamber members who are experts in their field.
The May/June edition of EURObiz is available for free on the Chamber’s website at the link provided in the show notes and includes articles on a range of topics including:
- arbitration in China;
- derisking;
- ensuring regulatory compliance when exporting pet food to China;
- the EU and China’s respective cross-border data transfer rules and regulations; and
- AI-driven job displacement.
XINHE: Listeners are also invited to contact the European Chamber if they are interested in contributing an article to or advertising in the magazine, which is distributed to 24,000 senior European and Chinese business executives and government officials, and to more than 1,600 European Chamber member companies.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
RUI: Listen to the full episode on our WeChat account, or your preferred podcast platform.
This episode contains segments on:
- European Commissioner Maros Šefčovič meets with Chinese Minister of Commerce Wang Wentao;
- China’s January-May 2026 industrial profits;
- China’s June 2026 purchasing managers’ index; and
- Measures for Industrial and Supply Chain Security Investigations.
Listeners are also invited to attend the event Exclusive Dialogue with Professor Adam Tooze: China Shock 2.0 and EU-US-China Economic Ties on 3rd July online or in person in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, X, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Commissioner Maros Šefčovič meets with Chinese Minister of Commerce Wang Wentao
https://ec.europa.eu/commission/presscorner/detail/en/statement_26_1480
https://ec.europa.eu/commission/presscorner/detail/en/speech_26_1344
https://www.mofcom.gov.cn/syxwfb/art/2026/art_9cd42e0b33234aeeb513261f9a9f03a0.html
China’s January-May 2026 industrial profits (NBS)
https://www.stats.gov.cn/sj/zxfb/202606/t20260627_1964019.html
https://www.stats.gov.cn/sj/sjjd/202606/t20260627_1964017.html
China’s June 2026 official PMI data (NBS)
https://www.stats.gov.cn/sj/zxfb/202606/t20260630_1964032.html
https://www.stats.gov.cn/sj/sjjd/202606/t20260630_1964033.html
MOFCOM’s Measures for Industrial and Supply Chain Security Investigations
https://www.mofcom.gov.cn/zcfb/zc/art/2026/art_b2212d76bb3841669babefe7ef997852.html
https://www.mofcom.gov.cn/syxwfb/art/2026/art_9cd42e0b33234aeeb513261f9a9f03a0.html
Chamber event: Exclusive Dialogue with Professor Adam Tooze: China Shock 2.0 and EU-US-China Economic Ties
https://www.europeanchamber.com.cn/en/upcoming-events/29439/_Hybrid_Exclusive_Dialogue_with_Prof._Adam_Tooze_China_Shock_2.0_and_EU_US_China_Economic_Ties
European Chamber Membership: https://www.europeanchamber.com.cn/en/become-a-member
Transcript:
RUI: Hello and welcome to China ShortCuts,
FRANCESCA: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 1st July 2026.
(MUSIC)
RUI: On 29th June, European Commissioner for Trade and Economic Security and Interinstitutional Relations and Transparency, Maros Šefčovič, and Chinese Minister of Commerce Wang Wentao held the first meeting of the EU-China Trade and Investment Consultations (TIC) in Brussels.
FRANCESCA: A joint press release on the meeting noted that four initial workstreams under the TIC had been identified—on trade and investment balancing, export controls, IPR, and WTO reform—with officials mandated to engage in these areas. The two sides also agreed to establish a joint monitoring mechanism to exchange relevant data, monitor trade flows and support technical work with a view to improving transparency, enhancing mutual trust and managing trade frictions.
RUI: In a set of published press remarks, Commissioner Šefčovič noted that his goal is “balancing the trade relationship between the EU and China”, given that “China’s exports to the EU keep rising, while [the EU’s] market share in China keeps shrinking”, something that is “not sustainable”. The Commissioner also added that while the EU remains open for business, it needs to “defend [its] industrial base and keep pushing for a level playing field globally, so [that its] industries get a fair shot at competing.”
FRANCESCA: A statement published by China’s Ministry of Commerce, on 30th June, noted that Minister Wang had raised concerns relating to the EU’s draft Cybersecurity Law 2, as well as its Industrial Accelerator Act as part of the discussions, and that the Minister had reiterated that the EU should not see China as “the root of the EU’s problems”.
Further talks are set to take place this Autumn at the ministerial level. It remains to be seen if the EU-China Trade and Investment Consultations will replace other bilateral dialogues, such as the EU-China High-level Economic Dialogue, or take place in addition to them.
RUI: Amid escalating trade and investment tensions, it is positive that senior officials from both sides are engaging face-to-face. The Chamber hopes that such talks will pave the way for a more sustainable EU-China relationship and stands ready to contribute to this end.
(MUSIC)
RUI: Profits at larger industrial firms in China—those with an annual revenue of at least 20 million RMB—increased by 18.8 per cent year-on-year during the first five months of 2026, according to data released by the National Bureau of Statistics on 27th June.
FRANCESCA: Strong growth was seen in both mining and manufacturing, with profits increasing by 33.5 per cent and 20 per cent respectively. By contrast, profits at larger firms operating in the electricity, heat, gas and water production and supply segment of the economy fell by 2.7 per cent year-on-year over the same timeframe.
(MUSIC)
RUI: Data published by the National Bureau of Statistics on 30th June showed that manufacturing activity in China expanded in June. The country’s official Manufacturing Purchasing Manager’s Index, or PMI, edged up to 50.3 points in June, from 50 points in May, the threshold that separates contraction and expansion.
Among the sub-indices covered by the index, the production and new orders indexes both registered expansion, coming in at 51.4 and 51.2 points respectively, indicating both supply and demand growth.
FRANCESCA: The National Bureau of Statistic’s Non-manufacturing PMI, which comprises construction and services data, stood at 50.2 points in June, up 0.1 percentage points from May’s level. At the same time, several subindices covered by the index—including for new orders, sales prices and employment—all continued to register contraction.
(MUSIC)
RUI: On 24th June, the Ministry of Commerce issued the Measures for Industrial and Supply Chain Security Investigations (Measures), which contain 22 articles and came into effect that same day.
It follows the publication of the State Council’s Regulations on the Security of Industrial and Supply Chains (Decree 834) in April 2026, which is intended to “guard against security risks in industrial and supply chains, enhance their resilience and security, and safeguard economic and social stability as well as national security.”
FRANCESCA: Decree 834 provides a legal framework through which the relevant authorities can respond to actions perceived as damaging to China’s industrial and supply chain security. The Measures provide further details on how related investigations are to be initiated and conducted, as well as on what action can be taken in response.
The broad scope of the Measures and the vague language they contain raises concerns that legitimate commercial decisions could be interpreted as violating the legislation. For example, Article 4 of the document notes that when assessing potential harm to China’s industrial and supply chain security, the MOFCOM may consider: the impact of actions on both “China’s industrial and supply chains, including essential materials, technology, capital, assets, data, information, personnel, enterprises, and projects”; and “the international competitiveness and development potential of China’s industrial and supply chains”, without specifying what criteria will be adopted for carrying out such assessments.
RUI: The Measures add further uncertainty to European companies doing business in or with China, and raises the possibility of potential conflicts with binding third-country laws and regulations.
(MUSIC)
RUI: China’s growing trade surplus with the EU, as well as the increased competitiveness and technological upgrading of its firms, which are now direct competitors of European players in many industries, has led to intense debate in the EU over what this means for the bloc’s economy, and how policy makers from the continent should respond.
The notion of a ‘China shock 2.0’ has emerged, with a heightening of concerns over Europe’s potential de-industrialisation.
FRANCESCA: Join us on 3rd July online or in person at the Chamber’s Beijing office to hear Colombia University and European Institute Director Professor Adam Tooze’s insights on the China Shock 2.0 and its implications for EU-US-China economic ties. This event is exclusively open to European Chamber members. Should you not yet be a Chamber member and be interested in learning more about the Chamber’s services, then more information can be found at the link in the show notes.
(MUSIC)
FRANCESCA: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
RUI: Listen to the full episode on our WeChat account, or your preferred podcast platform.
This episode contains segments on:
- The Action Plan for Stabilising, Promoting and Optimising Foreign Investment;
- China’s January–May fiscal revenue;
- The 4th China International Supply Chain Expo; and
- Austrian Federal Minister for European and International Affairs Beate Meinl-Reisinger’s visit to China.
The EU-China Business Digest is a member-only weekly update on the latest economic, regulatory and political developments of most relevance to European businesses operating in China. Join the Chamber’s membership to receive the newsletter.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Action Plan for Stabilising, Promoting and Optimising Foreign Investment
https://www.mofcom.gov.cn/zcfb/wgtzgl/art/2026/art_0cfe31a63f9c4bd3869517bc10908c10.html
https://www.news.cn/20260622/11befa2863ce4bd7b74a62e631758bec/c.html
https://www.scmp.com/economy/china-economy/article/3357952/china-launches-plan-revive-foreign-investment-fdi-continues-fall
China’s January-May fiscal revenue
https://gks.mof.gov.cn/tongjishuju/202606/t20260622_3992033.htm
The 4th China International Supply Chain Expo
https://en.cisce.org.cn/overview/basicinfo.html
Austrian Federal Minister for European and International Affairs Beate Meinl-Reisinger visits China
https://www.mfa.gov.cn/eng/xw/wsrc/202606/t20260621_11949294.html
https://www.consilium.europa.eu/media/r1rowtfb/en-20260619-european-council conclusions.pdf
https://www.ft.com/content/e220372c-b20e-418e-9f02-29a5aa269702?syn25a6b1a6=1
The EU-China Business Digest
https://www.europeanchamber.com.cn/en/policy-updates-and-analysis/11301/the_eu_china_business_digest
European Chamber member benefits
https://www.europeanchamber.com.cn/en/membership-benefits
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: The European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 24th June 2026.
(MUSIC)
RUI: On 22nd June, China’s Ministry of Commerce, National Reform and Development Commission and Ministry of Finance issued the Action Plan for Stabilising, Promoting and Optimising Foreign Investment. The document details 15 measures across five areas, which include expanding market access, optimising investment-related procedures, enhancing investment promotion efforts, and improving China’s “foreign investment service and guarantee system”.
XINHE: According to Vice Minister of Commerce Ling Ji, the action plan is in line with the text of China’s 15th Five-year Plan, which outlines the need for the country to increase its efforts to attract foreign-direct investment—or FDI—and encourage foreign-invested firms to reinvestment their China earned profits back into the county, as well as to further promote market opening, particularly in the services sector.
The Chamber views the publication of the action plan as a positive development. Fully implementing the points contained in the document would go some way towards restoring China’s attractiveness as an investment destination.
(MUSIC)
RUI: China recorded a 4 per cent year-on-year increase in its fiscal revenue during the first five months of 2026, according to data released by the Ministry of Finance on 22nd June.
XINHE: Total tax revenue increased by 4.4 per cent compared to 2025’s levels—with increases in earnings of domestic value-added tax, or VAT; import VAT; and, customs duties all contributing to this—while non-tax revenue grew by 2.2 per cent.
Revenues earned from domestic consumption tax fell by 3.1 per cent year-on-year in the period running January to May, while revenues stemming from property-related taxes also fell, with revenues generated from deed taxes decreasing by 14.8 per cent and from land VAT by 14.2 per cent, amid ongoing headwinds facing China’s property sector.
(MUSIC)
RUI: The 4th China International Supply Chain Expo (CISCE)—which will take place from 22nd to 26th June—is currently being held in Beijing. The event will be attended by representatives from government, businesses and international organisations, at which they will exchange their views on global industrial and supply chains.
XINHE: Increasing supply chain resilience has emerged as a top priority for European businesses operating in China in recent years, following recent events such as the COVID-19 pandemic and escalating geopolitical tensions exposing the fragility of global sourcing, production and distribution networks.
In this regard, two-thirds of respondents to the Chamber’s Business Confidence Survey 2026 reported having reviewed their supply chain strategies over the past two years, with:
- a third taking measures to further onshore their supply chains into China;
- 24 per cent taking steps to *both* on- and offshore into / from China;
- And 7 per cent solely offshoring parts of their supply chains from China and/or establishing alternative supply chains outside of the country.
(MUSIC)
RUI: Austrian Federal Minister for European and International Affairs Beate Meinl-Reisinger is currently in Beijing where she is leading a delegation of representatives from Austrian businesses to meet with Chinese stakeholders between 22nd to 26th June.
The visit takes place at the invitation of Chinese Foreign Minister Wang Yi and comes shortly after visits being made to China by other EU and EU Member State officials in recent months including, a 12-member delegation led by MEP Engin Eroglu in May and a delegation of EU lawmakers overseeing market and consumer protection in March.
It also comes shortly prior to Chinese Commerce Minister Wang Wentao visiting Brussels next week — which is scheduled to take place between 29th and 30th June.
XINHE: Meinl-Reisinger’s visit takes place against a backdrop of escalating EU-China trade and investment tensions, with discussions regarding how to address the EU’s growing trade deficit with China and the distortive impact of Chinese industrial policies on the EU Single Market, as well as strengthen the EU’s own industrial competitiveness increasingly gaining traction in Brussels and Member State capitals.
(MUSIC)
RUI: Since March 2025, the European Chamber has provided its members with the EU-China Business Digest, a weekly update on the latest economic, regulatory and political developments of most relevance to European businesses operating in China.
XINHE: Published on Fridays, the Digest is sent to members via a dedicated newsletter and can be accessed via the Chamber’s website. The service is currently accessible to Chamber members only.
RUI: We invite you to keep an eye out every Friday for new issues of the document.
Should you not yet be a Chamber member, then we encourage you to have a look at the link in the show notes on membership benefits, to find out more if joining the Chamber member would add value to your business.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s May macroeconomic data
- European Commission President Von der Leyen’s G7 statements
- China’s passenger vehicle exports
- The EU’s new steel overcapacity framework
Listeners are also invited to attend the Mid-year Economic Watch 2026: Preparing for H2 on 2nd July online or in person in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s May macroeconomic data (NBS)
https://www.stats.gov.cn/sj/zxfb/202606/t20260616_1963953.html
https://www.stats.gov.cn/sj/zxfbhjd/202606/t20260616_1963949.html
https://www.stats.gov.cn/sj/zxfb/202606/t20260616_1963954.html
European Commission President Von der Leyen’s G7 statements
https://ec.europa.eu/commission/presscorner/detail/en/statement_26_1365
https://www.consilium.europa.eu/media/g54db2fr/leader-s-declaration-on-mutually-beneficial-partnerships.pdf
China’s passenger vehicle exports
https://www.cada.cn/Trends/info_91_10514.html
The EU’s new steel overcapacity framework
https://www.consilium.europa.eu/en/press/press-releases/2026/06/08/steel-overcapacity-council-greenlights-new-rules-to-protect-the-eu-steel-market-from-global-overcapacity/
European Chamber event: Mid-year economic watch 2026, preparing for H2
https://www.europeanchamber.com.cn/en/upcoming-events/29390/_Hybrid_Mid_Year_Economic_Watch_2026_Preparing_for_H2
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 17th June 2026.
(MUSIC)
RUI: According to data published by the National Bureau of Statistics on 16th June, industrial production growth among larger firms in China—those with an annual income upwards of 20 million RMB—accelerated in May. Production at larger industrial firms rose by 4.5 per cent year-on-year during the fifth month of the year, 0.4 percentage points faster than in April.
XINHE: 29 of the 41 main industrial sectors tracked by the Bureau’s industrial production index registered y-o-y growth; the computer, communications, and other electronic equipment manufacturing sector recorded the fastest, with this coming in at 17 per cent.
RUI: In contrast, the total value of retail sales in China fell in May 2026, as the mismatch between supply and demand in the country widened. Thereby, total retail sales decreased by 0.6 per cent compared to 2025’s levels, the first monthly decrease seen since December 2022. Decreasing sales of automotives; household appliances; and building and decoration materials all contributed to this result.
(MUSIC)
XINHE: On 15th June, European Commission President Ursula von der Leyen addressed the Group of Seven—or G7— in France, where she expressed the need to address structural challenges facing the global economy, including global trade imbalances and overcapacity.
RUI: Speaking on the former, von der Leyen pointed out that in 2025, for the first time ever, all EU Member States recorded a trade deficit with China. Speaking on this, she noted that the current situation is not sustainable, while also stating that the EU’s current approach to EU-China trade and investment relations centres on the notion of de-risking, not decoupling.
To achieve its de-risking objectives, the Commission President added that the bloc needs to step up its efforts to build-up its domestic industrial capacity, diversify its supply chains, and to protect its Single Market from unfair trading practices.
XINHE: The address follows a number of similar statements made by EU officials in recent months. It also comes at a time when the EU is debating introducing new legislation, including the Industrial Accelerator Act, the Cybersecurity Act 2, and an Overcapacity Instrument, all of which would likely have ramifications for the bloc’s trade and investment relations with China.
(MUSIC)
RUI: According to data published on 9th June by the China Passenger Car Association, or CPCA, China exported 784,000 passenger vehicles to the rest of the world in May, an increase of 75.1 per cent y-o-y.
XINHE: China’s exports of new energy vehicles (NEVs) recorded particularly strong growth, increasing by 112.6 per cent year-on-year in volume terms, to 424,000 units. As a result, sales of NEVs accounted for the bulk—54.1 per cent—of China’s total passenger vehicles exports in May.
RUI: According to the CPCA, exports have become the main growth engine for China’s automotive sector, which continues to experience weak domestic consumption at home, with exports to the Latin American and European markets seeing particularly strong growth.
(MUSIC)
RUI: On 8th June, the Council of the EU adopted new rules aimed at protecting the EU steel market from global overcapacity. The new framework introduces lower import quotas, higher duties on imports exceeding quotas, stricter origin tracing requirements, and a reinforced review mechanism.
XINHE: Following trade measures being taken by third countries—such as the US—to limit the impact of overcapacity in the steel sector on their respective economies, the EU market has become the primary recipient of global excess steel, especially from China. In 2024, the EU imported 11.7 per cent of its iron and steel from China, with the country ranking as the main source of imports of the metals to the bloc, ahead of India and Turky.
RUI: To help address the issue of steel overcapacity, in December 2025, China announced the roll out of a steel export licensing system, which came into force on 1st January 2026. It remains to be seen, however, how effective this measure will be.
(MUSIC)
RUI: The first half of 2026 was marked by widespread global uncertainty. The ongoing conflict in the Middle East disrupted global energy markets and supply chains alike, while the AI revolution is now transforming some companies business models.
XINHE: Amid this increasingly complex international landscape, China published its 15th Five-year Plan in March, which sets the direction of Chinese policy making for the 2026-2030 period. The document places an increased emphasis on the need to develop ‘new productive forces’, and comes at a time when businesses operating in China face a number of headwinds, including the country’s economic slowdown, heightened geopolitical tensions, involution, and constrained domestic demand.
RUI: Join us on 2nd July online or in person in Beijing to learn how the latest economic developments and Chinese regulatory policies can be expected to impact your business, as well as to get insights on how your enterprise can better navigate the fast-changing global economic landscape.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
XINHE: Listen to the full episode on our WeChat account or your preferred podcast platform.
This episode contains segments on:
- China’s January-April service trade data;
- China’s May foreign trade data;
- EU Trade Commissioner meets China International Trade Representative; and
- China’s May price indexes.
The European Chamber invites foreign manufacturing companies to join a business tour to Guangxi from 24th to 26th June.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s January-April service trade data (MOFCOM)
https://www.mofcom.gov.cn/xwfb/sjfzrfb/art/2026/art_152acea0a00849a798a3ee75a9a07314.html
https://www.safe.gov.cn/safe/2018/0427/8886.html
China’s May foreign trade data (GAC)
http://www.customs.gov.cn/customs/2026-06/09/article_2026060910024254962.html
http://www.customs.gov.cn/customs/2026-06/09/article_2026060910023746698.html
EU Trade Commissioner meets China International Trade Representative
https://ec.europa.eu/commission/presscorner/detail/en/speech_26_1268
China’s May price indexes (NBS)
https://www.stats.gov.cn/sj/zxfb/202606/t20260610_1963922.html
https://www.stats.gov.cn/sj/zxfb/202606/t20260610_1963923.html
https://www.stats.gov.cn/sj/sjjd/202606/t20260610_1963924.html
2026 Foreign Enterprises Guangxi Tour
https://mp.weixin.qq.com/s/mm4ctw-g7sQ0BuiI-g-uhQ
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 10th June 2026.
(MUSIC)
RUI: According to a statement issued by the Ministry of Commerce on 5th June, the total value of China’s services trade with the rest of the world stood at 2.49 trillion RMB in the first four months of 2026, down from 2.63 trillion RMB during the same period in 2025.
XINHE: China exported a total of 985 billion RMB in services between January and April 2026, a decrease of just over 12 per cent year-on-year.
Exports of knowledge-intensive services performed well, growing by 11.7 per cent to 544 billion RMB, with personal cultural and entertainment services and intellectual property usage increasing in value terms by 39.5 per cent and 20.8 per cent respectively.
RUI: The total value of services imported into the country fell by 0.8 per cent year-on-year during the same timeframe to just over 1,500 billion RMB.
XINHE: As a result of these developments, China’s trade in services deficit with the rest of the world increased by just over 37 per cent year-on-year between January and April.
(MUSIC)
RUI: Data released on 9th June by China’s customs authorities showed that the country recorded a trade in goods surplus of just over 105 billion US dollars with the rest of the world in May, an increase of 24.3 per cent relative to the surplus China recorded with the rest of the world in April.
XINHE: The total value of goods exported from China increased 19.4 per cent year-on-year in May, to nearly 377 billion US dollars. Exports of automated data processing equipment and integrated circuits performed particularly well, up by 38.7 per cent and 90 per cent y-o-y respectively; as did automobile exports, which increased 50.4 per cent year-on-year, continuing the trend of strong export growth seen in the sector in recent months.
RUI: The total value of imports of goods to China grew by 27.4 per cent year-on-year during the same timeframe, to over 271 billion US dollars. Again, particularly strong performance was seen in the automated data processing equipment and integrated circuits segments of the economy, where imports in absolute value terms rose by 65.1 and 52.1 per cent y-o-y respectively.
XINHE: China’s growing trade in goods deficit with the EU has long been a point of contention in the EU-China relationship.
On 4th June, EU Trade Commissioner Maroš Šefčovič met with Chinese Vice Minister of Commerce Li Chenggang on the sidelines of a ministerial meeting at the Organisation for Economic Cooperation and Development (OECD) in Paris. Following the meeting, Commissioner Šefčovič said that the EU will engage in deeper negotiations with Chinese authorities to resolve “what is becoming an unsustainable trade deficit with China.”
(Music)
RUI: According to data published by the National Bureau of Statistics, China’s producer price index, or PPI, increased by 3.9 per cent year-on-year in May, registering the highest rate of growth since July 2022.
XINHE: This was primarily driven by cost-push inflation rather than an increase in demand, after an increase in costs for key inputs—including oil, gas and non-ferrous metals—in part a result of the ongoing Middle East conflict.
RUI: China’s consumer price index, or CPI, also registered expansion in April, growing by 1.2 per cent compared to the same month a year prior, with increases in the price of fuel for transportation heavily contributing to this.
(MUSIC)
RUI: From 24th to 26th June, the Foreign Enterprises Guangxi Tour will take place, co-hosted by the People’s Government of Guangxi Zhuang Autonomous Region and CITIC Group.
XINHE: During the three-day event—which includes matchmaking sessions, and field visits to factories and industrial parks—participants will have the opportunity to meet with local government officials and business leaders.
RUI: To register your interest in the event, please contact Jessica Zhu by Thursday 11th June, noon. Attendance is subject to approval by the event’s organisers; local accommodation and transport will be covered for those selected to attend.
Don’t miss this unique opportunity to connect with industry leaders and officials in Guangxi.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- State Council Regulations on Outbound Investment;
- China’s May 2026 Purchasing Managers’ Index (PMI);
- RatingDog China General Manufacturing May 2026 PMI; and
- European Commission College of Commissioners debate on EU-China relations.
Listeners are also invited to join the European Chamber’s Midsummer Business Reception on 12th June in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
State Council Regulations on Outbound Investment
https://www.news.cn/20260601/e39cc163c50c448ea60a1fe3bffde296/c.html
https://www.ndrc.gov.cn/xwdt/xwfb/202606/t20260601_1405611.html
China’s May 2026 PMI
https://www.stats.gov.cn/sj/zxfb/202605/t20260531_1963824.html
https://www.stats.gov.cn/sj/zxfbhjd/202605/t20260531_1963825.html
RatingDog China General Manufacturing May 2026 PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/8537e35754134e47b49b20cb288ead9c
European Commission College of Commissioners debate on EU-China relations
https://ec.europa.eu/commission/presscorner/detail/en/read_26_1201
The European Chamber’s 12th June Midsummer Business Reception
https://www.europeanchamber.com.cn/en/upcoming-events/29178
Transcript:
Francesca: Hello and welcome to China ShortCuts,
XINHE: The European Chamber’s weekly catchup on China’s business landscape.
Francesca: This episode was recorded on 3rd June 2026.
(MUSIC)
Francesca: On 1st June, the State Council released the Regulations on Outbound Investment, or State Council Decree 837, which will come into force on 1st July 2026. The regulations provide the State Council with legal means to “take measures to adjust relevant country-specific investment policies, prohibit or restrict the import and export of goods, technology, or international trade in services” in instances when Chinese investors encounter trade-related investment barriers or obstacles when investing overseas.
XINHE: Published shortly after the State Council’s Regulations on the Security of Industrial and Supply Chains, or Decree 834;and the State Council’s Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States, or Decree 835, Decree 837 appears to be an additional piece of legislation that provides China with a legal framework for taking retaliatory measures against actions it perceives as damaging the rights and interests of its companies.
As is the case with the two previous decrees, the inclusion of vague language in key provisions contained in the Regulations on Outbound Investment raises the risk that legitimate commercial decisions could be interpreted as violating the legislation. In a worst-case scenario, the decree could be used as a coercive instrument to pressure those subject to its enforcement into complying with political mandates that sit outside the domain of commercial logic.
Francesca:To ensure FIEs can comply, the European Chamber strongly recommends the Chinese authorities publish policy interpretation guidelines in a timely manner that specify if and under what circumstances FIEs doing business in/with China are within the scope of the legislation, as well as definitions for key terms contained within.
This is particularly important at a time when global tensions are increasing, and there is an opportunity for China to demonstrate to companies that it can provide a transparent and predictable investment environment.
(MUSIC)
Francesca: Data released by the National Bureau of Statistics on 31st May showed that manufacturing activity growth in China stagnated in May. The official manufacturing purchasing managers’ index, or PMI, slipped to 50 points, down 0.3 percentage points from the previous month. The reading sits at the threshold between expansion and contraction.
Xinhe: The Bureau’s production index came in at 51.2 points—staying in expansion territory—while all other subindices covered by the PMI showed contraction. Notably, the new orders index stood at 49.9 points, down 0.7 percentage points compared to April’s reading, indicating that demand for manufactured products had declined.
Francesca: China’s official non-manufacturing PMI, which gauges services and construction business activity, stood at 50.1 points in May, up by 0.7 percentage points from the previous month. The service business activity index registered 50.3 points, with rail transportation; telecommunications, radio, television, satellite transmission services; and insurance services all registering strong expansion of above 55 points.
(MUSIC)
Francesca: Findings of a private survey released on 1st June suggest that operating conditions in China’s manufacturing sector remained robust in May. The RatingDog China General Manufacturing PMI stood at 51.8 points in May, down from 52.2 points recorded in the previous month. This marks the sixth consecutive month that the index had stayed above the 50-point threshold, which indicates an overall increase in the manufacturing segment of China’s economy, compared to the previous month.
Xinhe: Commenting on the data, Yao Yu, Founder of RatingDog—one of the companies responsible for the survey—attributed the positive finding to the fact that inflationary pressures on firms had eased, noting this had provided some relief to businesses when it comes to costs and pricing. At the same time, Yao also warned that softening demand growth and external orders both warrant attention.
(MUSIC)
Francesca: On 29th May, the European Commission College of Commissioners met to debate EU-China relations. An official read-out of the meeting noted that the Commission’s overarching approach to EU-China relations will continue to centre on the notion of de-risking, not decoupling, while also stating that although “China remains a critical partner, the current state of the trade and investment relationship is not sustainable.”
It is expected that the outcomes of the debate will feed into upcoming discussions at the G7 Leaders’ Summit, set to take place from 14th to 16th June, as well as European Council meetings scheduled to take place this month.
Xinhe: The European Chamber has been long highlighted the need for China to achieve a more equitable trade and investment relationship with the EU, warning that the current direction of travel is unsustainable.
In this regard, it is a positive that recent major Chinese policy documents, including the Premier’s 2026 Report on the Work of the Government—published at this year’s Two Sessions—and the country’s 15th Five-year Plan, have included measures aimed at boosting domestic consumption and addressing ‘involution-style’ competition within the country.
If successfully implemented, such actions could reduce pressure on the Chinese authorities to rely on exports as a driver of economic growth, and help the country to achieve more balanced trading relationships with key partners, including the EU.
(MUSIC)
Francesca: On 12th June, the European Chamber’s signature annual Midsummer Business Reception will take place in Beijing.
XINHE: The event will be attended by senior members of the European business and diplomatic community based in the city, including standing Ambassador of the Delegation of the European Union to China, HE Jorge Toledo Albiñana, who will soon conclude his tenure in the country.
Francesca: Join us at Rosewood Beijing to meet industry leaders, entrepreneurs and partners, as we bid farewell to Ambassador Toledo. To ensure your attendance, we encourage advance online registration and payment by 5th June.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
Francesca: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s April industrial production
- April retail sales of consumer goods
- Average annual wages of urban employees in 2025
- China’s Justice Ministry ruling on EU Foreign Subsidy investigation
- January-April fixed asset investment
Also, listeners are invited to join the European Chamber’s annual Business Confidence Survey launch online on 27th May.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Industrial Production
https://www.stats.gov.cn/sj/zxfb/202605/t20260518_1963731.html
Retail Sales of Consumer Goods
https://www.stats.gov.cn/sj/zxfb/202605/t20260518_1963727.html
Average Annual Wages of Urban employees
https://www.stats.gov.cn/sj/zxfb/202605/t20260515_1963707.html
China’s Justice Ministry ruling on EU Foreign Subsidy investigation
http://en.moj.gov.cn/2026-05/18/c_1183998.htm
https://www.europeanchamber.com.cn/en/press-releases/3784/european_chamber_statement_on_the_state_council_regulations_on_countering_improper_extraterritorial_jurisdiction_by_foreign_states_decree_835_
China’s Fixed Asset Investment
https://www.stats.gov.cn/sj/zxfb/202605/t20260518_1963730.html
https://www.stats.gov.cn/sj/zxfbhjd/202605/t20260518_1963741.html
European Business in China Business Confidence Survey 2026 Official Launch Event
https://www.europeanchamber.com.cn/en/upcoming-events/29246/_Hybrid_European_Business_in_China_Business_Confidence_Survey_Launch_2026
Transcript:
RUI: Hello and welcome to China ShortCuts,
FRANCESCA: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 20th May 2026.
(Music)
RUI: Production at larger industrial firms in China—those with an annual income of over 20 million Chinese yuan—expanded by 4.1 per cent year-on-year in April, down from 5.7 per cent in March, according to data released by the National Bureau of Statistics on 18th May. This represents the slowest pace of growth in over a year.
FRANCESCA: Out of the 41 main industrial sectors gauged by the headline figure, 29 registered y-o-y growth in April. High levels of production growth were recorded in several key manufacturing industries, including automotive, with this coming in at 9.2 per cent; the computer, communications, and other electronic equipment manufacturing, which grew by 15.6 per cent; and, the railway, shipbuilding, aerospace and other transportation equipment manufacturing, which expanded by 8.2 per cent.
(Music)
RUI: Total retail sales of consumer goods increased 0.2 per cent year-on-year in April, the lowest reading since December 2022. Sales in the automotive sector performed particularly poorly, falling by 15.3 per cent, as did sales of home appliances; as well as building and decoration materials; and furniture which decreased by 15.1, 13.8 and 10.4 per cent respectively.
Online sales of retail goods performed better, increasing by 5.7 per cent compared to a year prior in January-April 2026, and now account for a quarter of all retail goods sales in China.
FRANCESCA: Speaking at a press conference on the data, Chinese National Bureau of Statistics spokesperson Fu Linghui noted that factors, including a limited willingness and capacity to spend among households, continue to constrain consumption growth. Further policy action is thus still needed for China to achieve its goal of boosting consumption, as prioritised in the country’s 15th Five-year Plan.
(Music)
RUI: Average annual wages of private sector urban employees rose by 2.9 per cent in 2025 in real terms, to 71,590 Chinese yuan per annum. Over the same timeframe, average annual wages of urban employees working in the non-private sector—which includes state-owned companies—grew by 4.2 per cent to 129,441 Chinese yuan.
FRANCESCA: In the private sector, the strongest increase in real wages was registered in the transportation, warehousing, and postal services sector, with this coming in at 7.6 per cent. The manufacturing sector ranked second, in which wages grew by 6.4 per cent.
Elsewhere, wages in the real estate industry and leasing and business services declined, falling by 4.7 per cent and 0.4 per cent respectively in 2025.
RUI: Sustained increases to real wages remain essential if Chinese policymakers are to achieve their goals of boosting domestic consumption, and better balancing supply and demand growth, as outlined in the country’s latest Five-year Plan. In the face of weak domestic demand, many firms operating in China are now increasingly relying on exporting to overseas markets, contributing to an increase in the country’s trade imbalance with key trading partners, including the EU, resulting in increased trade tensions.
(Music)
RUI: The Chinese Ministry of Justice issued a notice on 15th May, stating that the EU’s investigation into Nuctech—conducted under the bloc’s Foreign Subsidies Regulation—constituted unlawful extraterritorial jurisdiction.
FRANCESCA: Notably, the development follows the publication of the State Council’s Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States—or Regulation 835—on 13th April. The State Council decree places legal liability on “any organisation or individual [that] implements or assists in the implementation of improper extraterritorial measures by a foreign state, thereby infringing upon the lawful rights and interests of Chinese citizens or organisations”, without clearly defining what constitutes “improper extraterritorial jurisdiction” in the eyes of the Chinese authorities, thus adding to the uncertainty that European companies face when doing business in China.
RUI: The move comes against a backdrop of the EU developing its own legal toolkit aimed at protecting the integrity of its single market and the competitiveness of its industrial base in recent years. Moreover, the EU has demonstrated a willingness to begin to use these tools—including via the launching of anti-subsidies investigations in a number of sectors—as a way of pushing for a more balanced relationship with China, following years of limited progress being made on areas of key concern to the EU, not least asymmetric market access.
(Music)
RUI: According to data released by the National Statistics Bureau on 18th May, urban fixed asset investment in China totaled 14.13 trillion Chinese yuan in the first four months of the year, a contraction of 1.6% compared to a year prior.
This decrease was predominately caused by a drop in investment related to real estate development, which fell sharply by 13.7 per cent. By contrast, investment in both infrastructure and manufacturing increased by 4.3 and 1.2 per cent respectively.
(Music)
RUI: On 27th May, the European Chamber will launch the latest edition of its flagship Business Confidence Survey, which provides a snapshot of business sentiment among European companies operating in China, as well as their two-year outlooks.
FRANCESCA: This year’s data highlights that after several years of deterioration, business confidence in the China market may be approaching an inflection point, and could even be set to improve should the right policies be implemented.
RUI: For further information on the report, visit the European Chamber’s website at the link in the episode notes.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
FRANCESCA: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s April foreign trade data;
- April official purchasing managers’ index;
- April Consumer Price Index and Producer Price Index;
- State Council executive meeting;
- Trump’s visit to China;
- European Chamber flash survey results on the Impact of the Middle East Conflict on European Business in China
Also, listeners are invited to join the European Chamber’s annual Business Confidence Survey launch on 27th May.
Contact Us:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
April foreign trade data:
http://www.customs.gov.cn/customs/2026-05/09/article_2026050910092373174.html
April PMI:
https://www.stats.gov.cn/sj/zxfb/202604/t20260430_1963473.html
https://www.stats.gov.cn/english/PressRelease/202605/t20260506_1963595.html
April CPI:
https://www.stats.gov.cn/sj/zxfb/202605/t20260511_1963659.html
https://www.stats.gov.cn/sj/sjjd/202605/t20260511_1963657.html
April PPI:
https://www.stats.gov.cn/sj/zxfb/202605/t20260511_1963658.html
https://english.news.cn/20260511/8fc7920a97e641f696a2f8f16d4ebf89/c.html
State Council executive meeting:
https://english.www.gov.cn/news/202605/09/content_WS69ff2ff4c6d00ca5f9a0ad96.html
European Chamber Flash Survey: Impact of the Middle East Conflict on European Business in China
https://www.europeanchamber.com.cn/en/press-releases/3788/
Business Confidence Survey 2026 Launch:
https://www.europeanchamber.com.cn/en/upcoming-events/29246
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 13th May 2026.
(Music)
Rui: According to data released by the General Administration of Customs on 9th May, China exported 359.4 billion US dollars’ worth of goods to the rest of the world last month, up 14.1 per cent compared to a year prior. The value of imports to the country also grew over the same time period, with China importing 274.6 billion US dollars’ worth of goods in April, an increase of 25.3 per cent year on year.
Xinhe: As a result, China recorded a trade surplus with the rest of the world of 84.8 billion US dollars over the period.
(Music)
Xinhe: China’s official manufacturing purchasing managers’ index, or PMI, continued to expand for the second consecutive month in April. Data published by the National Bureau of Statistics on 30th April showed that China’s manufacturing activity remained in expansion territory at 50.3 points, above the 50-point benchmark separating growth from contraction, but momentum decelerated slightly from the previous month.
While both production and new orders continued to increase among surveyed manufacturing firms, the pace of production exceeded that of the new orders. At the same time, China’s employment index also contracted, albeit at the highest level since April 2025, registering its best performance over the year at 48.8 points.
Rui: Non-manufacturing PMI declined over the same period. The metric fell to 49.4 points in April, the lowest level in the past year, with contraction seen in both construction and services. New orders also performed poorly, coming in at 44.3 points, again the lowest level registered in the past year, after market demand in the non-manufacturing sector fell.
(Music)
Xinhe: According to data published by the National Bureau of Statistics, China’s producer price index, or PPI, jumped 2.8 per cent year-on-year in April, registering a second month of consecutive growth after 41 consecutive months of decline.
This rebound was primarily driven by cost-push inflation rather than an increase in demand, with costs for inputs including oil, gas, chemical materials and non-ferrous metals all rising. Consequently, although factory gate prices are no longer falling, manufacturers continue to see their profit margins diminish.
Rui: China’s consumer prices index, or CPI, also registered an expansion in April, growing by 1.2 per cent compared to a year prior. Increases in transportation energy prices contributed to this.
(Music)
Xinhe: On 9th May, Chinese Premier Li Qiang chaired a State Council executive meeting during which strategic priorities for the start of the China’s 15th Five-year Plan were outlined. Points covered included, the need to:
- better coordinate supply and demand, as well as the need to implement and refine measures to expand capacity and improve quality in the service sector;
- stabilise employment and strengthen China’s social safety net;
- enhance China’s basic research capabilities; and
- defuse risks relating to the real estate sector, local government debt, and small and medium-sized financial institutions.
(Music)
Rui: US President Donald Trump travelled to China today, 13th May, for the start of a three-day state visit – his first since November 2017, which will include a meeting with Chinese President Xi Jinping.
Xinhe: Against a backdrop of escalating US-China trade and investment tensions—with European businesses suffering as collateral damage—it is a positive that both leaders are meeting face to face. While the Chamber does not expect the visit to culminate in the signing of a ‘grand deal’, nor to address systemic issues facing the bilateral relationship, we hope it will help to build trust and pave the way for a de-escalation of tensions.
(Music)
Rui: On 12th May, the Chamber published the results of a flash survey on the impact of the Middle East conflict on European businesses operating in China. The survey found that 79% of respondents have been negatively impacted by the conflict.
Xinhe: Of those negatively impacted:
- 81% reported difficulties sourcing inputs from the region, which has already resulted in production stoppages for some, with more anticipated in the coming six months;
- two-thirds are facing logistics challenges, primarily related to the increased cost of transport and longer transport times;
- energy-related costs have increased for two-thirds; and
- just over three in ten have seen demand for their company’s products or services decrease.
Rui: A minority of respondents also reported having adjusted their company strategies as a result of the conflict. The survey found that:
- 28% have adjusted their China supply chain strategies, a figure that jumps to 64% of those surveyed in the chemicals and petroleum sector; and
- one in five have already adjusted, or are considering adjusting, their China investment plans.
The full survey findings can be found on the Chamber’s website via the link in the show notes.
(Music)
Xinhe: The European Chamber, in partnership with Roland Berger, will launch the 2026 edition of its flagship Business Confidence Survey (BCS) on 27th May.
After several years of European business confidence in the China market deteriorating, there are now signs that things may be approaching an inflection point, and could be set to improve should the right policies be implemented.
Rui: Join us online or at the Chamber’s Beijing office later this month, to hear Chamber President Jens Eskelund and representatives from each of the Chamber’s chapters present on the report’s key findings.
This episode contains segments on:
- China’s March industrial profits;
- China’s March inbound foreign direct investment;
- Q1 per capita disposable income;
- China issues warning over the EU’s Industrial Accelerator Act.
- The European Chamber is conducting a flash survey among its members on the impact of the Middle East conflict on European companies in China.
Contact Us:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read More:
China Industrial Profits March
https://www.stats.gov.cn/sj/zxfb/202604/t20260427_1963403.html
China’s Inbound Foreign Direct Investment (FDI) March
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2026/art_5129fc44d6584feca60c898006e75e21.html
Q1 Per Capita Disposable Income
https://www.yicaiglobal.com/news/disposable-income-tops-cny10000-per-head-in-17-chinese-provinces-in-first-quarter
China issues warning over the EU’s Industrial Accelerator Act
https://www.globaltimes.cn/page/202604/1359938.shtmlhttps://single-market-economy.ec.europa.eu/document/download/9bc8eb85-4d43-4025-be7b-c86b9f3648ec_en?filename=Proposal%20establishing%20measures%20for%20industrial%20capacity%20and%20decarbonisation%20in%20strategic%20sectors%20.pdf
Transcript:
RUI: Hello and welcome to China ShortCuts,
FRANCESCA: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 29th April 2026.
(Music)
FRANCESCA: Profits of major industrial enterprises in China—firms with an annual income of at least CNY 20 million per annum—jumped 15.5% year-on-year in Q1.
RUI: Particularly strong performance was seen in the manufacturing sector, where major enterprises registering a 19.1 per cent increase in profits, as well as the mining industry, where profits grew on average by 16.2 per cent.
FRANCESCA: By contrast, the picture was bleaker for major industrial enterprises operating in the electricity, heat, gas and water production and supply space, where industrial profits fell by 3.2 per cent relative to Q1 2025.
Company bottom lines also took a hit in the automobile manufacturing industry — an area where oversaturation and ongoing price wars has led to companies having to rely on high sales to compensate for razor-thin margins. Profits in the sector among major industrial firms fell by 17.7 per cent during the first three months of the year.
(Music)
FRANCESCA: China received 249.6 billion yuan in foreign direct investment, or FDI, between January and March 2026 according to data published by the Ministry of Commerce, a 7.3 per cent drop year-on-year.
RUI: Keeping in line with previous years, increased FDI continued to flow into high-tech industries, with this growing in value terms by 30.7 per cent year-on-year to CNY 102.73 billion.
FRANCESCA: Overall, FDI into high-tech industries in China accounted for 41.2 per cent of total FDI received by the country, up 12-percentage points relative to Q1 2025. The fastest rate of growth was seen in R&D and design services, where FDI grew by 127.8 per cent in year-on-year between January to March 2026.
(Music)
FRANCESCA: Average per-capita disposable income across China averaged CNY 12,782 in Q1 2026, according to data published by China’s National Bureau of Statistics.
RUI: This represents a nominal increase of 4.9 per cent year-on-year, or four per cent in real terms after excluding price factors. Disposable income exceeded CNY 10,000 per person in 17 of China’s 31 provincial-level regions in Q1 2026. Shanghai ranked first at CNY 26,689 per head, Beijing second at CNY 24,587, and Zhejiang province third at CNY 23,611.
Disparity remains between per-capita rural and urban disposable income levels, with the former standing at CNY 7,433 and the latter at CNY 16,549 in Q1 2026.
FRANCESCA: Chongqing, Inner Mongolia, Anhui, Hubei, and Hunan were the strongest performers in central and western China. This was partly due to increases in industrialisation and urbanisation, as well as the formation of modern industrial clusters in major cities located in the region, leading to an uptick in regional employment and income levels.
While these consistent increases are a positive sign, further expansion of disposable income will be necessary to lift China’s domestic consumption. The mismatch between supply and demand on the Chinese domestic market and subsequent high levels of exports contributed to trade tensions with China’s trading partners, including the EU.
(Music)
FRANCESCA: On Monday 27th April, a spokesperson for the Chinese Ministry of Commerce criticised the EU’s Industrial Acceleration Act, asserting that it, “runs counter to basic market economy principles”, and that the MOFCOM would enact countermeasures if the EU did not take China’s suggestions for the regulation into account.
RUI: Proposed by the EU Commission on 4th March, the Industrial Accelerator Act, or IAA, aims to ensure that manufacturing accounts for 20 per cent of the EU’s GDP by 2035, up from 14.3 per cent in 2025.
The IAA states the EU will achieve this goal by “accelerating permitting for all manufacturing projects, and by providing a toolbox to provide access to the European single market in a way that prevents strategic dependencies, creates manufacturing jobs, boosts decarbonisation and climate performance and secure access of European citizens and companies to vital commodities and products at all times.”
Notably, it establishes a framework for what ‘Made in Europe’ procurement entails, with this including a framework for the imposition of conditions on foreign direct investments in emerging strategic sectors, where the investment value exceeds EUR 100 million.
FRANCESCA: The IAA is the latest in a set of legal tools introduced by the EU, aimed at protecting the integrity of its Single Market and Europe’s own industrial competitiveness, as well as ensuring reciprocal market access and a level playing field for European companies operating in third markets.
(Music)
RUI: The ongoing conflict in the Middle East has disrupted business operations worldwide. To better understand how European companies operating in China have been impacted, as well as if and what action they are taking in response, the European Chamber has invited all member companies to take a short flash survey.
FRANCESCA: More information about the survey can be found at the link in the show description.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
FRANCESCA: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s Q1 GDP growth;
- China’s March 2026 industrial production;
- China’s March 2026 retail sales;
- Opinions of the State Council on Promoting the Expansion and the Quality of the Service Industry
- Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s Q1 GDP Growth
https://www.stats.gov.cn/sj/zxfb/202604/t20260417_1963336.html
China’s March 2026 Industrial Production
https://www.stats.gov.cn/sj/zxfb/202604/t20260416_1963329.html
China’s March 2026 Retail Sales
https://www.stats.gov.cn/sj/zxfb/202604/t20260416_1963325.html
Opinions of the State Council on Promoting the Expansion and the Quality of the Service Industry
https://www.gov.cn/zhengce/content/202604/content_7066483.htm
European Chamber Statement on China’s Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States
https://www.europeanchamber.com.cn/en/press-releases/3784/
Exporting Control: China’s Strategic Toolkit
https://www.europeanchamber.com.cn/en/press-releases/3781/
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 22nd April 2026.
(Music)
RUI: China recorded a GDP growth rate of five per cent year-on-year in Q1 2026, up 0.5 percentage points relative to its Q4 2025 performance.
XINHE: The tertiary sector, which includes the service industry, expanded by 5.2 per cent year-on-year during the January-March period, while the primary and secondary sectors grew at 3.8 per cent and 4.9 per cent respectively.
China’s Q1 growth rate is so far in line with the country’s formal target of achieving “GDP growth of 4.5–5 per cent, while striving for better in practice”, as outlined in the Chinese Premier Li Qiang’s Report on Work of the Government released at this year’s Two Sessions.
Rui: It is also consistent with the 15th Five-Year Plan, which details the country’s intention to support the development of frontier technologies over the next five years. In this regard, investment in high-tech industries grew by 7.4 per cent during the first three months of the year, significantly outpacing overall investment growth, which increased by 1.7 per cent.
Xinhe: During Q1 2026, imports to China grew relatively faster than exports from the country to the rest of the world. The former increased by 19.6 per and the latter by 11.9 per cent compared to Q1 2025’s levels, a positive sign given that trade imbalances have been a persistent source of concern for many of China’s trading partners, including the EU.
Despite this development, China still ran a trade surplus of CNY 1,855 billion in Q1 2026 with the rest of the world.
(Music)
RUI: In March 2026, production at larger industrial firms in China—with an annual income of over CNY 20 million—grew by 5.7 per cent year-on-year, down slightly from 6.3 per cent in February 2026.
XINHE: Production growth in the manufacturing industry was particularly strong, coming in at six per cent year-on-year, with the mining and utilities industries recording 5.7 per cent and 3.5 per cent growth respectively.
30 out of 41 major industries surveyed recorded increases in production in March. The largest growth was registered in the railway, shipbuilding, aerospace and other transportation equipment manufacturing sector, at 13.3 per cent year-on-year.
New energy vehicle production recorded a 1.2 per cent year-on-year increase, after production had fallen by 13.7 in February 2026.
(Music)
RUI: Total retail sales of consumer goods in China grew by 1.7 per cent year-on-year in March, a slowdown relative to the 2.8 per cent growth rate seen a month prior.
XINHE: Excluding weak automobile sales—which were down 11.8 per cent—retail sales of consumer goods grew at a healthier 3.6 per cent. Online retail sales of goods and services continued to outpace sales growth in physical stores, with the former accounting for a quarter of all retail sales of consumer goods in China.
(Music)
RUI: On 21st April, China’s State Council issued the Opinions on Promoting the Expansion and Quality Improvement of the Service Industry, which calls for the country’s service industry to be further developed in order to support China’s “industrial upgrading, meeting people’s livelihood needs, and driving employment expansion.”
XINHE: The document calls for increased policy support for incubators for emerging industries and future industries; for China to improve its inspection, testing and certification capacities, benchmarking them against international standards; and for China to improve its ability to respond to foreign-related intellectual property risks.
In the artificial intelligence domain, the opinions outline plans for the implementation of China’s AI+ initiative, which aims to have at least 70 per cent AI-enabled terminals and agents in key industries by 2027.
Rui: The opinions also call for further opening up in the service industry, including via the expansion of pilot initiatives relating to value-added telecommunications services, biotechnology and wholly foreign-owned hospitals. However, despite these positive signals, businesses will be waiting to see tangible improvements before committing to large scale investments.
(Music)
Xinhe: On 15th April, the European Chamber released a statement on the Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States, which was published by the State Council on 13th April.
Rui: While the Regulations’ stated aim is to serve as a defensive instrument for China to protect its interests from extraterritorial provisions enacted by foreign states, they contain several provisions that may impact businesses. This includes a provision that places liability on “any organisation or individual [that] implements or assists in the implementation of improper extraterritorial measures by a foreign state, thereby infringing upon the lawful rights and interests of Chinese citizens or organisations.”
Xinhe: The decree shares a limited degree of similarity with the EU’s Blocking Statute, which also aims to counteract third-country extraterritorial measures. However, it is broader scope, and contains vague language, potentially giving Chinese officials wider discretion to punish companies and individuals, including through criminal liability.
Rui: The regulations also affirm China’s ability to use extraterritorial provisions itself when deemed necessary. This is concerning given that Chinese extraterritorial export controls—which were originally announced in October 2025 and subsequently suspended—are set to come into force in November this year.
Xinhe: To read more about China’s evolving export control rules and regulations, check out the Chamber’s latest publication, Exporting Control: China’s Strategic Toolkit, which was published earlier this month. A link can be found in the episode notes.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s March 2026 foreign trade data;
- March price indices;
- Spanish Prime Minister Sanchez’s visit to China;
The Chamber’s latest report Exporting Control: China’s New Strategic Toolkit is available to download on the Chamber’s official website for free.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s March 2026 Foreign Trade Data
http://www.customs.gov.cn/customs/2026-04/14/article_2026041410445518792.html
http://www.customs.gov.cn/customs/2026-04/14/article_2026041410445544739.html
http://www.customs.gov.cn/customs/2026-04/14/article_2026041410445573103.html
China’s March Price Indices
https://www.stats.gov.cn/sj/zxfb/202604/t20260410_1963264.html
https://www.stats.gov.cn/sj/zxfb/202604/t20260410_1963263.html
Spanish Prime Minister Sanchez visits China
https://www.gov.cn/yaowen/liebiao/202604/content_7065562.htm
Exporting Control: China’s New Strategic Toolkit
https://www.europeanchamber.com.cn/en/publications-archive/1380
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 15th April 2026.
(Music)
RUI: In March, the value of China’s imports from the rest of the world surged by 27.8 per cent year-on-year in value terms, representing the strongest growth in four years. Meanwhile, exports from China grew modestly at 2.5 per cent year-on-year.
XINHE: An increase in commodity and high-tech product imports drove the overall increase seen in March. Imports of rare earths rose by 167 per cent, fertiliser by 59.6 per cent and copper ore by 45.6 per cent year-on-year in value terms. Among advanced products, imports of automated data processing equipment saw the strongest growth, rising 49.5 per cent year-on-year. Integrated circuits and mechanical and electrical equipment imports also saw increases at 45 per cent and 24.9 per cent year-on-year respectively.
On a per-country and territory basis, imports routed through Hong Kong saw the strongest growth, growing 334.6 per cent year-on-year in March. However, despite the overall surge in imports, many markets saw a continued expansion of their trade deficits with China, with Chinese exports outpacing imports. In March, China’s imports from the European Union rose 10.5 per cent, while exports to the EU increased 21.1 per cent year-on-year in value terms.
Chinese exports to the rest of the world saw more modest growth across the board. Toy exports fell by 14.8 per cent, steel by 10.8 per cent and rare earths by nine per cent year-on-year in value terms. Most other product categories saw stagnation or modest increases. Outliers were integrated circuits and automobile exports which increased 77.5 per cent and 58.5 per cent year-on-year.
(Music)
RUI: For the first time in three years, China’s Producer Price Index—or PPI—rose by 0.5 per cent year-on-year ending its deflationary streak.
XINHE: This was mainly driven by a rise in commodity prices with the PPI for the means of production—which includes many industrial inputs—increasing by one per cent year-on-year. Inflation was also seen across industries, with prices in the mining and raw materials industries rising by two per cent and 1.1 per cent year-on-year respectively.
Despite this positive sign for the authorities’ efforts to fight deflation, many advanced industries continued to face factory gate price deflation. The automobile and computer, communication and other electronic equipment manufacturing industries saw factory gate prices drop 2.4 per cent and 0.7 per cent respectively.
The PPI for consumer goods remained in deflationary territory in March, recording an overall decrease of 1.3 per cent year-on-year. Prices for a range of other goods fell, with food prices declining 1.7 per cent, daily necessities 1.4 per cent and clothing prices 1.1 per cent year-on-year.
(Music)
RUI: China’sCPI—or Consumer Price Index—grew by one per cent year-on-year, narrowing slightly from February’s one-year high.
XINHE: CPI growth in March was driven by increases in the price for consumer goods which rose by 1.5 per cent year-on-year. Food price inflation, which had driven CPI growth in previous months, eased in March, coming in at 0.3 per cent year-on-year. This was mainly due to a fall in meat prices.
Six of the seven major goods categories saw price inflation in March with medical care increasing strongest at 1.9 per cent, followed by clothing and daily necessities at 1.6 per cent and 1.5 per cent year-on-year. Housing prices fell by 0.2 per cent year-on-year in March.
(Music)
RUI: Spanish Prime Minister Pedro Sanchez is visiting China between the 11th and 15th of Apriland met with President Xi Jinping on Tuesday, 14th April.
XINHE: A range of issues were discussed by the two leaders, from climate change to security and defence, to international trade. Within the EU, Sanchez is an advocate for closer ties between Europe and China. Much of his visit was therefore focused on improving economic ties and discussing lingering tensions. Sanchez also emphasised that the current trade imbalance between the two regions is unsustainable. After the meeting on 14th April, China agreed to measures that would narrow Spain’s trade deficit with China.
(Music)
RUI: On 14th April, the European Chamber published Exporting Control: China’s New Strategic Toolkit.
XINHE: The report dives deep into the development of China’s export control regime, which has enabled the country to control the global supply of strategic goods like rare earths. Given that a significant expansion of China’s export control regime is set to enter force in November 2026, the report calls for urgent action by China to prevent supply chain disruptions later in the year.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s New Regulation on Industrial and Supply Chain Security
- China’s new guidance for e-commerce development
- EU-China joint space mission
Also, the European Chamber will launch its latest report on China’s export control regime which will be available to download from the Chamber’s website on 14th April.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s New Regulation on Industrial and Supply Chain Security
https://www.gov.cn/zhengce/content/202604/content_7064837.htm
China’s new guidance for e-commerce development
https://www.reuters.com/world/asia-pacific/china-issues-guidance-e-commerce-including-cross-border-trade-2026-04-06/
EU-China joint space mission
https://www.ft.com/content/a2fd6a17-4e0a-4db8-b0f4-9a1289f220b3
[Hybrid] Report Launch | Exporting Control: China’s New Strategic Toolkit
https://www.europeanchamber.com.cn/en/upcoming-events/29061
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 8th April 2026.
(Music)
RUI: At the 81st executive meeting of the State Council on 31st March, China adopted the Regulations of the State Council on the Security of Industrial and Supply Chains.
XINHE: Through this regulation, the State Council intends to establish a framework to safeguard China’s industrial and supply chains from security threats, while simultaneously enhancing their resilience.
Multiple State Council departments will share responsibility at the national level to achieve several key priorities. Departments are tasked with developing an early warning and emergency response system that will monitor fundamental risks. A list of key, strategically-important sectors will be created that are subject to heightened oversight from the monitoring authorities.
The new regulations also bestow broad power upon authorities to investigate and potentially retaliate against foreign actors whose policies are deemed detrimental to the security of China’s supply chains. The regulation specifically refers to foreign entities that disrupt the normal flow of trade or impose discriminatory measures against Chinese companies.
In its decree announcing the new regulation, the State Council stressed its desire to balance this regulatory development with international cooperation on supply chain security. Nonetheless, these new legal tools will allow the Chinese Government to react more forcefully to foreign pressure. This dovetails with the priorities outlined in China’s 15th Five-Year Plan, which puts an emphasis on strengthening supply chains and the resilience of China’s economy against foreign disruption.
(Music)
RUI: Following a visit by EU lawmakers on 31st March, China issued guidance for its e-commerce sector, aimed at aligning the sector’s development with international concerns around product safety and trade imbalances.
XINHE: During their visit, EU lawmakers, who represented the EU Parliament’s internal market committee, brought up instances of dangerous and non-compliant imports through Chinese e-commerce platforms. Several Chinese e-commerce platforms are currently under investigation for violations of product standards.
The newly released guidance emphasises the need to establish a balance between promotion and regulation of the booming e-commerce sector. It calls for cross-border pilot zones to be established in which new rules and standards would be implemented while promoting overseas expansion.
This move could be a constructive step towards easing some of the concerns raised by EU lawmakers and member states. While investigations into Chinese e-commerce companies are still underway, continued progress in establishing effective regulation can help ease disputes over dangerous imports.
(Music)
RUI: The EU and China will be launching a joint space mission in late April, following almost a decade of collaboration and preparatory work.
XINHE: The mission entails the launch of a satellite called SMILE, that will study the Earth’s magnetic field, which protects the planet from solar radiation. The goal of the project is to better predict geomagnetic storms, which can damage communications systems and satellites.
As a demonstration of the potency of bilateral scientific cooperation, this project is something of an outlier given the fact that it is taking place in the face of intense geopolitical headwinds. The collaboration was launched in 2016 amid improving relations between the EU and China and has since managed to stay on course, despite intermittent periods of spiralling tensions.
(Music)
RUI: Join the European Chamber’s launch event for its latest publication, Exporting Control: China’s New Strategic Toolkit, on 14th April 2026 at 2pm Beijing time.
XINHE: The report focuses on the development of China’s export control regime and future scenarios in which this evolving toolkit may be applied to influence strategic competition. The event will feature a presentation by the Chamber’s President, Jens Eskelund, followed by a panel discussion on the main findings of the report. The report itself will be available for download from the Chamber’s website on 14th April.
RUI: You can find more information by visiting the link in the description.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s March 2026 Purchasing Manager’s Index (PMI);
- China’s January–February 2026 industrial profits;
- European Parliament delegation visits China; and
- The EU’s new customs rules and customs authority.
Also, the European Chamber will launch a report on China’s export control regime on 14th April.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s March 2026 Purchasing Manager’s Index
https://www.stats.gov.cn/sj/zxfb/202603/t20260331_1962889.html
China’s Industrial Profits January – February 2026
https://www.stats.gov.cn/sj/zxfb/202603/t20260327_1962868.html
European Parliament Delegation Visits China
https://www.bloomberg.com/news/articles/2026-03-31/china-seeks-better-eu-ties-as-lawmakers-return-after-eight-years
https://www.yahoo.com/news/articles/eu-delegation-urges-china-tighten-162222952.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAAs9DPdm8PC-02Pnmexa9HgkJQUmtfmvmrDNeaII2GEAumiAjiKNRKkosPTOvOFlHgk1ZCyZhiuu1Kdge3ytGG8j5X4Gby1rtKIY6u1SUJOLkZulQ_Zi3UYtSxmubYf1n0bYIEnouvQxxbhgsIFO5rFXZ4n4kSDaUKQ0MuzHbtC2
The EU’s New Customs Rules and Customs Authority
https://www.ft.com/content/9d36fbdc-ecd6-42e4-85a1-3d6256c0c61c?syn-25a6b1a6=1
European Chamber Report Launch on Export Control Regime
https://www.europeanchamber.com.cn/en/upcoming-events/29061
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 1st April 2026.
(Music)
RUI: China’s Manufacturing Purchasing Manager’s Index—or PMI—surged by 1.4 percentage points to 50.4 in March, above the critical threshold which indicates expansion. The non-manufacturing PMI also reached expansion territory, jumping by 0.6 percentage points.
XINHE: The surge recorded in March is the largest single month increase for the manufacturing PMI in over a year. This expansion was largely driven by strong new order growth, with the respective PMI jumping by 3 percentage points to 51.6. The PMI for new export orders rose by 4.1 percentage points, yet remained in contraction territory at 49.1.
The PMI for factory prices continued its upward trend, surging by 4.8 percentage points to 55.4. This is especially noteworthy since factory gate price deflation has been a longstanding issue for companies in China. Efforts by Chinese authorities to combat this finally seem to be paying off.
Non-manufacturing business activity, which is made up of construction and services, also recovered in March with the respective PMI rising by 0.6 percentage points and settling just above the expansion threshold at 50.1. The construction sector PMI rose by 1.1 percentage points to 49.3, just below the threshold. The services sector returned to expansion in March with a 0.5 percentage point rise to 50.2.
(Music)
RUI: China’s industrial enterprises recorded strong results in the January to February period, with total profits rising 15.2 per cent year-on-year, reaching 1,025 billion yuan.
XINHE: This overall rise in profits was led by the manufacturing sector, which saw its profits increase by 18.9 percent year-on-year in the January to February period. The mining sector, which suffered from a prolonged slump in commodity prices, also experienced a notable recovery, with profits rising by 9.9 percent year-on-year.
At the industry level, the computer, communication and other electronic equipment manufacturing industry saw a twofold profit increase followed by the non-ferrous metal smelting and rolling processing industry which saw a 1.5-fold increase. An outlier in this trend is the automotive industry, which experienced a 30.2 percent year-on-year decline in its profits in the January to February period.
(Music)
RUI: A delegation of lawmakers from the European Parliament embarked on a three-day trip to China on 31st March, marking the first such visit in eight years.
XINHE: The delegation, which represents the EU Parliament’s internal market committee, is travelling to China on the invitation of the legislative affairs commission of the National People’s Congress. They will visit Beijing and Shanghai and meet with the chairperson of the Standing Committee of the National People’s Congress, among others. Both the EU delegation and their Chinese counterparts emphasised the desire for increased cooperation, especially regarding safeguarding the international trading regime.
Before the visit, the head of the EU Parliament’s delegation called upon Chinese companies to comply with EU product safety standards, referring to an ongoing EU investigation into large volumes of small parcels shipped through Chinese online marketplaces.
On 1st April 2026, European Chamber representatives led by Secretary General Adam Dunnett met with the EU Parliament delegation. Dunnett provided an overview of the key concerns and recommendations of European industry in China as reflected in the Chamber’s last Position Paper. The discussion and Q&A session focused on a variety of topics, from the structural issues impacting the Chinese economy and the expectations on the Fifteenth Five-Year Plan, to Intellectual Property Rights (IPR) protection, E-Commerce and consumer trends in China. Both sides also discussed the development trajectory of Artificial Intelligence (AI) technologies, strategies and policies in China, with Chamber representatives advocating for further EU-China exchanges with an aim to develop harmonised AI governance and safety frameworks.
(Music)
RUI: On 25th March, the European Parliament and Council of the EU agreed on a reform of the European Customs Union, which will include provisions to address challenges brought on by the growth in e-commerce.
XINHE: The new agreement will establish an EU Customs Authority which will, among other duties, manage an integrated Customs Data Hub for customs operations in the EU. The customs exemption on parcels below 150 euros—a rule that was previously used by e-commerce companies to ship relatively low-value goods without incurring duties—was also removed. These new rules will allow member countries to impose fines on e-commerce companies, which import non-compliant goods into the European Union.
This comes on the heels of multiple investigations into Chinese and other foreign e-commerce companies, which were alleged to have imported non-compliant and dangerous goods into the EU.
(Music)
RUI: Join the European Chamber’s launch event for its latest publication, Exporting Control: China’s New Strategic Toolkit, on 14th April 2026.
XINHE: The report focuses on the development of China’s export control regime and future scenarios in which this evolving toolkit may be applied to influence strategic competition. The event will feature a presentation by the Chamber’s President, Jens Eskelund, followed by a panel discussion on the main findings of the report.
RUI: You can find more information by visiting the link in the description.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s January-February foreign direct investment;
- China’s January-February industrial production;
- EU Trade Commissioner’s Remarks ahead of WTO Summit in Cameroon; and
- China’s revised conduct standards for leaders of state-owned enterprises.
Listeners are also invited to join a breakfast roundtable with Eurasia Group’s Wang Dan in Beijing on 8th April, to hear her insights on China’s economic outlook.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s Foreign Direct Investment (FDI) Utilisation January – February 2026
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2026/art_8f9a848b79ef478f8cf75d540be2bf3b.html
China’s Industrial Production January – February 2026
https://www.stats.gov.cn/sj/zxfb/202603/t20260316_1962782.html
EU Trade Commissioner’s Remarks ahead of WTO Summit in Cameroon
https://www.euractiv.com/news/eu-demands-serious-reform-of-the-wto-to-stop-flood-of-chinese-exports/
China’s revised conduct standards for leaders of state-owned enterprises
https://english.news.cn/20260322/d4a0a141981445ed860a66f1940d7736/c.html
https://english.news.cn/20260323/727dfe1b8f8549d18e332d71ff33fd4c/c.html
https://www.scmp.com/news/china/politics/article/3347347/chongqing-mayor-under-investigation-chinas-anti-corruption-crackdown-gathers-pace?module=top_story&pgtype=section
Breakfast Roundtable with Wang Dan, Eurasia Group | China’s Economic Outlook: Consumption, Property and Structural Shifts
https://www.europeanchamber.com.cn/en/upcoming-events/29016/Breakfast_Roundtable_with_Wang_Dan_Eurasia_Group_China_s_Economic_Outlook_Consumption_Property_and_Structural_Shifts
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 25th March 2026.
(Music)
RUI: China received over 161 billion yuan in foreign direct investment, or FDI, between January and February 2026.
XINHE: This represents a drop of 5.7 per cent year-on-year, slightly larger than the 5.6 per cent drop recorded a month prior. FDI into high-tech industries continued to increase with 39.2 per cent of total FDI, or 63.21 billion yuan, between January and February being invested in these sectors. This represents an 8.5 per cent jump compared the same period last year. Similar to last month’s figures, FDI into R&D and design services and computer and office equipment manufacturing were again the strongest subsectors, with respective increases of 171.8 per cent and 84.1 per cent year-on-year. By country, investment from Canada surged in February, increasing by 210 per cent year-on-year.
(Music)
RUI: Production at industrial enterprises above the designated size in China expanded by 6.3 per cent in the January to February period, the highest rate in three months.
XINHE: The manufacturing industry saw strong growth of 6.6 per cent year-on-year, while the mining industry expanded at 6.1 per cent year-on-year. Production expanded in 35 out of the 41 major industrial subsectors in the January to February period. Particularly strong growth was recorded in computer, communication and other electronic equipment manufacturing, at 14.2 per cent year-on-year, and electrical machinery manufacturing, at 8.9 per cent year-on-year.
The automobile manufacturing sector performed weakly, with overall production dropping 9.9 per cent in the January to February period. Production of new energy vehicles, previously a driver of growth, declined by 13.7 per cent year-on-year. However, this could be a positive sign given that the sector has suffered from unsustainable competition driven by overproduction.
(Music)
RUI: EU Commissioner for Trade and Economic Security Maroš Šefčovič is set to raise European concerns about China’s surging exports and industrial overcapacity at the upcoming World Trade Organization—or WTO—talks in Cameroon this Thursday.
XINHE: At a press conference on Monday, Šefčovič said the WTO requires “serious reform”, noting that significant shifts in the global trade environment have created the need for changes to members’ rights and obligations with the aim of ensuring that issues like overcapacity, unlevel-playing fields, and non-market policies can be addressed adequately.
Šefčovič highlighted the need for new governance models to address longstanding limitations in the WTO’s dispute settlement system and indicated that the EU would look to bring more countries into the Multi-Party Interim Appeal Arbitration Arrangement as a complementary mechanism.
(Music)
RUI: China has issued revised regulations on conduct standards for leaders of state-owned enterprises—or SOEs—to strengthen oversight mechanisms with the aim of preventing corruption.
XINHE: The updated rules, originally introduced in 2009 and recently revised by the Communist Party of China’s Central Committee and State Council, apply to leaders across wholly state-owned, state-controlled, and state-influenced enterprises, including financial firms. The regulations mandate annual reporting, regular Party-led oversight, and the integration of audit and regulatory supervision. Special provisions address anti-risk measures for overseas operations and tighter exit controls for departing leaders.
(Music)
RUI: Join the European Chamber’s breakfast roundtable with Dr Wang Dan, China Director at Eurasia Group and former Chief Economist at Hang Seng Bank China.
XINHE: At this breakfast roundtable, Dr Wang Dan will discuss the structural changes currently reshaping China’s economic trajectory, exploring the complex interplay between weakening domestic demand and persistent industrial strength. The session will examine how these dynamics differ from previous growth cycles driven by investment and the property sector, and what they mean for foreign businesses operating in an increasingly differentiated market environment.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s 15th Five-year Plan;
- China’s January-February retail sales of consumer goods;
- 2026 fiscal policy priorities; and
- EU sanctions two Chinese tech companies.
Listeners are invited to attend a breakfast roundtable with Andrew Polk on 25th March in Beijing, to hear his insights into the ‘Two Sessions’ and the 15th Five-year Plan.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s 15th Five-Year Plan
https://www.gov.cn/yaowen/liebiao/202603/content_7062633.htm
China January-February 2026 Retail Consumer Goods Sales
https://www.stats.gov.cn/sj/zxfbhjd/202603/t20260316_1962786.html
2025 Ministry of Finance Execution Report
https://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/202603/t20260317_3985436.htm
EU sanctions two Chinese tech companies
https://www.consilium.europa.eu/en/press/press-releases/2026/03/16/cyber-attacks-against-the-eu-and-its-member-states-council-sanctions-three-entities-and-two-individuals/
Breakfast Roundtable with Andrew Polk
https://www.europeanchamber.com.cn/en/upcoming-events/29000/Breakfast_Roundtable_with_Andrew_Polk_Policy_Signals_from_the_Two_Sessions_and_the_15th_Five_Year_Plan
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 18th March 2026.
(Music)
RUI: China’s 15th Five-Year Plan was released on 13th March, after being approved by the 2026 National People’s Congress on 12th March.
XINHE: The 15th Five-year Plan displays a high degree of policy continuity with the previous five-year plan. Frontier technologies remain a focus area with the development and use of artificial intelligence highlighted throughout. Like the 14th Five-Year Plan, the 15th Five-Year Plan includes a call for foreign-invested enterprises to receive national treatment. The plan also calls upon lawmakers to rectify regulations that fail to comply with the Foreign Investment Law, a positive sign that the Chinese Government will step up efforts to ensure foreign companies can compete on a level playing field.
The plan’s increased focus on self-reliance is concerning for European businesses given the challenges foreign companies in sectors targeted by past self-reliance initiatives have faced. The introduction of New Quality Productive Forces in 2023—the apparent successor to the Made in China 2025 industrial policy initiative—marked a significant expansion of China’s ambitions to develop indigenous technologies across a wider range of sectors. The European Chamber will continue advocating to ensure that China’s self-reliance drive does not undermine the promise of national treatment for foreign-invested enterprises.
(Music)
RUI: Retail sales of consumer goods grew 2.8 per cent year-on-year between January and February 2026.
XINHE: This represents an increase from the 0.9 per cent growth rate registered in December 2025. Overall growth continues to be dragged down by automobile sales which dropped 7.3 per cent year-on-year in the January to February period. Excluding automobiles, retail sales growth would have come in at 3.7 per cent. Sales of petroleum and its products, and building and decoration materials also struggled in January and February, decreasing by 9.7 per cent and 2.2 per cent year-on-year respectively.
Online sales of consumer goods increased by 10.3 per cent year-on-year in the January to February period, making up 24.2 per cent of all retail sales of consumer goods in China.
(Music)
RUI: The Ministry of Finance released its 2025 execution report on 17th March and laid out key priorities coming out of the 2026 ‘Two Sessions’ and the 15th Five-Year Plan.
XINHE: The 2026 fiscal outlook centres on five key areas: boosting domestic demand, cultivating new growth drivers, advancing technological self-reliance, safeguarding people’s livelihoods, and promoting China’s green transformation. Ultra-long-term special treasury bonds will continue to be allocated for major infrastructure projects, while a comprehensive package of fiscal and financial policies will be released, aimed at stimulating private investment and consumer spending. The ministry will also refine its negative list management for special-purpose bonds and expand a pilot programme allowing some local governments to self-review and self-issue such bonds. The pilot, which began in late 2024, is currently active in 10 provinces and regions including Beijing. On the social side, it is intended that fiscal investment in education, healthcare and pensions will be increased, and a childcare subsidy system introduced in 2025 will be fully implemented.
(Music)
RUI: On 16th March, the Council of the European Union imposed sanctions on two Chinese companies responsible for cyber-attacks carried out against EU Member States.
XINHE: The two companies now face an asset freeze and EU citizens and companies are forbidden from engaging in business and providing funds to the two companies. The two founders of one of the companies were also individually sanctioned and put on a no-travel list. One Iranian company was also subject to the same sanctions.
(Music)
RUI: Join the European Chamber’s breakfast roundtable with Andrew Polk, Co-Founder and head of economic research at Trivium China, on 25th March in Beijing.
XINHE: At this breakfast roundtable, Andrew Polk will discuss conclusions from China’s annual ‘Two Sessions’ and the recently released 15th Five-year Plan, both of which provide insights into Beijing’s policy priorities and long-term development trajectory.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s February Price Indices;
- 2026 Government Work Report; and
- China’s January and February Foreign Trade Data.
Listeners are also invited to attend the European Chamber’s events on the 2026 Two Sessions in Beijing (or online) and in Shanghai.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s CPI in February 2026
https://www.stats.gov.cn/sj/zxfb/202603/t20260309_1962732.html
China’s PPI in February 2026
https://www.stats.gov.cn/sj/zxfb/202603/t20260309_1962729.html
2026 Report on the Work of the Government
https://www.gov.cn/lianbo/fabu/202603/content_7060774.htm
January – February 2026 Foreign Trade Data
http://www.customs.gov.cn/customs/2026-03/10/article_2026031009440276400.html
http://www.customs.gov.cn/customs/2026-03/10/article_2026031012080948428.html
http://www.customs.gov.cn/customs/2026-03/10/article_2026031009440193461.html
Two sessions events
https://www.europeanchamber.com.cn/en/upcoming-events/28859/_Hybrid_2026_Two_Sessions_Redefining_China_s_Path
https://www.europeanchamber.com.cn/en/upcoming-events/28784/Two_Sessions_2026_Navigating_China_s_New_Development_Blueprint_in_2026
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 11th March 2026.
(Music)
RUI: China’s Consumer Price Index—or CPI—rose by 1.3 per cent year-on-year in February 2026, the fastest pace in over a year.
XINHE: This surge was in large part driven by an increase in the prices for food products and services, which rose 1.7 per cent and 1.6 per cent year-on-year respectively. Excluding a brief slowdown in January, food price inflation has been driving a recent upward trend in the CPI across recent months. In February alone, increases in the prices for food, tobacco, alcohol and dining out were responsible for 31.5 per cent of the overall increase in the CPI. Five of the seven other major categories also saw increases, most notably daily necessities and services, which recorded a 2.8 per cent jump in prices.
(Music)
RUI: China’s Producer Price Index—or PPI—fell by 0.9 per cent year-on-year, the slowest pace of decline since July 2024.
XINHE: February marks the third consecutive month of slowing PPI deflation, narrowing from negative 2.2 per cent year-on-year in November 2025 to negative 0.9 per cent year-on-year in February 2026. This is in part a result of a slowdown in deflation for the means of production—a category that includes raw materials—which registered a 0.7 per cent decrease year-on-year in February.
While this is a positive reflection of the government’s efforts to combat deflation, falling prices remain in many product categories. In February, prices in the mining industry fell by 5.3 per cent year-on-year, the overall price of consumer goods decreased by 1.6 per cent year-on-year and the price of clothing contracted by 1.8 per cent year-on-year.
(Music)
RUI: On 5th March China released the Report on the Work of the Government at the 2026 meeting of the National People’s Congress.
XINHE: China set a lower growth target of between 4.5 and five per cent, an acknowledgement of the country’s slowing economy. Notably, the report includes stronger language on addressing ‘involution-style competition’, suggesting that government efforts to combat underlying structural issues in China’s economy will continue. The report also mentions the need to boost imports, a topic repeatedly raised by China’s trading partners, including the European Union.
(Music)
RUI: The value of exports from China to the rest of the world surged between January and February 2026, jumping 21.8 per cent year-on-year according to data released by the General Administration of Customs on 10th March. Imports to China also increased 19.8 per cent year-on-year in the same period.
XINHE: This surge was in part driven by strong exports in high tech industries. In value terms, exports of integrated circuits rose by 72.6 per cent and automobiles by 67.1 per cent. Notably, exports of lower-value-added items also rose in value terms, with furniture exports in particular increasing by 24.7 per cent.
By region, exports from China to ASEAN and the European Union rose by 29.4 per cent and 27.8 per cent year-on-year respectively. Amid shifting tariff regimes and other tensions, exports to the US continued to fall, dropping 11 per cent year-on-year.
China’s imports of some high-tech products, notably integrated circuits—which includes semiconductors—and automatic data processing equipment saw sharp increases, rising 39.8 per cent and 68.7 per cent year-on-year respectively.
(Music)
RUI: The 2026 Two Sessions—China’s signature annual political event—is drawing to a close in Beijing, with the final version of the 15th Five-year Plan expected to be released shortly after.
Join us in Beijing or online on 13th March, and in Shanghai on 17th March for two events during which experts will discuss key takeaways from the Two Sessions and their implications for businesses and China’s economy.
XINHE: You can find more information visiting the link in the description.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s February Purchasing Managers’ Index (PMI);
- January Inbound Foreign Direct Investment (FDI);
- German Chancellor Merz’s visit to China;
Listeners are also invited to join the European Chamber’s events to celebrate the International Women’s Day from 5th March to 7th March.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s February Purchasing Manager’s Index
https://www.stats.gov.cn/sj/zxfb/202603/t20260304_1962699.html
China Inbound FDI January 2026
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2026/art_e3ade82446a440e698ae1e89eeedafb8.html
German Chancellor Merz’s visit to China
https://www.gov.cn/yaowen/liebiao/202602/content_7059634.htm
European Chamber celebrates International Women’s Day
https://mp.weixin.qq.com/s/mS3EVS7CqpD0epsAtGVf-g?token=2013255733⟨=zh_CN
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 4th February 2026.
(Music)
XINHE: China’s Manufacturing Purchasing Manager’s Index, or PMI, dropped by 0.3 percentage points to 49 in February, indicating a contraction in the sector.
RUI: The decline was driven in part by slowing production activity, with the respective PMI falling by 1 percentage point to 49.6. Fewer incoming new orders also contributed to an overall contraction, with the PMI for new export orders in particular falling by 2.8 percentage points to 45.
The PMI for factory prices remained in expansion territory for a second consecutive month in over a year, hovering at 50.6 points. This is a positive sign that the government’s ongoing efforts to combat price deflation and address unsustainable competition may be having an impact.
Larger enterprises fared significantly better in February, with their respective PMI increasing by 1.2 percentage points to 51.5, indicating expansion. By contrast, the PMIs for small and medium-sized enterprises fell by 2.6 and 1.2 percentage points to 44.8 and 47.5 respectively, both well into contraction territory.
(Music)
XINHE: The non-manufacturing PMI for February edged up slightly by 0.1 points to 49.5, yet remained in contraction territory.
RUI: This increase was mainly driven by the service sector, which saw its PMI rise by 0.2 points to 49.7. Businesses in this sector share a particularly positive outlook for market development over the coming months – the business activity expectation PMI, which tracks overall confidence, hovered at 55 points in February.
The construction sector contracted for a second consecutive month, with its respective PMI falling 0.6 percentage points to 48.2.
(Music)
XINHE: China saw 92 billion yuan in inbound foreign direct investment, or FDI, in January 2026, a 5.6 per cent decrease year-on-year.
RUI: While overall FDI has been falling, investment into high-tech sectors has been continuously increasing, up 0.6 per cent to 33.75 billion yuan. In January 2026, 36.7 per cent of investments flowed into high-tech sectors, an increase of 2.3 per cent over January 2025. By subsector, FDI into R&D and design services and computer and office equipment manufacturing surged, increasing 175.1 per cent and 82.4 per cent respectively.
In January, FDI from Germany and Switzerland registered year-on-year increases of 86.6 per cent and 57.4 per cent respectively. Investment from Germany in particular hit a four-year high in 2025 and continued strongly in early 2026.
(Music)
XINHE: German Chancellor Friedrich Merz visited China from 25th to 26th February.
RUI: Chancellor Merz met with Chinese President Xi Jinping on Wednesday, 25th February for a series of talks on a wide range of topics from climate policy to trade relations. Before the meeting, Merz had aired concerns about the unlevel playing field foreign companies face in China as well as China’s export controls on rare earth elements.
Merz described the talks with President Xi as positive. Both sides emphasised the importance of EU-China cooperation on the international stage and a need to safeguard fair standards in global trade.
(Music)
XINHE: Join the European Chamber this week in celebrating International Women’s Day on 5th March.
RUI: This year’s International Women’s Day will be celebrated with the theme “rights, justice, and action for all women and girls”. The European Chamber’s Beijing, Shanghai, Shenyang, Southwest China and Tianjin chapters will all be hosting Women’s Day events from 5th March to 7th March.
XINHE: More information can be found on the European Chamber’s website – just follow the link in the show notes.
(Music)
RUI: Thanks for listening, and don’t forget to tune in next week.
This episode contains segments on:
- China’s CPI and PPI in January 2026;
- EU Launches In-depth probe into Chinese Wind Turbine Maker; and
- Li Qiang Visit to Jiangxi.
The European Chamber’s Business Confidence Survey is still underway. If you are eligible, please fill in the survey before the survey closes.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s CPI in January 2026
https://www.stats.gov.cn/sj/zxfb/202602/t20260211_1962588.html
China’s PPI in January 2026
https://www.stats.gov.cn/sj/zxfb/202602/t20260211_1962587.html
EU Launches In-depth probe into Chinese Wind Turbine Maker
https://ec.europa.eu/commission/presscorner/detail/en/ip_26_265
Li Qiang Visit to Jiangxi
https://www1.xinhuanet.com/politics/20260211/0ee5f9823f9b49cf90a86cc5462b3ceb/c.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 11th February 2026.
(Music)
RUI: China’s Consumer Price Index—or CPI—increased 0.2 year-on-year in January 2026, slowing down from the previous month’s 0.8 per cent increase.
XINHE: This slowdown can in part be attributed to lower food price inflation. In previous months, price increases in this category had been partially responsible for driving up the CPI to its highest level in more than a year. In January 2026, food prices in general remained unchanged, with several food subcategories posting decreases. Prices in most other major categories rose, with non-food prices, consumer goods prices, and services prices all seeing a 0.2 per cent year-on-year increase.
(Music)
RUI: In January 2026, the Producer Price Index—or PPI—fell by 1.4 per cent year-on-year, a slowdown compared to December’s 1.9 per cent decrease.
XINHE: January’s data represents the lowest PPI decrease in over a year, however the figure remains in negative territory. This continued deflationary pressure can in part be explained by decreasing prices in the mining industry, which saw an 8.1 per cent price drop year-on-year. The price of consumer goods also fell by 1.7 per cent, contributing a little less than 25 per cent to the overall decline in PPI in January. This was driven by a decrease in food prices, which dropped 1.9 per cent year-on-year in January.
The latest readings show that China is making slow progress in dealing with persistent deflationary pressure and suppressed demand. While policies to stimulate consumption will alleviate some of these issues, pursing more permanent solutions to address the imbalance between supply and demand is the most sustainable way to fight deflation and return to healthy price growth.
(Music)
RUI: The European Commission has launched an in-depth investigation into Goldwind Science & Technology Co Ltd under the Foreign Subsidies Regulation, or FSR.
XINHE: The probe, announced on 3rd February, follows an initial investigation that began in April 2024 and examined multiple companies in the EU wind sector. The Commission found indications that Goldwind may have received foreign subsidies—including grants and preferential tax measures—that distort competition in the EU’s internal market.
The move has drawn sharp criticism from Chinese authorities. A Ministry of Commerce spokesperson urged the EU to, quote “immediately correct its erroneous practices”, unquote, and exercise caution when deploying the FSR investigation tool. Goldwind has stated that it will fully cooperate with the investigation. This case reflects broader tensions in EU-China trade relations, particularly around the Made in China 2025 initiative, which has historically prompted defensive measures from the EU in sectors in which China has achieved technological leadership, such as wind turbines.
(Music)
RUI: On 9th and 10th February,Chinese Premier Li Qiang conducted an inspection tour of Jiangxi during which he emphasised the importance of the rare earths industry to advanced manufacturing and the green transition.
XINHE: China’s dominance in the global supply ofrare earth elements—or REEs—was thrust into the spotlight last year after China introduced export controls on certain REEs. The move led to significant supply chain disruptions for some European companies, prompting the EU to take a more proactive approach to addressing strategic dependencies on China. Premier Li Qiang’s emphasis on the REE sector during his Jiangxi trip demonstrates China’s desire to remain a world leader in the sector.
(Music)
RUI: The European Chamber’sBusiness Confidence Survey 2026—or BCS—is still underway.
XINHE: The BCSis oneof the most effective ways for European Chamber members to have their say in Chamber messaging.The survey helps the European Chamber identify advocacy priorities for the year ahead, and the data collected is widely used by both Chinese and European stakeholders. One primary contact from all eligible member companies will have received details to access the anonymous survey.
RUI: If you or a colleague are eligible to complete the BCS, please make sure you do so as soon as possible before the survey closes.
RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s January Purchasing Managers’ Index (PMI);
- 2025’s industrial profits;
- 2025’s inbound foreign direct investment; and
- British Prime Minister Keir Starmer’s visit to China.
The January/February issue of EURObiz is available to download from the Chamber’s website here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China PMI Performance in January 2026
https://www.stats.gov.cn/sj/zxfb/202601/t20260131_1962416.html
China Industrial Profits January-December 2025
https://www.stats.gov.cn/sj/zxfb/202601/t20260127_1962382.html
China Inbound FDI January-December 2025
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2026/art_e903fdb8a51742269e6d83adfc7e7e66.html
British Prime Minister Keir Starmer visits China
https://www.gov.cn/lianbo/202601/content_7056654.htm
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 4th February 2026.
(Music)
RUI: Data released by the National Bureau of Statistics showed that China’s official manufacturing purchasing managers’ index—or PMI—entered contraction territory in January 2026. The non-manufacturing PMI, which includes services and construction, fell to a 37-month low in January.
XINHE: The official manufacturing PMI declined to 49.3, down 0.8 points from December 2025. This downturn was driven in part by a contraction in new orders as well as softer demand from abroad. Larger firms fared better in January, with their respective PMI declining only slightly to 50.3, above the critical threshold of 50 that marks expansion. The PMI for small and medium-sized enterprises remained in contraction territory.
A positive reflection of the Chinese authorities’ efforts to combat deflationary pressures, the PMI for factory gate prices rose to a 28-month high indicating moderate price increases. This rise was in part driven by a surge in prices for some input raw materials. China’s economy has been struggling with factory gate deflation caused by combination of unhealthy competition and weak domestic demand.
China’s non-manufacturing PMI fell to 49.4 in January 2026, the lowest level in 37 months. This was mainly the result of a sharp contraction in construction activity, which fell by four points amid steep declines in new construction orders. The PMI for the service industry also fell slightly in January, remaining in contraction territory for a third consecutive month.
(Music)
RUI: In 2025, profits of industrial firms above the designated size increased by 0.6 per cent year-on-year to CNY 739.8 trillion, marking the first annual increase since 2021.
XINHE: Profits in the manufacturing and utility sectors, which make up majority of total industrial profits, grew by five per cent and 9.4 per cent year-on-year respectively. Mining industry profits fell by 26.2 per cent amid a prolonged commodity slump.
Several sectors managed to reverse profit declines amid efforts by Chinese authorities to rein in price wars. Notably, the automotive industry achieved a 0.6 per cent year-on-year profit increase in 2025.
(Music)
RUI: Data released by the Ministry of Commerce on 23rd January showed that China’s inbound foreign direct investment—or FDI—totalled CNY 748 billion in 2025, a decrease of 9.5 per cent year-on-year.
XINHE: The distribution of inbound FDI continues to shift toward the service sector, which received 72.9 per cent of all investments, up from 70.7 per cent in 2024. The share of investments into the manufacturing sector, which fuelled China’s early growth, declined to 24.8 per cent of total inbound FDI in 2025.
High-tech industries received a third of inbound investment, with FDI into the e-commerce services and medical devices and equipment industries jumping 75 per cent and 42.1 per cent respectively.
(Music)
RUI: British Prime Minister Keir Starmer met with Chinese President Xi Jinping as part of a four-day visit to China taking place between 28th January and 31st January.
XINHE: Starmer’s visit is the first by a British prime minister since Theresa May travelled to Beijing in 2018. During the state visit, China announced 30-day visa-free access for British citizens and the removal of Chinese tariffs on whisky imported from the United Kingdom.
Starmer joined a growing list of heads of state, including Canadian Prime Minister Mark Carney and French President Emmanuel Macron, who have visited China in recent months. German Chancellor Friedrich Merz is scheduled to visit in late February.
(Music)
RUI: The 90th issue of the Chamber’s bimonthly EUROBiz Magazine focuses on emerging opportunities in China’s night-time economy.
XINHE: The issue also contains articles dissecting how companies can navigate China’s rapidly shifting artificial intelligence landscape as well as an executive summary of the Chamber’s Shanghai Position Paper 2025/2026.
RUI: Download the latest issue from the Chamber’s website for free to learn more.
(Music)
XINHE: Thanks for listening, and don’t forget to tune in next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s December foreign trade data;
- Q4 GDP;
- December’s macroeconomic data; and
- The State Council meeting on boosting consumption
The Chamber is conducting its annual Business Confidence Survey until 13th February. Members are invited to fill in the survey, and those who complete the survey will be entered into a lucky prize draw.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
December 2025’s Foreign Trade Data
http://www.customs.gov.cn/customs/2025-12/14/article_2026011411285675333.html
http://www.customs.gov.cn/customs/2025-12/14/article_2026011411285532603.html
http://www.customs.gov.cn/customs/2025-12/14/article_2026011411285549251.html
China’s Q4 GDP Performance
https://www.stats.gov.cn/sj/zxfb/202601/t20260119_1962330.html
China’s December 2025’s Macroeconomic Data
https://www.stats.gov.cn/sj/zxfb/202601/t20260119_1962323.html
https://www.stats.gov.cn/sj/zxfb/202601/t20260119_1962329.html
State Council Meeting on Boosting Consumption
https://www.gov.cn/zhengce/202601/content_7054990.htm
https://www.stats.gov.cn/sj/sjjd/202601/t20260119_1962337.html
Transcript:
NOAH: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
NOAH: This episode was recorded on 21st January 2026.
(Music)
NOAH: China recorded a record USD 1.2 trillion trade surplus with the rest of the world in 2025, according to data published by the Chinese General Administration of Customs. Chinese exports grew by 5.5 per cent year-on-year, while imports from the rest of the world remained flat, registering 0.0 per cent growth in value terms, relative to 2024.
XINHE: China’s strong export growth was in part driven by a rise in exports to ASEAN and the EU, which grew by 13.4 per cent and 8.4 per cent year-on-year respectively in 2025. China’s strong export performance has also sparked concerns among key Chinese trade partners—including the EU and several of its member states—relating to the challenge that Chinese imports may pose to their industrial competitiveness.
Noah: By contrast, following bilateral trade tensions remaining high for much of the year, Chinese exports to the US fell by 20 per cent in 2025, compared to a year prior.
Disparity was also seen at the product level, with semiconductor and ship exports recording particularly strong growth, increasing by 26.8 per cent and 26.7 per cent year-on-year in value terms. Conversely, Chinese toy and furniture exports—two areas where the US has historically been a key market—declined by 12.7 per cent and 6.1 per cent year-on-year in value terms.
Xinhe: Imports to China from the rest of the world remained flat overall in 2025, recording 0.0 per cent growth relative to a year prior. At the product level, imports of high-tech products grew by 9.3 per cent in value terms. At the other end of the spectrum, Chinese imports of automobile vehicles and chassis sharply declined, falling by 39.7 per cent, with this a reflection of the fierce competition that companies operating in the sector—which is highly oversaturated—face.
(Music)
Noah: As a result of its strong export performance, China achieved its target of recording “around five per cent” GDP growth in 2025, as set out at the 2025 Two Sessions, hitting that target exactly.
XINHE: Growth was uneven throughout the year. China registered a significantly higher GDP growth rate in the first two quarters of 2025, coming in at 5.4 per cent and 5.2 per cent respectively. This compared to a rate of 4.8 per cent in Q3, and then 4.5 per cent in the final quarter of the year, as China recorded the its lowest quarterly GDP growth since Q1 2023.
(Music)
NOAH: Data released by China’s National Bureau of Statistics, on 19th January, shows China recorded strong industrial production growth in December 2025, with factory output increasing by 5.2 per cent compared to a year prior.
XINHE: Production output increased in 33 out of 41 surveyed sectors, with the computer, communication and other electronic equipment manufacturing sector, as well as the automobile manufacturing industry, seeing particularly strong growth of 11.8 per cent and 8.3 per cent respectively in the last month of the year.
By contrast, retail sales—which provide a general gauge of overall consumer confidence in the economy—grew by a more tepid 0.9 per cent year-on-year in December, the slowest monthly rate recorded since December 2022. This slowdown was in no small part due to a drop in the value of automotive sales.
(Music)
NOAH: At a State Council executive meeting on 16th January, Chinese Premier Li Qiang announced that the country’s authorities are currently in the process of drafting a five-year plan on expanding consumption, as well as an income growth plan for urban and rural residents. Their publication will marking the first time that the central government has published a standalone plane centred on either of these themes.
XINHE: The development follows there having long been a mismatch between supply and demand growth in the Chinese economy, with this having contributed to overproduction in key sectors, as well as falling factory gate prices.
(Music)
NOAH: The European Chamber launched its most important advocacy initiative, the Business Confidence Survey—or BCS—on 15th January.
XINHE: The BCS provides the most accurate picture of European business sentiment towards the China market and plays a key role in shaping the Chamber’s advocacy messaging for the coming year.
NOAH: February 13th is the last day to fill out the survey. Members that complete the survey will be entered into a lucky draw, with 12 prizes on offer.
(Music)
XINHE: Thanks for listening, and don’t forget to tune in next week.
NOAH: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China December Consumer Price Index (CPI) and Producer Price Index (PPI);
- EU to issue new minimum price plans for Chinese electric vehicles; and
- EU commission issues new guidelines for the Foreign Subsidies Regulation.
The Chamber will launch its annual Business Confidence Survey on 15th January. Members that complete the survey will be entered into a lucky draw to win prizes.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Consumer Price Index (CPI) in December 2025
https://www.stats.gov.cn/sj/zxfb/202601/t20260109_1962273.html
Producer Price Index (PPI) in December 2025
https://www.stats.gov.cn/sj/zxfb/202601/t20260109_1962272.html
EU to issue new minimum price plans for Chinese electric vehicles
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2026/art_8f8d94dc5bac4f94851fa9d1081e9883.html
https://policy.trade.ec.europa.eu/news/commission-issues-guidance-document-submission-price-undertaking-offers-battery-electric-vehicles-2026-01-12_en?utm_source=substack&utm_medium=email
EU commission issues new guidelines for the Foreign Subsidies Regulation
https://ec.europa.eu/commission/presscorner/detail/en/ip_26_43
Transcript:
NOAH: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
NOAH: This episode was recorded on 14th January 2026.
(Music)
NOAH: China’s consumer price index—or CPI—continued to increase in December, reaching the highest year-on-year growth rate since February 2023.
XINHE: Data released by the National Bureau of Statistics on 9th January showed a 0.8 per cent year-on-year increase for the month of December in overall consumer prices. This growth can mostly be attributed to a rise in consumer goods prices, while service price growth continued to trail behind. Across the eight major categories that factor into the CPI, six saw price increases, including food, tobacco and alcohol; daily necessities and services; and medical care. However, persistent weakness in the real estate sector continued to weigh down the CPI with housing prices falling by 0.2 per cent year-on-year.
Despite improvements in the final months of 2025, the CPI for the entirety of 2025 stagnated at the same level as 2024.
(Music)
NOAH: The Producer Price Index—or PPI—for industrial products remained in negative territory in December but declined at the slowest rate since August 2024.
XINHE: The PPI for industrial products fell by 1.9 per cent year-on-year, compared to the 2.2 per cent year-on-year the previous month. The mining industry saw its output prices decline most sharply, weighed down by weak commodity demand. Other industries saw either price stagnation or modest declines.
China’s efforts to rein in unsustainable competition and boost consumption through initiatives such as consumer-goods-trade-in programmes have so far yielded only a modest effect on persistent deflation. One main factor is the troubled housing market, which continues to drag down prices in real estate-related sectors and weigh on consumer sentiment.
(Music)
NOAH: On 14th January, the EU and China agreed on a process for Chinese battery electric vehicle producers to submit price undertaking offers as an alternative to paying the tariffs imposed on Chinese EV producers in October 2024.
XINHE: The guidance document accompanying the release stipulates that companies must propose minimum import prices in their price undertaking offer that offset any harm caused by subsidies, delivering an equivalent effect to the existing tariffs. Companies are also required to provide information about their sales channels to allow the European Commission to monitor undertaking compliance. Producers can also commit to voluntary import limits and future investments in the EU, which will be considered by the Commission when assessing whether to accept a company’s price undertaking offer. If an offer is accepted, tariffs would be removed.
(Music)
NOAH: On 9th January the European Commission published new guidelines for the Foreign Subsidy Regulation—or FSR—that clarify how the Commission determines whether foreign financial assistance has caused distortions in the EU’s internal market.
XINHE: In particular, the new guidelines lay out in detail how the Commission assesses whether a foreign subsidy strengthened a company’s competitive position in the EU. Regarding public procurement procedures, the new document provides guidance on how the EU assesses whether subsidies affected the terms of a tender. Some companies had previously criticised the lack of transparency in this process.
The FSR was launched in 2023 and—although the regulation itself is country agnostic—most of the investigations launched under it so far have targeted Chinese companies.
(Music)
NOAH: The European Chamber will be launching its annual Business Confidence Survey—or BCS— on 15th January. The BCS is the Chamber’s most important advocacy initiative.
XINHE: The survey helps build the most accurate picture of business sentiment across European industry in China, allowing the Chamber to shape its messaging for the year ahead more effectively.
NOAH: The survey will remain open until 13th February. Members that complete the survey will be entered into a lucky draw to win prizes.
(Music)
XINHE: Thanks for listening, and don’t forget to tune in next week.
NOAH: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s December PMI;
- January–November industrial profits;
- Hainan Free Trade Port customs closure; and
- The revised Foreign Trade Law.
The November/December issue of EURObiz is available to download from the Chamber’s website here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China PMI Performance in December 2025
https://www.stats.gov.cn/sj/zxfbhjd/202512/t20251231_1962218.html
Industrial Profits January through November 2025
https://www.stats.gov.cn/sj/zxfb/202512/t20251227_1962158.html
Hainan Free Trade Port customs closure
https://english.www.gov.cn/news/202512/18/content_WS6943ac7dc6d00ca5f9a082cb.html
China adopts revised Foreign Trade Law
https://english.www.gov.cn/news/202512/27/content_WS694f542ec6d00ca5f9a084bc.html?utm_source=substack&utm_medium=email
https://www.mofcom.gov.cn/zcfb/dwmygl/art/2025/art_d71882d8e70e43e5a28f686c4f0b8db4.html
EURObiz magazine
https://www.europeanchamber.com.cn/en/publications-archive/1378/EURObiz_November_December_2025
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 7th January 2026.
(Music)
XINHE: Data released by the National Bureau of Statistics showed that China’s manufacturing activity surged in December, entering expansion territory for the first time since March. Non-manufacturing business activity also moved back into expansion territory after a brief contraction in November.
RUI: The manufacturing purchasing manager’s index—or PMI—for December 2025 increased by 0.9 percentage points to 50.1. This was mainly driven by a significant improvement in the outlook for large enterprises, which saw an increase in production activity and new orders. New export orders also improved after softening in October and November. Bucking the trend of a general improvement were small enterprises, which slid further into contractionary territory in December.
The official non-manufacturing PMI returned to growth in December, driven by a strong recovery in the construction sector, which saw the largest month-on-month improvement since January 2025. The services sector also saw a slight increase in PMI, albeit remaining in contraction territory.
(Music)
XINHE: Industrial Profits in November declined by 13.1 per cent year-on-year, dragging down overall growth for the January through November period to just 0.1 per cent according to data released by the National Bureau of Statistics on 27th December.
RUI: November’s year-on-year decline was more pronounced than October, which saw a 5.5 per cent year-on-year decline. The mining sector continued to drag down overall growth, posting a 27.5 per cent decrease year-on-year. The manufacturing and utilities sectors, which make up the majority of industrial profits, saw increases of five per cent and 8.4 per cent respectively. Compared to the previous month, growth in the manufacturing and utilities sectors, however, was weaker, which was reflected in the lower headline figure for November.
(Music)
XINHE: On 18th December, Hainan Island was officially designated a special customs supervision zone, creating what China is calling the world’s largest free trade port by area.
RUI: Under the new regulations, the number of items that can be imported to the island tariff-free was expanded from 1,900 to 6,600, now covering 74 per cent of product categories. Goods shipped from the Hainan Free Trade Port to other parts of the Chinese mainland will be subject to customs checks, and applicable tariffs unless at least 30 per cent of value is added to its original price within Hainan through some form of processing.
(Music)
XINHE: On 27th December, the National People’s Congress passed a revised version of China’s Foreign Trade Law, focusing on expanding intellectual property protection and strengthening the government’s ability to respond to trade disputes.
RUI: While previously only goods and services were covered, the new revisions now include intellectual property-related trade, allowing China to impose sanctions for IP infringements. The law also creates a stronger legal basis for the Chinese Government to impose trade sanctions against countries restricting Chinese exports. The authority of the government to restrict exports of critical goods such as rare earths was also strengthened.
(Music)
XINHE: The 89th issue of the Chamber’s bimonthly EURObiz magazine focuses on the ongoing challenges in dealing with supply chain dependencies and features highlights of the Chamber’s 2025 Annual Conference.
RUI: This issue contains a wide range of articles, from how AI is transforming the manufacturing sector in China, to a deep dive into how communications teams worked to contain a recent high-profile public relations crisis.
XINHE: Download the latest issue for free from the Chamber’s website to learn more.
(Music)
XINHE: Thanks for listening, and don’t forget to tune in next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Central Economic Work Conference
- China’s November macroeconomic data: retail sales and industrial production
- China’s trade surplus in the first 11 months of 2025
The European Chamber launched a report Dealing with Supply Chain Dependencies: Challenges and Choices, which is free to download from the Chamber’s official website.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Central Economic Work Conference
https://www.gov.cn/yaowen/liebiao/202512/content_7050963.htm?utm_source=substack&utm_medium=email
Retail sales of consumer goods
https://www.stats.gov.cn/sj/zxfb/202512/t20251215_1962071.html
Industrial production statistics
https://www.stats.gov.cn/sj/zxfb/202512/t20251215_1962074.html
Real Estate Market Development
https://www.stats.gov.cn/sj/zxfb/202512/t20251215_1962072.html
China’s trade surplus
https://www.wsj.com/economy/trade/chinas-exports-rebound-in-november-97f24e06
The Chamber’s latest report: Dealing with Supply Chain Dependencies: Challenges and Choices
https://www.europeanchamber.com.cn/en/dealing-with-supply-chain-dependencies
Transcript:
RUI: Hello and welcome to China ShortCuts,
Robbie: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 17th December 2025.
(Music)
Robbie: 2025’s Central Economic Work Conference took place in Beijing between 10th–11th December. The annual conference sees China’s leaders deliberating on the country’s economic policies and setting priorities for the coming year, including the growth target for 2026, the budget deficit and debt issuance. The targets decided upon are expected to be formally announced at next year’s Two Sessions.
Rui: A readout of the meeting published by state media outlet Xinhua noted that the government would strive to continuously expand domestic demand and optimise supply in 2026, as well as that there would be ‘in-depth implementation of special actions to boost consumption’.
Robbie: Adhering to domestic demand as the driving force and building a strong domestic market was listed as the first economic task for 2026, while adhering to innovation-driven development and accelerating the cultivation and strengthening of new growth drivers featured second.
(Music)
Rui: Retail sales of consumer goods increased by 1.3 per cent year-on-year in November, according to data published this week by the Chinese National Bureau of Statistics. Monthly retail sales reached Chinese yuan (CNY) 4,390 billion in November, with year-to-date sales of consumer goods standing at CNY 45,607 billion, an increase of 4 per cent compared to the same period last year.
Robbie: Posting a 1 per cent increase, sales growth in urban areas was relatively slow compared to sales in rural areas, which grew by 2.8 per cent.
Rui: Online sales figures recorded strong growth of 9.1 per cent year-on-year, hitting CNY 14,458 billion, aided by a record-long sales period for Singles’ Day.
(Music)
Robbie: Industrial production growth continued to outpace retail growth in November, increasing by4.8 per cent year-on-year, the slowest rate of increase since August 2024. The mining industry performed relatively strongly registering a growth rate of 6.3 per cent, while manufacturing and utilities grew by 4.6 and 4.3 per cent respectively.
Rui: At the sectoral-level, industrial growth was registered in 30 out of 41 industries. The value of production in the automotive industry increased by 11.9 per cent year-on-year, as did production in the railway, shipbuilding, aerospace and other transportation equipment; the production of chemical raw materials and products increased by 6.7 per cent, while electrical machinery and equipment manufacturing posted 4.4 per cent production growth.
Robbie: Cement production declined by 8.2 per cent and steel by 2.6 per cent. This can in part be attributed to ongoing weakness in China’s real estate sector, with figures published by the National Bureau of Statistics on 15th December showing total year-to-date investment in the sector down 15.9 per cent as of the end of November, while completed construction projects were down 18 per cent.
(Music)
Rui: China’s recorded trade surplus reached United States dollar (USD) 1.08 trillion during the first 11 months of 2025, making it the first country in recorded history to reach the USD 1 trillion milestone. Overall, Chinese exports grew by 5.4 per cent year-on-year between January and November, with exports of Chinese goods to the European Union up by 15 per cent compared to the previous year.
Robbie: This development follows long-standing producer price deflation in China, with factory gate prices having fallen for 38 consecutive months as of November 2025, as well as the renminbi depreciating by approximately 10 per cent relative to the Euro in 2025.
(Music)
Rui: To learn more about the dilemma that China’s global supply chain dominance has created for European companies, check out the Chamber’s latest thematic report, Dealing with Supply Chain Dependencies: Challenges and Choices. While EU companies remain committed to the Chinese market, the report finds that China’s outsized influence on supply chains is now resulting in negative outcomes for some foreign companies and third-country markets alike, which is pushing them to diversify away from China.
Robbie: China’s highly efficient industrial clusters have seen it become the world’s only manufacturing superpower and a cornerstone of global supply chains, essential for producing numerous products. However, for many companies, while cost and efficiency are still important considerations, other factors, including the need to ensure resilience and flexibility, are increasingly driving supply chain decision making.
Rui: The report can be downloaded for free on the European Chamber’s website.
Robbie: Thanks for listening, and don’t forget to tune in again next time.
Rui: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s industrial profits January-October;
- China’s November Purchasing Managers Index (PMI);
- French President Emmanuel Macron to visit China;
- European Chamber Flash Survey on China’s Export Controls;
Listeners are also invited to attend the European Chamber Annual Conference 2025: Gearing Up for the 15th Five-year Plan on 11th December in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Industrial Profits January – October
https://www.stats.gov.cn/sj/zxfb/202511/t20251127_1961933.html
November 2025 Purchasing Managers Index (PMI)
https://www.stats.gov.cn/sj/zxfbhjd/202511/t20251130_1961945.html
Macron to visit China
https://english.www.gov.cn/news/202512/01/content_WS692d5e2ec6d00ca5f9a07dc9.html
European Chamber Flash Survey on China’s Export Controls
https://www.europeanchamber.com.cn/en/press-releases/3757/european_chamber_survey_finds_one_in_three_looking_to_divert_sourcing_away_from_china_to_mitigate_impact_of_export_controls
European Chamber Annual Conference 2025: Gearing Up for the 15th Five-year Plan
https://www.europeanchamber.com.cn/en/upcoming-events/28359/European_Chamber_Annual_Conference_2025_Gearing_Up_for_the_15th_Five_year_Plan
Transcript:
RUI: Hello and welcome to China ShortCuts,
ROBBIE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 3rd December 2025.
(Music)
ROBBIE: China’s October industrial profits declined by 5.5 per cent year-on-year, the largest drop since June, according to data released by the National Bureau of Statistics on 27th November.
RUI: The dip dragged down overall growth for the January through October period to 1.9 per cent year-on-year, a deceleration compared to 3.2 per cent growth for the January through September period. The low headline figure continues to reflect falling profits in the mining sector, which saw a 27.8 per cent decline for the period. Manufacturing profits, which made up 75 per cent of total industrial profits for the first 10 months of the year, saw a 7.7 per cent year-on-year increase while utilities profits saw growth of 9.5 per cent.
The rise in industrial profits for the January to October period likely contributed to a slowdown in producer price deflation. China’s producer price index—or PPI—fell for the 37th consecutive month in October, but the pace of decline—2.1 per cent year on year—was the slowest since August 2024.
(Music)
ROBBIE: China’s manufacturing activity continued to contract in November according to the official Purchasing Managers Index—or PMI—released by the National Bureau of Statistics on 30th November.
RUI: The manufacturing PMI increased slightly by 0.2 percentage points to 49.2, remaining below the critical threshold of 50 which divides contraction from expansion. The increase was mainly driven by outlook improvements from small and medium-sized enterprises, while the outlook for large enterprises continued to deteriorate, falling 0.6 percentage points from October.
The non-manufacturing business index declined by 0.6 percentage points to 49.5, dipping below the expansion threshold for the first time since December 2022. The Statistics Bureau attributed the contraction to the real estate and residential services sectors, noting that other major service sectors saw an expansion.
(Music)
ROBBIE: French President Emmanuel Macron will arrive in China for a three-day state visit on 3rd December, according to an announcement by China’s Ministry of Foreign Affairs on Monday 1st December.
RUI: In the face of EU-China relations increasingly strained by trade tensions, Macron is expected to focus on achieving a more balanced and mutually beneficial trade relationship, with other top agenda points including innovation policy and how to stimulate Chinese domestic consumption. A statement announcing the visit posted by China’s State Council noted that closer cooperation with France will contribute to “promoting the healthy and stable development of China-EU relations.”
(Music)
ROBBIE: On 1st December the European Chamber released data from its flash survey on China’s export controls, finding that one in three respondents are looking to divert sourcing away from China to mitigate the controls’ impact.
RUI: “China’s export controls have increased the uncertainty felt by European businesses” and have elicited “strong responses from China’s trading partners,” according to Jens Eskelund, president of the European Chamber. The survey showed that, out of those impacted by China’s export controls, 43 per cent have not yet decided how to proceed, while 36 per cent of respondents are planning to develop capacity outside of China to mitigate the negative effects of the announced controls. One main concern European companies have is the long approval processes for granting export licences, with 40 per cent of respondents reporting that approvals by China’s Ministry of Commerce take longer than the promised 45 days. Another 41 per cent noted that they have generally received approvals within the expected 45 days, but still experienced supply chain disruptions as a result.
ROBBIE: To learn more about how China’s export controls are resulting in European companies adjusting their supply chain strategies, join us online on 10th December for the launch of the Chamber’s latest thematic report, Dealing with Supply Chain Dependencies: Challenges and Choices.
(Music)
ROBBIE: On 11th December the European Chamber will hold its 2025 annual conference in Beijing, focused on the 15th Five-year Plan.
RUI: The 15th Five-year Plan—set to be ratified in early 2026—will chart the course for the country’s economic and social development through 2030. With China now finalising the document, there is an opportunity to fine-tune its guiding principles in a way that enables a more open and mutually beneficial EU-China trade and investment relationship.
ROBBIE: Join us at this year’s annual conference where business leaders, economists, academics, and China experts will review key economic issues and industrial policies affecting European companies in China as well as explore where future opportunities lie during China’s 15th Five-year Plan period.
(Music)
RUI: Thanks for listening, and don’t forget to tune in again next week.
ROBBIE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- EU anti-dumping investigation into robotic lawnmowers from China;
- China January-October FDI;
- Chinese-German meeting at G20 Summit; and
- COP30 Concluded.
Listeners are also invited to attend the European Chamber’s 25th anniversary celebration dinner on 12th December in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
EU anti-dumping investigation into robotic lawnmowers from China
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C_202506235
https://www.globaltimes.cn/page/202511/1348659.shtml
January – October FDI
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_d9d8df8f906144ce83d64c03eab57b3a.html
Chinese-German Meeting at G20 Summit
https://www.gov.cn/yaowen/liebiao/202511/content_7049349.htm
https://www.fmprc.gov.cn/eng/xw/zyxw/202511/t20251124_11759117.html
COP30 Concludes
https://commission.europa.eu/topics/climate-action/eu-cop/eu-cop30_en
https://english.www.gov.cn/news/202511/24/content_WS69246302c6d00ca5f9a07c9a.html
https://news.un.org/en/story/2025/11/1166433
European Chamber 25th Anniversary Celebration Dinner
https://www.europeanchamber.com.cn/en/upcoming-events/27932/European_Chamber_25th_Anniversary_Celebration_Dinner_25_
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 26th November 2025.
(Music)
XINHE: On 19th November, the European Commission announced the launch of an anti-dumping investigation into robotic lawnmowers from China, marking a further escalation of trade tensions between the two markets.
RUI: Theprobe was launched in response to a complaint that dumping of robotic lawnmowers from China is causing injury to EU industry. The EU’s investigation notice noted that robotic lawnmowers are directly promoted by the Made in China 2025 plan, among other top-level Chinese policies. The development is a further evidence that strategic sectors covered by the Made in China 2025 plan are likely to continue exacerbating EU-China trade tensions, as outlined in the Chamber’s April 2025 report: Made in China 2025: The Cost of Technological Leadership.The Chinese lawnmower industry relies heavily on exports to the EU, with the market making up over 40 per cent of robotic lawnmower exports according to Chinese customs data, meaning that any measures adopted as a result of the investigation could have significant ramifications for Chinese companies.
(Music)
XINHE: Data released by China’s Ministry of Commerce on 21st November indicated a year-on-year decline in actual use of foreign direct investment—or FDI—for the January to October period.
RUI: FDI utilisation amounted to 621 billion yuan for the first 10 months of the year, down 10.3 per cent from the same period last year. By sector, manufacturing utilised nearly 162 billion yuan in FDI, services close to 446 billion yuan, and high-tech industries close to 193 billion yuan. Notably, FDI utilisation in the e-commerce services sector surged by 173.1 per cent, while investment in medical instruments and equipment manufacturing jumped by 41.4 per cent. The ongoing decline in FDI is likely driven by a number of factors, from long-standing grievances about the China market held by foreign companies such as unequal treatment in procurement, to complex geopolitical factors, all of which have made it increasingly challenging for some companies to justify further investment in China.
(Music)
XINHE: On 23rd November, Chinese Premier Li Qiang met with German Chancelor Friedrich Merz on the sidelines of the G20 Summit in South Africa.
RUI: In addition to calling for deeper Germany-China cooperation on key economic and environmental issues, Premier Li Qiang—who noted that 2025 marks the 50th anniversary of the establishment of EU-China diplomatic relations—asked for Germany to push the EU to view relations with China “from a longer-term perspective, with a broader vision and a more open mindset.” According to China’s statement on the meeting, Chancellor Friedrich Merz noted Germany’s willingness to play a “constructive role in promoting EU-China dialogue”. The meeting marks an improvement in Germany-China bilateral ties, with Merz expected to visit China in 2026. However, overall EU-China relations are likely to remain contentious in the face of growing trade imbalances and heightened economic and national security concerns in the EU, spurred by recent developments like China’s export controls on rare earth elements.
(Music)
XINHE: The 30th United Nations Climate Change Conference—or COP30—concluded on 21st November in Belem, Brazil. Attending parties came to an agreement that aims to maintain the goal of limiting the global average temperature rise to 1.5 degrees Celsius, something first set out by the Paris Agreement in 2015.
RUI: Both the EU and China released statements affirming their commitment to follow through on the conference’s goals, noting the importance of international cooperation to address climate change. The agreed Belem Political Package includes two major initiatives—the Global Implementation Accelerator and the Belém Mission to 1.5°C— both designed to help countries achieve their national climate targets.
(Music)
XINHE: The European Chamber is holding its 25th anniversary celebration dinner on Friday 12th December in Beijing.
RUI: The dinner will honour the work and accomplishments of the Chamber, reflecting on its quarter century of advocacy aimed at improving the business environment and levelling the playing field for European companies operating in China. Senior Chinese and European officials, the ambassador of the EU Delegation to China, ambassadors from EU Member State embassies, and senior executives from companies, media and academia will be in attendance. Tickets and sponsorship packages are on sale now, with European Chamber members prioritised.
XINHE: Purchase a ticket at the link in the description or reach out to us about sponsorship packages while availability lasts.
(Music)
RUI: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China October macroeconomic data;
- Fourth Germany-China high-level financial dialogue;
- State Council 14th November executive meeting;
- New guidelines on regulatory reforms in the cosmetics industry.
The European Chamber is conducting a flash survey on China’s export controls among members. Please fill out the survey before 21st November to influence our advocacy strategy.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China October macroeconomic data (NBS)
https://www.stats.gov.cn/sj/zxfb/202511/t20251114_1961856.html
https://www.stats.gov.cn/sj/zxfb/202511/t20251114_1961852.html
Fourth Germany-China high-level financial dialogue
https://english.www.gov.cn/news/202511/18/content_WS691c59a0c6d00ca5f9a07a4c.html
State Council 14th November executive meeting
https://english.www.gov.cn/news/202511/15/content_WS6917cf51c6d00ca5f9a0798e.html
New guidelines on regulatory reforms in the cosmetics industry
https://www.nmpa.gov.cn/xxgk/fgwj/gzwj/gzwjhzhp/20251117143349149.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 19th November 2025.
(MUSIC)
XINHE: According to macroeconomic data released by China’s National Bureau of Statistics on 14th November, the mismatch between supply and demand growth continued in October.
RUI: Industrial production rose 4.9 per cent year-on-year. This was the slowest rate of increase recorded since August 2024, but still faster than the pace of retail sales growth, which was 2.9 per cent in October. This reading, too, indicated the slowest pace of increase since last August. Regarding industrial production, growth was recorded in 29 of the 41 sectors surveyed. Automotive manufacturing stood out with an especially high uptick of nearly 17 per cent compared to the same period last year. As for retail sales, while consumption in the catering industry picked up in October, the expansion in goods sales narrowed for the fifth month in a row.
(MUSIC)
XINHE: On 17th November, German Vice Chancellor and Federal Minister of Finance Lars Klingbeil co-chaired the fourth Germany-China High-Level Financial Dialogue in Beijing with Chinese Vice Premier He Lifeng.
RUI: According to a joint statement released by China’s Ministry of Finance, the dialogue reached 27 points of consensus. These included continued cooperation within various international frameworks, including the International Monetary Fund, the Asian Infrastructure Investment Bank and the World Trade Organization. As for their bilateral policy research cooperation mechanism between the two countries’ finance ministries, exchanges on key issues, including fiscal sustainability will be strengthened, according to the statement. The two sides also agreed to further enhance cooperation in the areas of banking and insurance regulation and supervision, and will encourage further collaboration between their respective financial technology service providers, as well as more investments into each other’s financial services markets.
(MUSIC)
XINHE: On 14th November, Chinese Premier Li Qiang chaired a State Council executive meeting that set out new steps to balance supply and demand for consumer goods, and increase spending.
RUI: In alignment with the outline of the 15th Five-Year Plan confirmed at the fourth plenum, the State Council meeting concluded that consumption upgrading must steer industrial upgrading. In addition, they pledged more support for firms offering more distinctive, high-quality goods and will encourage production to adapt more quickly to customer demands. The meeting also called for faster and simpler project approvals, greater investment in R&D, data and brands, and a wider use of long-term loans. Talent training and top-level education will be expanded to serve innovation and strategic goals. Draft amendments to the Trademark Law were also approved for submission to the legislature.
(MUSIC)
XINHE: On 17th November, China’s National Medical Products Administration issued guidelines on enhanced regulatory reforms in the cosmetics industry.
RUI: The 24-point document calls for further support for innovation and for encouraging the launch of new, international cosmetic products in China, including by exempting such products from the requirement to submit proof of overseas sales. The guidelines also propose focused R&D efforts so that the cosmetics industry can tap further into the silver economy, with products targeting the country’s ageing population; and for safety management and supervision of the industry to be further optimised and streamlined.
(MUSIC)
XINHE: To better understand how China’s export control regime impacts our members, the European Chamber has launched a flash survey. The deadline for participation has been extended until 21st November.
RUI: The results of the survey will be used to help further our advocacy on this important topic on behalf of impacted member companies. Invitations to take part in the survey have been sent out via email to primary contacts of all member companies resident in China.
XINHE: Don’t miss your chance to participate, as your insights will directly influence our advocacy strategy. Your answers will ensure that we align our efforts to the real challenges and opportunities faced by our members.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China October trade data;
- State Council’s new measures on advancing the development of private investment;
- China October price indices; and
- NDRC guidelines for boosting new energy consumption.
The European Chamber is conducting a flash survey on China’s export controls among members. Please fill out the survey before 14th November to influence our advocacy strategy.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China October trade data (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6812132/index.html
State Council’s new measures on advancing the development of private investment
https://www.gov.cn/zhengce/content/202511/content_7047643.htm
China October price indices (NBS)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6812132/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6812132/index.html
NDRC guidelines for boosting new energy consumption
https://english.www.gov.cn/news/202511/10/content_WS6911e20bc6d00ca5f9a0775e.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 12th November 2025.
(MUSIC)
XINHE: China’s exports dipped in October after a surge in the previous month, as a slew of export control measures announced by China’s Ministry of Commerce at the beginning of October increased uncertainty among businesses and trade tensions intensified.
RUI: Data released on 7th November by China’s customs authorities showed that the country’s total value of exports fell 1.1 per cent compared to a year ago. This marked the first time that exports contracted since March 2024. In addition to the high base last October, another potential factor impacting trade was the 9th October announcement by China’s Ministry of Commerce about tightened export controls—with extraterritorial provisions—which were met by a threat from the United States of 100 per cent tariffs on Chinese imports. While the latest batch of export control measures have since been delayed for a year and the additional US tariffs were also not applied in the end, certain business decisions may have stalled as a result of the increased uncertainty that was created. While imports continued to grow in October, at 1 per cent, the pace of increase was the slowest in five months. China’s overall trade with the US kept declining in October, while, conversely, it has continued to expand its trade with other partners, including countries of the Association of Southeast Asian Nations and Africa.
(MUSIC)
XINHE: On 10th November, China’s State Council issued new measures aimed at advancing the development of private investment, including through increased funding for private projects and expanded market access for private firms.
RUI: The 13 measures listed in the document include points on expanding the scope of projects private firms can participate in—for instance in the area of urban development and infrastructure—as well as their shareholding ratio. Small and medium-sized enterprises or SMEs would be granted improved access to large government procurement projects, with at least 40 per cent of the total budget of such projects reserved for them. In the same context, purchasing parties will be encouraged to increase the proportion of advanced payments to private firms to more than 30 per cent of the contract amount. This, coupled with provisions on increased financial support for private enterprises, could help these companies better compete against their state-owned counterparts by ensuring liquidity throughout the lifetime of large projects. The State Council also emphasised the need to abolish discrimination and unreasonable access restrictions.
(MUSIC)
XINHE: According to data released by China’s statistics bureau on 9th November, producer price deflation persisted for the 37th month in a row in October, while consumer prices rebounded after two consecutive months of decline.
RUI: The official producer price index showed a 2.1 per cent year-on-year fall in October. While the overall trend of decline continued, this reading indicated the softest drop since August 2024. It also marked the fourth consecutive month of slowdown in the fall of factory gate prices. Consumer prices rose 0.2 per cent year-on-year. Albeit minimal, this was the strongest uptick recorded all year. A key factor that likely had a positive influence on prices charged to consumers was the eight-day-long national holiday at the beginning of the month that had a warming effect on demand.
(MUSIC)
XINHE: On 10th November, the National Development and Reform Commission issued a guideline on boosting new energy consumption, primarily through the development of advanced power grids.
RUI: The guidelines outline two sets of objectives. The first set, to be realised by 2030, focus on the establishment of a regulatory framework for new energy consumption and the expansion of new energy power generation. The second set consists of targets for 2035, with the key goal being the development of the power grid so that it can accommodate a high share of new energy.
(MUSIC)
XINHE: The European Chamber is conducting a flash survey to better understand the impact of China’s export control regime on its members. The results of the survey will be used to help further our advocacy on this topic on behalf of impacted member companies. Invitations have been sent via email from the European Chamber’s Secretary General email account to primary contacts of all member companies that are resident in China.
RUI: This survey is anonymous, ensuring your responses are confidential. By participating, you directly influence our advocacy strategy, ensuring it aligns with the real challenges and opportunities faced by our members. Your time and input are highly valued.
XINHE: Fill out the online questionnaire before the end of the day on 14th November so that we can work together to navigate these complex trade dynamics.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s October Purchasing Managers’ Indices;
- The EU-China export control dialogue;
- January–September services trade data; and
- The European Commission’s annual report on the Implementation and Enforcement of EU Trade Policy
A special edition of EURObiz magazine, marking the Chamber’s 25th anniversary, has now been published and is available for download here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China October PMIs (NBS)
https://www.stats.gov.cn/sj/zxfb/202510/t20251031_1961740.html
EU-China export control dialogue
https://aqygzj.mofcom.gov.cn/gzdt/art/2025/art_55b881aafe7d43bb9c2449646fd18aac.html
China January-September services trade (MOFCOM)
https://www.mofcom.gov.cn/xwfb/sjfzrfb/art/2025/art_8c008a074c584165aa6dbdd65bd6840b.html
European Commission’s annual report on the Implementation and Enforcement of EU Trade Policy
https://ec.europa.eu/commission/presscorner/detail/en/ip_25_2569
EURObiz issue 88 (September/October 2025)
https://www.europeanchamber.com.cn/en/eurobiz-archive-2025
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 5th November 2025.
(MUSIC)
RUI: Data released by the National Bureau of Statistics on 31st October showed that manufacturing activity in China fell sharply in October amid weakened demand.
MARIANN: The official manufacturing purchasing managers’ index, or PMI, dropped to 49 points – well below the 50-point mark separating growth from contraction. This was the lowest reading since April and marked the seventh consecutive month of contraction in China’s manufacturing sector. Dragging overall activity down was a fall in new orders. Weaker demand also manifested itself in trade: new order for exports and imports both fell at the fastest rate since April. A key factor driving export demand down was likely the increased uncertainty following the 9th October announcements of China’s Ministry of Commerce about tightened export controls – which were met by a threat from the United States of 100 per cent tariffs on Chinese imports.
The official non-manufacturing PMI, which reflects construction and services activity, stood at 50.1 points in October, slightly up from the previous month when activity stagnated. The uptick was due to an improvement in the conditions of the services industry, while construction activity actually dropped further from September. Services activity grew at a fast pace in areas related to travel and leisure, boosted by consumption during the national holiday at the beginning of the month.
(MUSIC)
RUI: A high-level technical delegation from China’s Ministry of Commerce met trade officials from the European Commission for a meeting under the framework of the EU-China export control dialogue mechanism.
MARIANN: Following the meeting, the EU side’s communication suggested that China’s one-year suspension of the export control measures announced by the Ministry of Commerce on 9th October would apply to all trade partners. The suspension was announced following a meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea on 30th October. The suspension of the additional export control measures—which included extraterritorial provisions—is a positive, as it will provide some time for companies to prepare and adjust their supply chain strategies. However, uncertainty remains over implementation details, as the Chinese side also said that it would study and refine specific plans in the intervening year.
(MUSIC)
RUI: According to data published by the Ministry of Commerce on 4th November, China’s services trade grew substantially in the first three quarters of 2025, with the country’s trade deficit shrinking.
MARIANN: The total value of China’s services trade rose 7.6 per cent year-on-year in the January-September period. At 14.4 per cent, the year-on-year pace of increase in total services exports was over five times faster than that of imports, which grew by 2.8 per cent. Imports, however, still accounted for more than 56 per cent of China’s overall services trade. Nevertheless, the accelerated export growth drove China’s trade deficit down by nearly 25 per cent compared with the same period last year.
(MUSIC)
RUI: On 3rd November, the European Commission released its annual report on the implementation and enforcement of the EU’s trade policy. The report’s key conclusion was that the EU’s network of trade agreements helps companies diversify their export markets and reduce dependencies.
MARIANN: The report found that EU exports most affected by technical barriers to trade were those to China. In 2024, 14 billion euros worth of EU exports to China were affected by such barriers – which included food strandards and cybersecurity requirements. This amounted to more than half of all EU exports affected by technical barriers to trade during the past year. As for market access barriers in 2024, China ranked third after Russia and India in the most barriers registered. This showed a slight change from 2023, when China was at the top of the list.
(MUSIC)
RUI: The September/October issue of the Chamber’s bimonthly magazine EURObiz, is a special edition celebrating the European Chamber’s 25th anniversary.
MARIANN: Download a digital copy for free from the Chamber’s website to read interviews with some of the people that have played a significant role in the Chamber’s development.
RUI: You will also find articles exploring Chinese e-commerce, China’s labour market, and the experiences of foreign executives in China over the past 25 years.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s January–September FDI utilisation;
- The Fourth Plenum of the CPC Central Committee Communiqué;
- China’s January–October industrial profits; and
- US-China and EU-China talks on rare earth export controls.
Listeners are also invited to attend an event on 5th November in Beijing on MNCs’ China strategies in the era of AI.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China January-September FDI utilisation (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_a1fb9e9cd94e4590a25ef3ccf9351852.html
Fourth Plenum of the CPC Central Committee Communique
https://www.europeanchamber.com.cn/en/press-releases/3751/statement_on_the_communique_of_the_fourth_plenary_session_of_the_20th_central_committee_of_the_communist_party_of_china
China January-October industrial profits (NBS)
https://www.stats.gov.cn/sj/zxfb/202510/t20251027_1961695.html
US-China and EU-China talks on rare earth export controls
https://www.ft.com/content/3ae00c92-f216-4da5-9217-220ec42d37cc
https://www.reuters.com/world/asia-pacific/eus-costa-expressed-concerns-chinas-li-expanding-mineral-export-curbs-2025-10-27/
https://www.reuters.com/world/asia-pacific/eu-trade-chief-meet-chinese-counterpart-discuss-rare-earths-2025-10-21/
Chamber event: MNCs’ Strategies in China in the Era of AI
https://www.europeanchamber.com.cn/en/upcoming-events/28405/_Offline_Member_Free_MNCs_Strategies_in_China_in_the_Era_of_AI
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 29th October 2025.
(MUSIC)
RUI: According to data released by China’s Ministry of Commerce on 25th October, the country’s actual use of foreign direct investment or FDI continued to decline in the first three quarters of 2025. However, in September alone a year-on-year increase was recorded.
MARIANN: China’s FDI utilisation amounted to 574 billion yuan in the January-September period, which meant a drop of 10.4 per cent compared to the same period last year. The rate of decline, however, slowed compared to the previous month as in September, total used FDI increased 11.2 per cent year-on-year. In the first nine months of the year, slightly over a quarter of FDI was utilised in manufacturing, with the remaining three quarters channeled into services.
(MUSIC)
RUI: Between 20th and 23rd October, the 20th Central Committee of the Communist Party of China convened in Beijing for its fourth plenary session, during which the Party leadership deliberated on the country’s upcoming, 15th Five-Year Plan. Following the plenum, a communique was issued on 23rd October, outlining the core principles and major tasks for China’s economic and social development in the 2026 to 2030 period.
MARIANN: The Communique contains no major surprises, signalling that China’s 15th Five-year Plan will have a high degree of policy continuity following on from the 14FYP. Ensuring economic security—including via achieving a high degree of technological self-reliance in strategic sectors and by maintaining the country’s global manufacturing dominance—will continue to be a key priority for the Chinese authorities over the coming half a decade.
Under the 15FYP, China will continue to boost domestic demand – partly by improving living standards. The Communique also suggests that efforts will be made to balance supply and demand growth. This is a positive, as a persistent mismatch between the two has already led to several problems for the Chinese economy, including unsustainable competition and an increasing reliance on exports, resulting in an increase in trade imbalances. However, the document does not contain any detail on how this will be achieved.
The full text of the 15FYP is expected to be released after the upcoming Two Sessions in March 2026.
(MUSIC)
RUI: Data published by the National Bureau of Statistics on 27th October showed that the growth in profits at larger industrial firms in China accelerated substantially in September.
MARIANN: In the first three quarters of 2025, industrial profits rose 3.2 per cent year-on-year. This was the fastest pace of increase recorded since July 2024. The acceleration was due to a marked uptick in profits in September, which was 21.6 per cent year-on-year. A key factor pulling the figure up for the first three quarters was a sharp rise in manufacturing profits, which were up 9.9 per cent year on year.
(MUSIC)
RUI: After two days of talks on 24th and 25th October, on the sidelines of the summit of the Association of Southeast Asian Nations or ASEAN held in Malaysia, the United States and China reportedly reached a preliminary agreement on some of their key trade issues, including China’s export controls on rare earths.
MARIANN: The Financial Times reported that the US side expected China to delay export controls on rare earth minerals, which were set to come into force in early November. In exchange, the US side would not go through with imposing 100 per cent tariffs on Chinese imports, as suggested by President Donald Trump earlier in October. The Chinese side confirmed that a preliminary consensus was reached, but provided no further details. The two presidents are scheduled to meet on 30th October in South Korea on the sidelines of the Asia-Pacific Economic Cooperation, when details of the agreement could be finalised.
Also at the ASEAN summit, European Council President Antonio Costa met with Chinese Premier Li Qiang on 27th October, and expressed concerns about China’s export controls. MOFCOM Director General Jiang Qianliang is due to travel to Brussels this week to discuss the issue with European Commission officials within the framework of the EU-China Export Controls Dialogue, with the goal of finding solutions.
(MUSIC)
RUI: The rapid rise of artificial intelligence or AI is profoundly reshaping the global business landscape. In China, the ‘AI Plus’ initiative was first included in the Government Work Report in 2024. The 2025 report vowed to further advance this initiative. The State Council recently issued a guideline to implement the ‘AI Plus’ initiative, promoting the extensive and in-depth integration of AI across various fields.
MARIANN: The fast development of AI triggered a paradigm shift that goes far beyond technological deployment—it challenges how organisations think and make decisions about their development.
RUI: Join us on 5th November in Beijing to learn from top business strategists, AI experts and senior executives about the challenges and opportunities for multinational companies in China’s “intelligent economy”.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China third quarter GDP;
- China September macroeconomic data; and
- Fourth Plenum of the 20th CPC Central Committee.
Listeners are also invited to join the Carbon Neutrality Conference in Shanghai on 30th October, focussing on supply chains decarbonisation.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China Q3 GDP (NBS)
https://www.stats.gov.cn/sj/zxfb/202510/t20251020_1961612.html
China macroeconomic data, September(NBS)
https://www.stats.gov.cn/sj/zxfb/202510/t20251020_1961611.html
https://www.stats.gov.cn/sj/zxfb/202510/t20251020_1961606.html
Fourth Plenum of the CPC Central Committee
https://english.www.gov.cn/news/202510/20/content_WS68f62084c6d00ca5f9a06efc.html
Chamber event:
https://www.europeanchamber.com.cn/en/upcoming-events/28416/Carbon_Neutrality_Conference_2025_Supply_Chains_Decarbonisation_from_Production_challenges_to_Systemic_Innovation
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 22nd October 2025.
(MUSIC)
RUI: According to the National Bureau of Statistics, the pace of China’s quarterly economic growth was the slowest recorded in a year in the third quarter of 2025.
MARIANN: The country’s gross domestic product, or GDP, increased 4.8 per cent year-on-year in the July-September period, marking he second consecutive quarter of slowing economic growth. While achieving the annual target of “around 5 per cent growth” should still be possible, China’s overall economic slowdown was a key concern of respondents to the European Chamber’s Business Confidence Survey 2025. However, the shift away from setting hard GDP targets can already be interpreted as an acknowledgment from Chinese policymakers that maintaining the kind of breakneck growth that China enjoyed in the previous two decades is neither realistic nor that important for a maturing economy. It also provides more space to focus on changing the composition of China’s GDP, with an emphasis on sustainable and quality growth.
(MUSIC)
RUI: Additional data released by China’s statistics bureau on 20th October showed that industrial production accelerated, while retail sales growth slowed in September, pointing to a continued imbalance between supply and demand.
MARIANN: The total value of industrial production at larger firms rose 6.5 per cent year-on-year in September – the fastest pace recorded in three months. Out of the three industries of mining, manufacturing and utilities, the rate of growth was the highest in manufacturing at 7.3 per cent. In a separate release, the statistics bureau revealed that in the third quarter of 2025, industrial capacity utilisation at larger firms stood at 74.6 per cent overall – the highest level recorded this year.
Meanwhile, the total value of retail sales expanded 3 per cent year-on-year in September, with the rate of growth decelerating to the slowest level since last November. A breakdown of the data showed slower growth for the sales of both goods and catering in September, with the drop substantially sharper in catering.
In the first three quarters of 2025, retail sales grew at 4.5 per cent year-on-year. This compares with a 6.2 per cent growth rate in industrial production for the same period.
(MUSIC)
RUI: On 20th October, the Central Committee of the Communist Party of China started its fourth plenary session, during which the Party’s leadership is deliberating on the country’s 15th Five-year Plan.
MARIANN: The 15FYP will set the direction for China’s social and economic development from 2026 to 2030. It will be an important transitional plan, as it should see the peaking of carbon emissions, planned to take place before 2030, and also comes five years before the deadline for China to achieve ‘socialist modernisation’. According to Xinhua, the plan will further promote the cultivation of new productive forces and strengthening scientific and technological innovation in critical areas, while upgrading traditional industries.
The Chamber has put forward its recommendations for the upcoming five-year plan in its annual Position Paper, released in September. The five key recommendations detailed in the paper call for reforms that address underlying structural issues; allowing market forces to play the decisive role in resource allocation; taking action to create equitable trade relationships; continuing efforts to green the economy and ensuring environmental sustainability; and advancing China’s digital transition in an inclusive way.
(MUSIC)
RUI: As supply chains face increasing scrutiny with regard to climate action, companies are under growing pressure to decarbonise every link of their global operations. For industries deeply integrated with the EU market, aligning with both European and Chinese climate agendas presents a dual challenge: electrifying production processes while addressing Scope 3 emissions—indirect emissions that occur in the value chain—across transportation, logistics and supplier engagement.
MARIANN: At the same time, rapid changes in energy markets, technological innovation and evolving environmental, social and governance or ESG expectations are reshaping how businesses will be able to deliver on their decarbonisation commitments.
RUI: Join us in Shanghai on 30th October, for the Chamber’s Carbon Neutrality Conference 2025, to gain insights into regulatory developments, practical ESG integration strategies, and the role of innovation and collaboration in building low-carbon value chains. The conference will provide a platform for companies to exchange perspectives, share best practices and explore actionable solutions towards achieving long-term carbon neutrality goals.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China September foreign trade data;
- China tightening export controls on rare earths;
- China official September Manufacturing and Non-manufacturing PMI; and
- China September price indices.
The European Chamber’s second tour to Brussels this year concluded at the end of September. Join the townhall briefing on 20th October in Beijing or online to hear the tour’s key takeaways from the President.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China foreign trade data, September (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6769789/index.html
China tightening export controls on rare earths (MOFCOM, GACC)
https://www.mofcom.gov.cn/zcfb/blgg/art/2025/art_e1b8bcd4bcb84eba9e1adc56b4101157.html
https://www.mofcom.gov.cn/zcfb/zc/art/2025/art_b1dd1e72bc9540098b2dc09e5c02f579.html
https://www.mofcom.gov.cn/zcfb/zc/art/2025/art_d79a7d0dcfed46aca041797c7aca71f7.html
https://www.mofcom.gov.cn/zcfb/zc/art/2025/art_ba88207d1a87486fb959288604f3c7f7.html
https://www.mofcom.gov.cn/zcfb/zc/art/2025/art_b9ad6bbdc6fd42ce9ebdcae54645f51d.html
https://www.mofcom.gov.cn/zcfb/zc/art/2025/art_24600584ed4a4abf8f74d7385d935f3c.html
China Official Manufacturing and Non-Manufacturing PMI, September (NBS)
https://www.stats.gov.cn/sj/zxfb/202509/t20250930_1961438.html
China September price indices (NBS)
https://www.stats.gov.cn/sj/zxfb/202510/t20251015_1961520.html
https://www.stats.gov.cn/sj/zxfb/202510/t20251015_1961521.html
https://www.stats.gov.cn/sj/sjjd/202510/t20251015_1961519.html
Chamber event: Townhall briefing on the second European tour in 2025
https://www.europeanchamber.com.cn/en/upcoming-events/28404/_Member_Free_Hybrid_Townhall_Briefing_by_the_President_on_the_Second_European_Tour_2025
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 15th October 2025.
(MUSIC)
RUI: Data released by China’s customs authorities on 13th October showed that the country’s foreign trade growth accelerated sharply from August to September.
MARIANN: In US dollar terms, the total value of China’s exports surged 8.3 per cent year-on-year – the highest rate of growth recorded since March. Imports also rose at a rate unparalleled since April 2024, at 7.4 per cent. As a result, China’s trade surplus narrowed to 90.45 billion US dollars – the lowest level in a year. In the first three quarters of 2025, China’s exports to the EU increased 8.2 per cent year-on-year, while its imports from the bloc fell 3.2 per cent.
(MUSIC)
RUI: On 9th October, China’s Ministry of Commerce released six announcements—four of them jointly with the General Administration of Customs—tightening export controls of rare earth elements.
MARIANN: Crucially, the announcements introduced export controls on technologies related to rare earths and requirements for foreign entities to obtain a dual-use items export licence. Additionally, starting from 8th November, the scope of export controls will be extended to more items, including lithium batteries.
For the European Chamber’s members, the most immediate concern regarding China’s rare earth export controls remains the current backlog of export licence applications that are still awaiting approval. At the same time, these latest announcements add further complexity to the global supply chains of rare earth elements. As key trade partners—including the European Union—have been vocal about their concerns over access to critical minerals vital for industrial production, these announcements are likely to increase trade tensions further. The European Chamber, therefore, is urging the Chinese side to maintain communication with trade partners on the issue and continue to facilitate rare earth exports to European companies.
(MUSIC)
RUI: Manufacturing activity in China continued to shrink in September, while non-manufacturing—reflecting services and construction—stagnated, according to data released on 30th September by the National Bureau of Statistics.
MARIANN: The official manufacturing purchasing managers’ index or PMI stood at 49.8 points in September. While this was the highest reading of the past half year, the index still remained below the 50-point mark separating growth from contraction. A breakdown by company size indicated that only large manufacturing firms were able to increase their activity in September. A key reason behind the overall decline was a persistent contraction in new orders – which continued for the third month in a row, albeit the corresponding subindex edged closer to the 50-point mark. Conversely, production surged at the fastest pace recorded since March, and optimism about the year ahead rose to the highest level in seven months.
The non-manufacturing PMI sank to 50 points in September, indicating stagnation, as construction activity shrank for the second month in a row and growth in services activity slowed.
(MUSIC)
RUI: According to data published by China’s statistics bureau on 15th October, deflation continued to put a pressure on the country’s economy in September, as both producer and consumer prices dropped compared to a year ago.
MARIANN: The producer price index showed a 2.3 per cent year-on-year fall. This marked the 36th consecutive month of decline in prices producers charge their customers at the factory gate. The rate of decline, however, was the mildest recorded in seven months, as in certain industries—including aircraft and special electronic materials manufacturing— prices improved year-on-year, while in some others, the rate of decline narrowed.
Consumer prices dropped 0.3 per cent compared to the same period last year. This also indicated a slight improvement from August, when the index showed a 0.4 per cent decline. The main factor drawing the index downwards was an accelerating fall in food and energy prices.
(MUSIC)
RUI: The European Chamber’s second tour to Brussels this year concluded at the end of September, with a delegation made up of the president, vice presidents, board members, senior working group and secretariat representatives.
MARIANN: During the week-long tour, delegates presented the newly released European Business in China Position Paper 2025/2026 and the Chamber’s key messaging to European officials, the Chinese Ambassador to the EU, industry associations and think tanks. In total, 55 meetings were held.
RUI: Join us on 20th October in Beijing or online for our national townhall event, where European Chamber President Jens Eskelund will debrief members on the key takeaways of this second tour to Brussels this year.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China January-August utilised FDI;
- Profit growth of central SOEs during the 14FYP period; and
- 1st International Expo of Geographical Indication Products.
The European Chamber’s second Brussels tour this year started on 22nd September.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China January-August utilised FDI (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_9158d73384c54ac380df21aeb283b0ce.html
Profit growth of central SOEs during the 14FYP period
https://english.www.gov.cn/news/202509/17/content_WS68ca4c28c6d00fa19f7a284a.html
1st International Expo of Geographical Indication Products
https://bjrbdzb.bjd.com.cn/bjrb/mobile/2025/20250920/20250920_005/content_20250920_005_4.htm#page4
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 24th September 2025.
(MUSIC)
RUI: Data released by China’s Ministry of Commerce on 19th September showed that in the first eight months of the year, the pace of decline in the country’s actual use of foreign direct investment or FDI continued to slow.
MARIANN: In the January-August period, China’s utilised FDI totalled 507 billion yuan, down 12.7 per cent year-on-year. The pace of decrease slowed from 13.4 per cent recorded in the January-July period.
According to the Chamber’s Business Confidence Survey 2025, China’s standing as an investment destination remains below potential, with nearly one in five respondents reporting that the country is not even a top-10 destination for current investments. The proportion of Chamber members that have already moved current investments from the country rose to 17 per cent, while those planning to shift future investments increased to 16 per cent. The main beneficiary of these investment shifts is Europe, followed by the Association of Southeast Asian Nations.
(MUSIC)
RUI: At a press conference held on 17th September, Zhang Yuzhuo, chairman of the State-owned Assets Supervision and Administration Commission said that centrally administered state-owned enterprises, or SOEs, increased their total profits by nearly 37 per cent during the 14th Five-year Plan period.
MARIANN: Specifically, total profits of centrally administered SOEs have increased from 1.9 trillion yuan to 2.6 trillion yuan in the five years between 2021 and 2025. This represents an annual growth of 8.3 per cent. Officials from the Commission also highlighted that central SOEs have increased their investments in strategic emerging industries, with these accounting for over 40 per cent of their total investments in 2024. Operating revenues from strategic emerging sectors exceeded 11 trillion yuan last year, contributing nearly 30 per cent of the total. It was also highlighted that during the 15th Five-year Plan period, further efforts will be made to advance the role of central SOEs as “major drivers of technological innovation”.
However, according to the International Monetary Fund, SOEs are, on average, less productive than private companies. The Chamber, therefore, has been advocating for SOE reforms and for market forces to be given the decisive role in resource allocation.
(MUSIC)
RUI: The first International Expo of Geographical Indication Products was held in Beijing between 19th and 21st September, marking the 4th anniversary of the EU-China agreement on Geographical Indications, or GIs, entering into force. The expo displayed over one thousand GI products from more than 30 countries.
MARIANN: In December 2024, China introduced a unified GI recognition system to streamline lifecycle management and align it with the trademark system. While this was a welcome step, unlike other Intellectual property rights—such as trademarks, patents and trade secrets, which are governed by specific laws—there is currently no specific law dedicated to GIs. Measures aimed at protecting GIs currently in force still lack a provision for rights enforcement and make it difficult for GI product owners to protect their rights through administrative actions. The Chamber is therefore calling for dedicated GI legislation to be introduced with provisions on enforcement. A GI law could potentially mirror provisions from the Trademark Law, including the delegation of power to local offices of China’s market regulator to confiscate and destroy infringing products, impose sanctions and classify serious infringements as criminal offences.
(MUSIC)
RUI: On 22nd September, a European Chamber delegation led by President Jens Eskelund, and composed of vice presidents, board members and senior working group representatives, travelled to Brussels for the Chamber’s second tour of the European Union capital this year.
MARIANN: During the tour, delegates will meet both high- and working-level counterparts to share industry insights on the policy and business environment in China, discuss the most pressing issues of the EU-China trade relationship, and present the Chamber’s newly released European Business in China Position Paper 2025/2026.
RUI: In the meantime, please find useful links in the episode notes.
RUI: Over the first two days in Brussels, the Chamber delegation met Chinese Ambassador to the EU, Cai Run, as well as representatives of the European Commission, the European Parliament, industry associations and think tanks. You can follow the delegation and get daily updates on key meetings on the Chamber’s WeChat account.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in after the National day holiday.
This episode contains segments on:
- China August macroeconomic data
- US-China high-level meeting in Madrid
- New measures on boosting service consumption
- China January-July services trade
On 17th September, the European Chamber released its annual European Business in China Position Paper, which is available to download for free from the Chamber’s official website.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China August macroeconomic data
https://www.stats.gov.cn/sj/zxfb/202509/t20250915_1961180.html
https://www.stats.gov.cn/sj/zxfb/202509/t20250915_1961177.html
US-China high-level meeting in Madrid
https://www.mofcom.gov.cn/syxwfb/art/2025/art_b9b6f8aebf614527a5c9b1eec2b7d39c.html
New measures on boosting service consumption
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_e1a2b7dd69fa4944aaf6ac1554ce404f.html
China January-July services trade
https://www.mofcom.gov.cn/xwfb/sjfzrfb/art/2025/art_9aaaf4b068a146e3a136074dc50cef94.html
European Chamber publication: European Business in China Position Paper 2025/2026
https://www.europeanchamber.com.cn/en/publications-position-paper
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 17th September 2025.
(MUSIC)
RUI: According to data release by the National Bureau of Statistics on 15th September, industrial production growth in China was the slowest recorded in a year in August, while retail sales growth also slowed to the lowest level since last November.
MARIANN: Production at China’s larger industrial firms increased 5.2 per cent year-on-year in August, with the rate of growth decelerating for the second consecutive month. Out of the three main industrial sectors of mining, manufacturing and utilities, production growth was the strongest in manufacturing at 5.7 per cent. A breakdown by commodities showed that out of 623 types of industrial goods, production volumes increased in 319 categories – so just above half of all surveyed commodities saw an uptick in production volumes. In the first eight months of the year, industrial production grew 6.2 per cent compared to the same period last year. This compares with a 3.7 per cent year-on-year increase in retail sales for the January-August period – pointing to a continued imbalance between the growth in supply and demand. In August alone, the total value of retail sales increased 3.4 per cent year-on-year, following a four-month deceleration of growth. In the first eight months of the year, the total value of online retail sales rose 9.6 per cent year-on-year, with the online retail sales of physical goods accounting for a quarter of all consumer goods sales for this period.
(MUSIC)
RUI: Another round of US-China talks concluded in Madrid on 15th September, with discussions about the Chinese-owned social media platform TikTok’s US operations dominating the meeting.
MARIANN: Both sides agreed to a ‘framework’ deal that would allow TikTok to continue operating in the US despite a 2024 law that would ban the app unless its owner, ByteDance, were to divest from the platform. Chinese President Xi Jinping and US President Donald Trump are expected to speak on 19th September to discuss the potential deal. Broader trade discussions, including on tariffs, took a back seat during the talks, despite an impending 10th November expiration date on the second 90-day ‘tariff truce’ between the two countries. Given the abrupt nature in which tariffs were imposed in the first place, as well as the last-minute announcement of the second ‘tariff truce’ in August, meaningful progress on a new deal that avoids a return to tariffs at the highest levels is not likely until closer to the 10th November deadline.
(MUSIC)
RUI: On 16th September, nine Chinese government departments, including the Ministry of Commerce, jointly released measures aimed at boosting services consumption, with the focus on expanding demand through improving people’s livelihood and cultivating growth points for services consumption.
MARIANN: The document comprises 19 points grouped under five areas. The measures include calls for action to improve the quality as well as the supply of services in areas such as culture and entertainment, sports, housekeeping, child- and elderly care, expand digital services consumption and strengthen financial support for the industry.
(MUSIC)
RUI: Data published by China’s Ministry of Commerce on 5th September showed that in the first seven months of 2025 the country’s services trade growth accelerated further from the first half of the year.
MARIANN: The total value of trade in services reached over 4 thousand billion yuan – up 8.2 per cent year-on-year. Services exports grew at a faster pace than imports, but the latter still made up more than 56 per cent of China’s overall services trade. The Ministry highlighted that trade in knowledge-intensive services maintained steady growth, up 6.8 per cent year-on-year in the January-July period. In this area, China’s trade deficit increased 21 per cent compared to the same period last year. In terms of exports, the export of China’s tourism-related services rose at the fastest pace, increasing over 62 per cent year-on-year.
(MUSIC)
RUI: On 17th September, the European Chamber launched its European Business in China Position Paper 2025/2026, calling on Chinese policymakers to use the upcoming 15th Five-year Plan to affect a shift towards a new, productive development model.
MARIANN: The Executive Position Paper offers five overarching Key Recommendations to Chinese policymakers highlighting priority areas where, building on the achievements of the 14th Five-year Plan focused efforts can help China meet its development goals while remaining fully integrated in—and valued by—the global economic system. The Chamber’s individual industry and horizontal position papers provide more granular detail, putting forward more than 1,100 constructive recommendations for optimising China’s business environment.
RUI: The paper is now available to download for free from the Chamber’s website.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China August foreign trade data;
- China August price indices; and
- China’s 2024 outbound direct investments.
Listeners are also invited to join the European Chamber’s Position Paper launch online on 17th September.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China August foreign trade data (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6714956/index.html
China August price indices (NBS)
https://www.stats.gov.cn/sj/sjjd/202509/t20250910_1961105.html
https://www.stats.gov.cn/sj/zxfb/202509/t20250910_1961108.html https://www.stats.gov.cn/sj/zxfb/202509/t20250910_1961112.html
China’s 2024 outbound direct investments
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_f10eb8e1d3234ee4968c893757b4e10c.html
European Chamber event: European Business in China Position Paper 2025/2026 launch
https://www.europeanchamber.com.cn/en/upcoming-events/28263/_Hybrid_European_Business_in_China_Position_Paper_2025_2026_
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 10th September 2025.
(MUSIC)
RUI: Data released by China’s customs authority on 8th September showed that the country’s total export value increased at the slowest pace in half a year in August, with import growth also softening from the previous month.
MARIANN: The total value of exports was up 4.4 per cent year-on-year, with the rate of growth narrowing significantly from July, when exports surged more than 7 per cent. This sharp uptick was largely attributed to export frontloading in July, as a 90-day suspension of US tariffs on Chinese imports was due to expire in August. The tariff suspension was subsequently extended. Concerns over mutual tariffs being reimposed also had an impact on imports, with companies reliant on imports from the US stockpiling goods in July. This then led to a subsequent slowdown in overall import growth in August, with the rate of year-on-year increase narrowing to 1.3 per cent from 4.1 per cent in July.
(MUSIC)
RUI: Producer price deflation continued for the 35th month in a row, while consumer prices sank at the fastest rate recorded in half a year, according to data published by China’s statistics bureau on 10th September.
MARIANN: The official producer price index showed a 2.9 per cent drop year-on-year. While still significant, this was the slowest pace of decline recorded in four months. The statistics bureau highlighted four key factors behind the slowing decrease: first, a relatively low base from the same period last year; second, efforts to control disorderly competition at low prices; third, a recovery in prices in emerging industries; and finally, an uptick in consumer demand for certain health and leisure-related products pushing their manufacturing prices up.
Meanwhile, consumer prices dropped 0.4 per cent year-on-year, decreasing for the first time in three months, as food prices dropped sharply from the same period last year.
(MUSIC)
RUI: On 8th September, China’s Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange jointly released the 2024 Statistical Bulletin on China’s Outbound Direct Investment, which showed thatChina increased its global share in direct investments, ranking among the top 3 investors in the world for 13 consecutive years.
MARIANN: China’s outbound direct investments totalled 192 billion US dollars in 2024, increasing 8.4 per cent from the previous year. This means China accounted for 11.9 per cent of all global investment flows, up 0.5 per cent from 2023. Nearly 80 per cent of China’s outbound direct investments was channelled into Asia. Investments flows into the EU totalled 5.9 billion US dollars, up 9.3 per cent year-on-year and accounting for just over 3 per cent of China’s total outbound investments. Over 70 per cent of EU-bound investments were directed into the financial sector. China’s investments into the US surpassed the amount invested in the EU, despite dropping more than 4 per cent year-on-year to 6.6 billion US dollars. However, looking at investment stocks, those in the EU totalled more than 116 billion US dollar by the end of last year, accounting for 3.7 per cent of China’s external investment stocks. Meanwhile, standing at nearly 90 billion US dollars, China’s total investment stocks in the US contribute 2.9 per cent of the country’s global total.
(MUSIC)
RUI: Each year, the European Chamber releases its Position Paper with recommendations to Chinese policymakers compiled by its membership organised into working groups, sub-working groups, industry desks and forums. The paper sets the Chamber’s advocacy agenda for the year ahead.
MARIANN: With China now in the preparatory phase of the 15th Five-year Plan, this year’s Executive Position Paper reviews China’s 14th Five-year Plan, assessing both the positive and not-so-positive outcomes, and suggests areas that the 15FYP could focus on so that the guiding principles for the next five years can be finetuned in a way that enables a more open and mutually beneficial EU-China trade and investment relationship.
RUI: Join us on the 17th September to hear about the key challenges faced both by businesses and China’s economy more broadly, and the steps that could be taken to overcome them. Following the launch, the Position Paper will be available to download for free from the Chamber’s website.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China Official August Purchasing Managers’ Index (PMI)
- RatingDog China General Manufacturing and Services PMIs
- Opinions on Promoting High-Quality Urban Development
EURObiz July/August 2025 issue is available to download from the European Chamber’s official website for free.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China Official August PMI (NBS)
https://www.stats.gov.cn/sj/zxfb/202508/t20250831_1960937.html
RatingDog China General Manufacturing and Services PMIs
https://www.pmi.spglobal.com/Public/Home/PressRelease/48effcfa297f41e68d9499b39e7485fe
https://www.pmi.spglobal.com/Public/Home/PressRelease/b57b29dfeeec4428851a91cb28dc5c4a
Opinions on Promoting High-Quality Urban Development
https://www.gov.cn/zhengce/202508/content_7038144.htm
EURObiz July/August 2025
https://www.europeanchamber.com.cn/en/eurobiz-archive-2025
Transcript:
XINHE: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 4th September 2025.
(MUSIC)
XINHE: Data released by the National Bureau of Statistics on 31st August showed that China’s manufacturing activity continued to decline for the fifth consecutive month in August as demand remained subdued.
MARIANN: The official manufacturing purchasing managers’ index or PMI stood at 49.4 points – below the 50-point mark separating growth from contraction. The headline index improved 0.1 percentage points from the previous month. This was largely due to an uptick in production. However, while the decline in new orders narrowed from the previous month, the corresponding subindex remained under 50-points for the second month in a row. Employment levels in the manufacturing sector shrank further from July.
The non-manufacturing PMI, which comprises services and construction data, indicated an increase in activity, rising to 50.3 points in August. This was propelled by a rebound in services activity, with the tertiary sector recording the fastest pace of expansion all year. Construction activity meanwhile dropped sharply, with the index sinking below the 50-point mark for the first time since January.
(MUSIC)
XINHE: A private survey conducted by S&P Global in affiliation with the Shenzhen-based financial technology company RatingDog found that manufacturing conditions in China improved in August, as production, boosted by an uptick in demand, returned to growth.
MARIANN: The RatingDog China General Manufacturing PMI—previously known as Caixin Manufacturing PMI—stood at 50.5 points in August. This was primarily attributed to a spike in new orders, with the rate of growth the fastest recorded since March. Survey respondents highlighted that this was propelled by an improvement in domestic demand, with new export orders falling slightly. The overall improvement in manufacturing conditions, however, was not enough to put a stop to a decrease in staffing levels in the sector, which continued for the fifth consecutive month. Yao Yu, founder of RatingDog, commented that as policies aimed at curbing unhealthy competition at low prices have been announced, input prices have continued to increase, but manufacturing firms’ profitability has only showed a slight recovery and remains under pressure.
XINHE: A separate statement, released on 3rd September, showed that the RatingDog China General Services PMI reached 53 points in August, the fastest rate of increase since May 2024.
MARIANN: The increase in services activity followed an increase in both overall new orders and new export business. Survey respondents mentioned a rise in tourism as one of the key factors behind faster sales growth. Despite this, service companies were still reluctant to increase staffing levels amid concerns over costs.
(MUSIC)
XINHE: On 28th August, the Central Committee of the Communist Party of China and the State Council jointly released new guidelines on advancing the high-quality development of China’s cities.
MARIANN: The Opinions on Promoting High-Quality Urban Development sets a 2030 deadline for achieving “foundational progress” in this area, and calls for a modern urban model with Chinese characteristics to be basically realised by 2035. Some of the key directions for development listed in the document include transitioning from a growth-driven pattern to a people-orientated one, and from a uniform pattern to a distinctive one that takes into account the given city’s characteristics. It also calls for development plans to be more coordinated across regions.
These guidelines follow recent disapproval from China’s leadership about the lack of diversity in local governments’ development plans. At a conference on urban work held on 14th July 2025 in Beijing, Chinese President Xi Jinping had criticised local governments for focussing their efforts on the same emerging industries, such as artificial intelligence, computing power and new energy vehicles.
(MUSIC)
XINHE: The 87th edition of the Chamber’s bimonthly, digital magazine EURObiz focusses on China’s summer economy and features some of the highlights from the Chamber’s recent Business Confidence Survey.
MARIANN: Articles featured in the July/August issue delve into topics such as how European companies can benefit from China’s resurgent tourism industry, and how they can navigate the impact that warmer weather is having on cold chain logistics.
XINHE: Download the latest issue for free from the Chamber’s website to learn more.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China January-July utilised FDI;
- China January-July industrial profits;
- Opinions on Advancing the Green and Low-Carbon Transition and Strengthening the Building of the National Carbon Market; and
- China January-July online retail sales.
Listeners are also welcomed to attend Sustainable Supply Chain Conference in Shanghai on 4th September.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China January-July utilised FDI (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_7f4785c9b4cf4ea7ae676dbc1159e242.html
China January-July industrial profits (NBS)
https://www.stats.gov.cn/sj/zxfb/202508/t20250827_1960884.html
https://www.stats.gov.cn/sj/sjjd/202508/t20250827_1960883.html
Opinions on Advancing the Green and Low-Carbon Transition and Strengthening the Building of the National Carbon Market
https://www.gov.cn/zhengce/202508/content_7037717.htm
China January-July online retail sales
https://www.mofcom.gov.cn/xwfb/sjfzrfb/art/2025/art_6a708140daa94f94bab4845cafba7984.html
European Chamber event: Sustainable Supply Chain Conference
https://www.europeanchamber.com.cn/en/upcoming-events/28050/Sustainable_Supply_Chain_Conference_Crafting_Resilient_and_Circular_Green_Supply_Chains_for_a_Connected_World
Transcript:
XINHE: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 27th August 2025.
(MUSIC)
XINHE: According to data released by China’s Ministry of Commerce on 22nd August, the country’s actual use of foreign direct investment declined in the first seven months of 2025 compared to the same period last year.
MARIANN: In the January-July period, China’s utilised FDI was 467 billion yuan. This was 13.4 per cent lower than in the first seven months of 2024. However, the pace of decline slowed from that recorded in the first half of this year. Nearly three quarters of the total amount of FDI was used in the services sector, with the rest channelled into manufacturing.
(MUSIC)
XINHE: Data published by the National Bureau of Statistics on 27th August showed that profits at larger industrial firms declined in the first seven months of the year compared to the same period last year.
MARIANN: At 1.7 per cent, the pace of decline in industrial profits was slightly slower than in the first half of the year. The fall in the headline figure was largely due to a steep drop in mining profits, with the other two main industrial sectors of manufacturing and utilities still recording profit increases. In fact, the pace of growth in manufacturing profits accelerated from June, to 6.8 per cent in July, which helped narrow the overall decline in industrial profits. This was largely due to a rapid rebound in the raw material manufacturing industry, which went from a 5 per cent year-on-year decline in profits in June to a nearly 37 per cent increase in July. Meanwhile, despite ongoing measures to boost consumption, the consumer goods manufacturing industry continued to make losses in July, albeit the fall in profits narrowed from the previous month.
(MUSIC)
XINHE: On 25th August, the Communist Party of China’s Central Committee and the State Council jointly issued a document containing 17 points on promoting the country’s green transition.
MARIANN: The Opinions on Advancing the Green and Low-Carbon Transition and Strengthening the Building of the National Carbon Market sets out a list of main objectives. These include a 2027 deadline for the national carbon emissions trading market to cover the main emitting industrial sectors and for the national voluntary greenhouse gas emission reduction trading market to achieve full coverage of all key areas. The document also sets out development goals for the national carbon emission and national voluntary greenhouse gas emission reduction trading markets, including that the latter should be aligned with international standards by 2030.
(MUSIC)
XINHE: On 22nd August, China’s Ministry of Commerce said that the country’s e-commerce sector grew steadily in the first seven months of the year.
MARIANN: The ministry cited data from the statistics bureau saying that in the January-July period, the total value of online retail sales increased 9.2 per cent year-on-year, with the sales of personal computers, smartwatches and other smart wearables surging almost 30 per cent from the previous year. Online services sales, including in the areas of tourism, catering, culture and entertainment also increased significantly.
(MUSIC)
XINHE: For European companies operating in China, a rapidly evolving regulatory environment increases compliance complexities. New regulations, including the European Union’s Corporate Sustainability Due Diligence Directive, China’s Circular Economy Promotion Law, and the 14th Five-Year Plan for Circular Economy Development, are raising the bar for environmental, social, and governance practices.
MARIANN: The European Chamber’s Shanghai Chapter is hosting a conference dedicated to sustainable supply chains to offer practical strategies to build supply chains that prioritise responsibility, resilience, and efficiency.
XINHE: Join us in Shanghai on 4th September to find out how innovative sustainable finance solutions can accelerate investments and green transformation and gain insights into Shanghai’s evolving policy landscape designed to promote carbon emission reduction across corporate supply chains.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s new ‘K’ visa;
- July retail sales and industrial output; and
- China’s extension of the anti-subsidy investigation into EU dairy products.
Listeners are also invited to join the Sustainable Supply Chain Conference on 4th September in Shanghai.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
K visa
https://www.gov.cn/zhengce/zhengceku/202508/content_7036508.htm
https://www.mfa.gov.cn/wjbxw_new/202508/t20250814_11690096.shtml
https://english.www.gov.cn/policies/latestreleases/202508/14/content_WS689dd0d3c6d0868f4e8f4d1e.html
Retail sales
https://www.stats.gov.cn/sj/zxfb/202508/t20250815_1960783.html
https://www.stats.gov.cn/sj/sjjd/202508/t20250815_1960808.html
Industrial output
https://www.stats.gov.cn/sj/zxfb/202508/t20250815_1960790.html
https://www.stats.gov.cn/sj/sjjd/202508/t20250815_1960811.html
Extension of anti-subsidy investigation into EU dairy products
https://www.mofcom.gov.cn/zcfb/zc/art/2025/art_bced1803c632419c8277bcc87d4bf8ff.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 20th August 2025.
(MUSIC)
RUI: On 14th August the State Council announced an amendment to the Regulations of the People’s Republic of China on Administration of the Entry and Exit of Foreigners with the creation of a new visa category for foreign nationals.
XINHE: The new ‘K’ visa will be available to a limited group of young science and technology professionals, with applicants required to meet specific requirements. The K visa will offer a greater number of entries, longer durations of stay and longer validity periods compared to other visitor visas. According to the announcement, K visa holders will be permitted to “engage in exchanges in fields such as education, culture, and science and technology, as well as relevant entrepreneurial and business activities.”
The European Chamber has consistently advocated for China to offer a more accessible visa regime, and the K visa seems to be a step in the right direction. However, it will only be possible to assess its impact once the relevant implementing polices have been released. The application process will be an important factor in determining successful uptake, considering K visa applicants will be subject to specific educational background or work experience requirements—much like the Z, or work visa—which could make applications more burdensome compared to other visitor visas. The scope of activities that K visa holders can engage in during their visit also needs to be clarified. For example, the ability to engage in “entrepreneurial and business activities” suggests that a K visa holder could come to China to start a business; however, under current regulations, working at a business is only permitted once a work permit and work residence permit have been obtained. Further details are expected before the amended regulation comes into effect on 1st October.
(MUSIC)
RUI: China’s retail sales grew just 3.7 per cent year-on-year in July, according to data released on 15th August by the National Bureau of Statistics, or NBS.
XINHE: The figure missed expectations, falling significantly from 4.8 per cent year-on-year growth in June. Slow growth in the automotive sector was partly to blame, with a higher rate of 4.3 per cent growth recorded for all products excluding automobiles. A statistician at the NBS put the lacklustre performance down partially to extreme weather, a reason also cited by the bureau for several other disappointing July economic indicators.
(MUSIC)
RUI: Industrial output grew by 5.7 per cent year-on-year in July, according to data also released by the NBS on 15th August.
XINHE: Down from 6.8 per cent in June, July’s figure is the lowest since November 2024. In a breakdown of sectors, manufacturing saw the highest growth rate at 6.2 per cent, but this figure is still down from 7.4 per cent recorded for the sector in June. Although utilities recorded the lowest July growth rate at 3.3 per cent, this was a significant improvement from the 1.8 per cent growth recorded in June. Despite the sluggish performance, China remains on track to reach its GDP growth target of “around 5 per cent”, meaning that policymakers are unlikely to take any major corrective actions in the second half of the year.
(MUSIC)
RUI: China’s anti-subsidy investigation into EU dairy products will be extended by an additional six months, according to a Ministry of Commerce announcement on 18th August.
XINHE: The only reason given for the decision—which will push the investigation until at least February 2026—is the complexity of the case. China’s probe into EU dairy was launched in August 2024, and is widely seen as a potential bargaining chip to help reach a deal to suspend the EU’s tariffs on Chinese EVs. The extension should allow more time for negotiations to take place without causing an additional escalation in EU-China tensions.
(MUSIC)
RUI: Join us in Shanghai on 4th September for the European Chamber’s Sustainable Supply Chain Conference.
XINHE: During the event, a lineup of experts will discuss how businesses can improve supply chain sustainability, resilience and efficiency. Optimising supply chain strategies remains a top priority for Chamber members, with more than 70 per cent of respondents to the Chamber’s Business Confidence Survey 2025 indicating that they had conducted supply chain reviews in the past two years, and a majority of those having made subsequent adjustments.
RUI: Visit the European Chamber’s website and click on ‘Events’ to view more details and register for this conference as well as other upcoming events.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- July Consumer and Producer Price Indices;
- US and China extended tariff pause;
- July foreign trade data; and
- Implementation guidelines for Private Economy Promotion Law.
European Chamber’s 9th Sustainable Business Awards are open for applications until 14th September. Join the online information session on 28th August to learn more.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
CPI and PPI
https://www.stats.gov.cn/sj/zxfbhjd/202508/t20250809_1960634.html
https://www.stats.gov.cn/sj/zxfbhjd/202508/t20250809_1960635.html
https://www.stats.gov.cn/sj/zxfbhjd/202508/t20250809_1960633.html
US-China tariffs
https://www.whitehouse.gov/presidential-actions/2025/08/further-modifying-reciprocal-tariff-rates-to-reflect-ongoing-discussions-with-the-peoples-republic-of-china/
https://www.whitehouse.gov/fact-sheets/2025/08/fact-sheet-president-donald-j-trump-continues-the-suspension-of-the-heightened-tariffs-on-china/
https://www.news.cn/20250812/51f8bbe50ab84e1ab1707fa1caeedff6/c.html
https://www.gov.cn/zhengce/zhengceku/202508/content_7036104.htm
Foreign trade data
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6661554/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6661684/index.html
Law on Promoting the Private Economy implementation guidelines
https://www.court.gov.cn/zixun/xiangqing/473191.html
Sustainable Business Awards Information Session
https://www.europeanchamber.com.cn/en/upcoming-events/28130
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 13th August 2025.
(MUSIC)
RUI: Data on July consumer and producer prices, released on 9th August by the National Bureau of Statistics, further fuelled concerns over the negative economic impact that persistent deflation is having on China’s economy.
MARIANN: July’s consumer price index indicated no change year-on-year, while the producer price index posted a 3.6 per cent year-on-year decline. The latter marks the 34th consecutive month of year-on-year decreases in producer prices, furthering concerns about deflation. While an official interpretation of the data suggested that this was due to seasonal factors and international trade uncertainty, the former would not explain the significant year-on-year decline. The data suggests that government measures to reduce overcapacity and reign in unfair competition have not yet translated into measurable results for the Chinese economy.
(MUSIC)
RUI: On 11th August US President Donald Trump signed a last-minute executive order extending the suspension of “heightened tariffs” on Chinese goods for an additional 90 days. China announced an extension of its suspension of additional tariffs on US goods shortly after.
MARIANN: The move—which comes just before the 90-day tariff pause was set to expire—follows US-China trade talks that took place in Stockholm last month. The negotiations ended with mixed messaging, with the Chinese side suggesting that an agreement to extend the pause had been reached while the US side insisted that nothing could be agreed without Donald Trump’s approval. Monday’s executive order and the resulting Chinese announcement mean that the current 10 per cent reciprocal tariff rate will stay in place until 10th November. Additional tariffs, including the US’s 20 per cent tariff intended to punish China for its alleged involvement in the export of fentanyl and fentanyl precursor chemicals to the US, as well as tariffs on some goods that were in place before Donald Trump’s second term started this January, will continue to apply above the baseline 10 per cent. In addition, China will continue the suspension of some non-tariff measures, including some export controls. While the extended pause indicates a lack of appetite from both sides to return to the high tariff levels seen in April, the 90-day timeframe does not provide businesses with enough certainty to make long-term plans.
(MUSIC)
RUI: On 7th August the General Administration of Customs released China’s foreign trade data for July, recording growth in both exports and imports.
MARIANN: Exports grew at the highest year-on-year rate since April at 7.2 per cent, while imports jumped to the highest year-on-year level since July 2024 at 4.1 per cent. The growth came during the last full month of the first 90-day tariff pause between the United States and China, which was set to end on 12th August prior to the last-minute extension. The July trade data represents purchasing decisions made early in the tariff pause, if not before. Given the uncertainty about whether the pause would be extended, many businesses seem to have frontloaded exports in anticipation of tariff levels rising after 12th August.
(MUSIC)
RUI: On 8th August, China’s Supreme Court issued the implementation guidelines for the Law on Promoting the Private Economy, further clarifying how the new law should be implemented by courts.
MARIANN: China’s Law on Promoting the Private Economy came into effect on 20th May 2025, and is designed to provide greater legal protections for private businesses. While neither the law nor its implementing guidelines introduce any major reforms, they do aim to ensure that the existing rights of private businesses are better protected. The guidelines include specific provisions for courts to handle disputes between private businesses and local governments, with the intention to clamp down on a variety of behaviours that hurt the business environment. It remains to be seen how effective the law will be, given that, in many cases, private businesses will have to take cases against local governments to court—which would potentially damage their relationships with important stakeholders—before they could expect to see a resolution.
(MUSIC)
RUI: This year, the European Chamber will host the 9th Sustainable Business Awards, designed to advance sustainability awareness and promote responsible business models.
MARIANN: This year’s awards include 11 unique categories, covering a variety of areas like leadership, supply chain development and talent empowerment. Companies can nominate themselves until 14th September by filling out an application form available on the Chamber’s website.
RUI: To learn more, join us for an online information session on 28th August during which further details about the application process will be shared.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China July Purchasing Managers’ Indices (PMI);
- Consumer goods trade-in programme in the fourth quarter;
- Politburo meeting on economic work priorities; and
- Compliance guidelines for fee collection by online platforms.
The Chamber is revisiting a quarter century of advocacy in China through the EU-China Business Chronicle Series.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Official July manufacturing and non-manufacturing PMI (NBS)
https://www.stats.gov.cn/sj/zxfb/202507/t20250731_1960551.html
S&P Global China General Manufacturing and Services PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/7e7d7a1b6a374fdbafc02a0bda3c9f3b
https://www.pmi.spglobal.com/Public/Home/PressRelease/37b333939459450d842df110bbc7496a
Consumer goods trade-in programme
https://www.gov.cn/lianbo/bumen/202508/content_7034862.htm
https://english.www.gov.cn/news/202508/01/content_WS688c5330c6d0868f4e8f49a4.html
Politburo meeting
http://www.news.cn/politics/leaders/20250730/e41e27baa42543969bb27e4f7187e848/c.html
Online platform fees
https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/jjjzs/art/2025/art_e4eca064b20843c6a97ead0c94fda00e.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 6th August 2025.
(MUSIC)
RUI: Data released by the National Bureau of Statistics at the end of last month showed that manufacturing activity in China went into a fourth consecutive month of contraction in July. At the same time, growth in the non-manufacturing sector—comprising services and construction—decelerated to the slowest level since last November.
MARIANN: The official manufacturing purchasing managers’ index, or PMI, stood at 49.3 points in July – the lowest level recorded since April. Readings below 50 points indicate contraction.
The decline in overall activity was propelled by a sharp drop in new orders, with demand slipping back into contraction territory after a brief expansion in May. A persistent fall in export orders continued and even accelerated during the past month.
The non-manufacturing PMI stood at 50.1 points, as growth in construction activity slowed and services activity stagnated in July amid declining demand.
(MUSIC)
RUI: Private surveys conducted by S&P Global—formerly in collaboration with Caixin—showed a similar picture of China’s manufacturing activity, with the S&P Global China General Manufacturing PMI dropping to 49.5 points in July. Service sector activity fared better, expanding at the fastest pace since May.
MARIANN: Much as the official PMI data did, S&P Global’s findings also linked the drop in manufacturing activity to a slowdown in growth of new orders, which was shown to result in a scaling back of production.
Services PMI, meanwhile, came in at 52.6 points for July, up from the previous month. The expansion in July marks over two and a half years of continuous growth in services activity. Service prices rose for the first time since January and services firms expanded their workforce, according to data from S&P. The expansion comes on the back of a recovery in export volumes amid a lull in US-China trade tensions. Although service providers do not directly produce tariffed products, they often have goods-sector clients that do.
(MUSIC)
RUI: On 1st August, the National Development and Reform Commission confirmed that an additional 69 billion Chinese yuan in funds for China’s consumer goods trade-in programme would be released for the fourth quarter of the year.
MARIANN: This will complete the 300 billion Chinese yuan in funding from special treasury bonds that was allocated for local governments to implement the trade-in programme throughout 2025. The programme—which subsidises a range of consumer goods, including cars and home appliances—is intended to boost household consumption amidst the ongoing economic slowdown. While policymakers have been conservative with the use of direct-to-consumer subsidies, the trade-in programme—which is intended to help consumers replace outdated and inefficient technology—is an exception. According to the European Chamber’s Business Confidence Survey 2025, China’s economic slowdown remains the top challenge to members’ future business, with the need to boost domestic demand now a high advocacy priority.
(MUSIC)
RUI: On 30th July, the Political Bureau of the Communist Party of China Central Committee held a meeting focused on the country’s economic situation and discussed work priorities for the second half of the year.
MARIANN: The meeting readout includes calls to “regulate disorderly competition” and “promote capacity management in key industries”. Unhealthy competition in some sectors has led to a situation in which companies invest ever increasing resources without generating commensurate returns, a phenomenon sometimes referred to as ‘disorderly competition’ or ‘involution’. Regulating ‘disorderly competition’, as well as overcapacity—two problems that are interlinked—will likely continue to be a priority for policymakers for the rest of the year. During the meeting, it was also confirmed that the fourth plenum—during which the 15th Five-year Plan will be discussed—will take place in October.
(MUSIC)
RUI: On 2nd August, the State Administration for Market Regulation released new guidelines for fee collection by online platform operators in a move that appears to be intended to reduce unhealthy competition by e-commerce sites.
MARIANN: The guidelines—which are based on China’s Pricing Law and E-commerce Law—further restrict how platforms charge merchants for various services. They also explicitly prohibit platforms from forcing merchants to take part in promotions or sales, a move intended to discourage artificially low prices. E-commerce platforms have been among the most visible examples of ‘disorderly competition’ in China, with an ongoing price war between platforms that has come largely at the expense of individual merchants. Platforms—which control the algorithms that determine how visible a merchant’s products are to consumers—aim to ensure that the sellers they host deliver the lowest prices possible. Amid ongoing official calls to crackdown on various forms of undesirable competition, some platforms have taken steps to protect sellers, but further regulation—such as the amended Pricing Law, which is currently undergoing public comment—is likely necessary to help facilitate a return to healthy, sustainable competition.
(MUSIC)
RUI: To celebrate the European Chamber’s 25th anniversary, we are revisiting a quarter century of advocacy in China through the EU-China Business Chronicle Series, available on our official WeChat account.
MARIANN: In the series, you can read about milestones throughout the Chamber’s history, such as the first Position Paper released in 2001, or the founding of our Shanghai Chapter in 2002.
RUI: If you haven’t already, please follow the European Chamber’s official WeChat account to understand more about the Chamber’s work through the EU-China Business Chronicle Series.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China Jan-Jun industrial profits;
- China’s tax revenue during the 14th five-year plan;
- AI global governance action plan; and
- EU China Summit.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Industrial profits
https://www.stats.gov.cn/sj/zxfbhjd/202507/t20250727_1960504.html
https://www.stats.gov.cn/sj/zxfbhjd/202507/t20250727_1960503.html
Government revenue
https://www.chinatax.gov.cn/chinatax/n810219/n810724/c5242033/content.html
https://gks.mof.gov.cn/tongjishuju/202507/t20250725_3968635.htm
AI Governance
https://www.gov.cn/yaowen/liebiao/202507/content_7033929.htm
EU China summit
https://www.consilium.europa.eu/en/meetings/international-summit/2025/07/24/
https://ec.europa.eu/commission/presscorner/detail/en/ac_25_1912
https://www.mfa.gov.cn/zyxw/202507/t20250724_11676247.shtml
https://ec.europa.eu/commission/presscorner/detail/en/statement_25_1902
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 30th July 2025.
(MUSIC)
RUI: The drop in China’s industrial profits accelerated in June, resulting in a 1.8 per cent year-on-year decline recorded for the first half of the year, according to data released by the National Bureau of Statistics on 27th July.
MARIANN: This is the steepest fall recorded so far this year. The decline comes alongside deepening producer price deflation, driven by overcapacity and low domestic demand. Yu Weining, a statistician at the statistics bureau commenting on the data noted the need for China to further strengthen “internal circulation” amidst a “complicated external environment.” While the underlying problems impacting China’s economy are widely recognised and stimulus measures have been put in place, more time is needed before it will be clear how successful these remedies have been.
(MUSIC)
RUI: China’s tax revenue during the 14th five-year plan period is estimated to total over 155 trillion Chinese yuan, according to Commissioner of the State Taxation Administration Hu Jinglin speaking at a press conference held by the State Council Information Office on 28th July.
MARIANN: Discussing the estimated figures for the period between 2021 and the end of 2025, Commissioner Hu Jinglin noted that tax revenues would account for about 80 per cent of the government’s total revenue over the period. Of the estimated total of 155 trillion Chinese yuan, more than 85 trillion is expected to come from conventional taxes, while a further 70 trillion will come from social insurance payments and land transfer proceeds. He suggested that relatively strong tax revenues indicate positive performance of the Chinese economy over the period. The press conference follows the release of June fiscal revenue data by the Ministry of Finance on 25th July, which showed that tax revenue fell 1.2 per cent in the first half of the year, while non-tax revenue grew 3.7 per cent, resulting in a 0.3 per cent decline in fiscal revenue for the first half of 2025.
(MUSIC)
RUI: On 26th July, China released a plan to approach global artificial intelligence—or AI—governance.
MARIANN: The release of the plan coincided with the opening of the World Artificial Intelligence Conference in Shanghai, where Premier Li Qiang spoke, expressing the need to form a global AI governance framework as soon as possible. The move comes as China aims to offer an alternative model to the United States, which is working to counter Chinese influence in AI. The plan calls for a special focus on AI in the Global South and was supplemented by a call by China to establish a global AI cooperation body headquartered in Shanghai.
(MUSIC)
RUI: On 24th July, President of the European Council António Costa, and President of the European Commission Ursula von der Leyen met with President Xi Jinping and Premier Li Qiang for the 25th EU-China summit in Beijing.
MARIANN: While the summit marked the 50th anniversary of the establishment of EU-China relations, expectations going into the meeting were low amid heightened tensions over issues including the EU-China trade imbalance and China’s perceived support for Russia’s war in Ukraine. The summit, however, saw progress on rare earth export controls, with an agreement reached for a new mechanism to immediately check for supply chain bottlenecks. The EU and China also released a joint press statement on climate, with both sides emphasising the need to demonstrate leadership and uphold the Paris Agreement.
(MUSIC)
RUI: On the margins of the EU-China summit, China’s Ministry of Commerce hosted a business leaders symposium, attended by European Commission President Ursula von der Leyen and Chinese Premier Li Qiang.
MARIANN: During this event, European Chamber President Jens Eskelund delivered a keynote address. In his remarks, he noted that despite the significant value the relationship has generated for both Europe and China, imbalances in the EU-China trade relationship need to be addressed. He further noted that European businesses in China continue to face long-standing regulatory and market access restrictions, with a record high 63 per cent of European Chamber members reporting having missed business opportunities as a result.
RUI: If you have not already, follow the European Chamber’s official WeChat account to receive updates on the Chamber’s advocacy activities as they happen.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China Jan-Jun 2025 foreign direct investment;
- Measures to encourage foreign-invested enterprises to reinvest in China;
- 2nd EU-China meeting under the Cross-Border Data Flow Communication Mechanism;
- 25th EU-China Summit and Business Roundtable; and
- EU-China Regulatory Exchange on Cosmetics.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China H1 FDI
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_2bf8686d71e24114b437b24c1b7856d3.html
Measures to encourage FIEs to reinvest in China
https://www.ndrc.gov.cn/xwdt/tzgg/202507/t20250718_1399286.html
2nd EU-China meeting under the Cross-Border Data Flow Communication Mechanism
https://mp.weixin.qq.com/s/o1ZIT6-QP0DXeNpJGK4mXA
25th EU-China Summit
https://www.europeanchamber.com.cn/en/press-releases/3735/
EU-China Regulatory Exchange on Cosmetics
https://mp.weixin.qq.com/s/IiACxx35z5CG-aGQriPxUQ
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 23rd July 2025.
(MUSIC)
RUI: According to data published by China’s Ministry of Commerce on 19th July, in the first half of the year the country’s actual use of foreign direct investment continued to trend downward compared to the same period last year.
MARIANN: The total value of utilised FDI was over 423 billion yuan in the January-June period, 15.2 per cent lower than in the first half of last year. This was the sharpest year-on-year decline recorded since February. Nearly three quarters of the total value of FDI was utilised in the services sector, with the remaining one quarter channelled into manufacturing.
(MUSIC)
RUI: On 18th July, China’s National Development and Reform Commission, Ministry of Finance and Ministry of Commerce, along with four other government branches, jointly issued a notice detailing measures aimed at encouraging foreign-invested enterprises in China to reinvest their profits locally.
MARIANN: Support measures listed in the notice include flexible long-term lease of industrial land and other arrangements to reduce land use costs, tax support policies and streamlined processes for newly established entities. The notice also urges the relevant authorities to strengthen the monitoring of reinvestments by foreign-invested firms to better assess their contribution to China’s economic and social development.
For the past two consecutive years the European Chamber’s Business Confidence Survey found that three quarters of respondents plan to reinvest some of their profits earned in the Chinese mainland. At the same time, the value many Chamber members are reinvesting is trending downwards, with 37 per cent of respondents reporting in 2025 that they are planning to invest less than their historical average.
(MUSIC)
RUI: On 17th July, the EU and China held its second meeting under the framework of their bilateral Cross-Border Data Flow Communication Mechanism in Brussels. A key takeaway from the meeting was that the two sides agreed to set up a working group to carry out cooperation on cross-border data transfers in the automotive segment.
MARIANN: The meeting was co-chaired by Sabine Weyand, director general of the Directorate General for Trade of the European Commission, and Wang Jingtao, vice minister of the Cyberspace Administration of China, who launched the mechanism in August 2024. The main goal of the mechanism is to facilitate cross-border transfers of non-personal data for European businesses while ensuring their compliance with Chinese data regulations.
The Chamber’s Business Confidence Survey 2025 showed that the majority of Chamber members are no longer dissatisfied with China’s cross-border data regulations. This was largely due to the improvements seen with the release of the final version of the Cyberspace Administration of China’s Provisions on Regulating and Promoting Cross-border Data Flows in March 2024, which reduced administrative burdens associated with cross-border data transfers. However, one key outstanding issue that continues to pose challenges for companies is that the scope of what constitutes ‘important data’ has still not been clarified.
(MUSIC)
RUI: The 25th EU-China Summit will take place in Beijing on 24th July 2025, during which it is expected that President of the European Council, António Costa, and President of the European Commission, Ursula von der Leyen, will meet with Chinese President Xi Jinping and Chinese Premier Li Qiang. On the margins of the summit, a business roundtable hosted by the Chinese Ministry of Commerce will take place on the same day in Beijing. The roundtable will comprise two sessions: one with EU and Chinese CEOs, and one with EU and Chinese state leaders. European Chamber President Jens Eskelund will speak at the latter session.
MARIANN: It is positive that industry and government representatives from the EU and China are meeting to discuss the two sides’ trade and investment relationship, which has come under increased scrutiny in recent years. The Chamber looks forward to engaging in frank and candid discussions that will pave the way for further talks, including at the working level, with the aim of improving China’s business environment for its member companies.
(MUSIC)
RUI: On 16th July, the Delegation of the European Union to China and the National Medical Products Administration co-organised an event in Beijing with the support of the European Chamber’s Cosmetics Working Group and Cosmetics Europe. The key topic of discussion was the cosmetics regulatory supervision systems in the EU and China.
MARIANN: The event gathered nearly 50 senior representatives from the National Medical Products Administration and other relevant regulatory institutions, as well as industry representatives. Participants engaged in in-depth exchanges on critical issues pertaining to the alignment and differences between EU and Chinese regulatory systems.
RUI: On the same day, the chair and vice chairs of the Chamber’s Cosmetics Working Group attended an exclusive meeting with Xu Jinghe, Deputy Commissioner of the National Medical Products Administration, or NMPA, and Director General Li Fang of the NMPA Cosmetics Supervision Department. The Cosmetics Working Group briefed the NMPA on current industry concerns and expressed its aspiration to participate more actively in future regulatory formulation, establishment and implementation processes, with the goal of fostering deeper EU-China cooperation in the sector.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China second quarter GDP growth;
- Investment in China’s real estate market in June;
- China June industrial output and retail sales; and
- China June foreign trade data.
European Commission Executive Vice President Teresa Ribera and three Commissioners met European Chamber representatives during their visit to China for the 6th EU-China High-Level Environment and Climate Dialogue on 13th and 14th July.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
GDP growth
https://www.stats.gov.cn/sj/zxfbhjd/202507/t20250715_1960414.html
https://www.stats.gov.cn/sj/zxfbhjd/202507/t20250715_1960415.html
Real estate
https://www.stats.gov.cn/sj/zxfb/202507/t20250715_1960410.html
Industrial production and retail sales
https://www.stats.gov.cn/sj/zxfbhjd/202507/t20250715_1960413.html
https://www.stats.gov.cn/sj/zxfbhjd/202507/t20250715_1960409.html
Foreign trade data
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6623728/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6623719/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6623891/index.html
6th China-EU High-Level Environment and Climate Dialogue
https://climate.ec.europa.eu/news-other-reads/news/readout-6th-eu-china-high-level-dialogue-environment-and-climate-2025-07-15_en
https://english.www.gov.cn/news/202507/15/content_WS687587e6c6d0868f4e8f423b.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 16th July 2025.
(MUSIC)
RUI: On 15th July, the National Bureau of Statistics—or NBS—released China’s second quarter gross domestic product—or GDP—data, which showed growth of 5.2 per cent.
MARIANN: The figure represents a modest slowdown compared with the first quarter of 2025, when growth measured 5.4 per cent. However, the data suggests that China is still on track to meet its 2025 GDP growth target of around five per cent. In a press conference in conjunction with the data release, NBS Deputy Commissioner Sheng Laiyun noted that GDP growth this year has so far exceeded last year’s 5 per cent growth rate, something that he put down to overall stability in the Chinese economy. Policymakers will likely view above-target GDP growth as a sign that stimulus measures are working. However, it has yet to be seen if European businesses in China—for whom China’s economic slowdown is the top business challenge according to the European Chamber’s Business Confidence Survey 2025—have seen a positive change.
(MUSIC)
RUI: Investment in China’s real estate market—an ongoing pain point in China’s economy—continued to decline in June, according to data released by the NBS on 14th July.
MARIANN: Real estate investments dropped 11.2 per cent in the first six months of 2025 and home prices continued to decline. Following the release of June data, NBS Deputy Commissioner Sheng Laiyun noted that more measures were needed to return the real estate market to a stable situation, a sign that more stimulus measures directed at the real estate sector are likely on the way.
(MUSIC)
RUI: On 15th July, the NBS released June industrial output and retail sales data, with both segments posting growth year-on-year.
MARIANN: China’s industrial output grew 6.8 per cent year-on-year in June, up from 5.8 per cent in May. This resulted in a 6.4 per cent growth rate overall for the first half of 2025 compared to the same period last year. Retail sales grew 4.8 per cent year on year in June, down significantly from the 6.4 per cent year-on-year growth in May, suggesting that stimulus measures directed at the sector may not continue to bring sustainable growth throughout the year. Taking June data into account, the first six months of the year saw 5 per cent growth in retail sales overall.
(MUSIC)
RUI: On 14th July, the General Administration of Customs released trade data for June, with China posting year-on-year increases in both imports and exports.
MARIANN: Exports grew 5.8 per cent in USD terms or 7.2 per cent in Chinese yuan terms. Imports grew 1.1 per cent in USD terms or 2.3 per cent in Chinese yuan terms, marking the first time imports have grown in 2025. The growth comes amidst a temporary reduction in US-China tariffs, resulting in a more modest decline in Chinese exports to the United States compared to previous months. While a sudden increase in tariff levels could once again result in a rapid fluctuation in US-China trade, businesses have already begun shifting a significant volume of shipments to other markets.
(MUSIC)
RUI: On 14th June, Executive Vice President of the European Commission for a Clean, Just and Competitive Transition Teresa Ribera and Chinese Vice Premier Ding Xuexiang co-chaired the 6th EU-China High-Level Environment and Climate Dialogue in Beijing. EU Commissioners Wopke Hoekstra, Jessika Roswall and Dan Jørgensen joined senior Chinese counterparts for a plenary session and two sectoral sessions dedicated to the circular economy and energy.
MARIANN: According to the meeting readouts from the EU and China, both sides reaffirmed their commitment to multilateralism, and pledged to work together towards the 30th Conference of the Parties to the United Nations Framework Convention on Climate Change, or COP30, which will be held in November in Brazil. They discussed areas of future cooperation, including carbon markets and the EU’s Carbon Border Adjustment Mechanism, or CBAM, as well as continued collaboration on water, deforestation and wildlife. Commissioner Roswall reiterated the two sides’ commitment to the 2018 bilateral memorandum of understanding on circular economy, and discussed a future roadmap for sharing best practices and addressing relevant opportunities and challenges. Commissioner Jørgensen and Administrator of China’s National Energy Administration Wang Hongzhi signed a joint readout setting accelerated clean-energy transition targets and ensuring energy security as core objectives.
RUI: Ahead of the bilateral meetings, on 13th and 14th July, European Chamber representatives had met with Executive Vice President Ribera and the three Commissioners participating in the talks.
MARIANN: During the meetings, Chamber representatives from relevant sectors provided updates on key advocacy issues including plastic recycling, water treatment, green electricity and export controls. Joining the meeting with Executive Vice President Ribera, European Chamber Executive Committee Member Bruno Weil provided recommendations on how to address imbalances in the EU-China relationship, aimed at ensuring engagement with China brings value to the EU.
RUI: If you have not already, you can follow the European Chamber’s official WeChat account to read more about the Chamber’s latest advocacy activities.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Ministry of Commerce’s final ruling of anti-dumping probe into EU brandy imports;
- Ministry of Finance announcement of restrictions on medical device imports from the EU;
- China June Consumer Price Index and Producer Price Index; and
- Caixin China Services Purchasing Managers Index in June.
Listeners are also invited to attend the webinar on 10th July to hear experts’ insights on the EU-China Comprehensive Agreement on Investment and EU-China trade relations.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China issues final ruling of anti-dumping probe into EU brandy imports
Commerce ministry: China accepts price undertakings from 34 EU firms in final brandy anti-dumping probe ruling
Ministry of Finance announcement of restrictions on medical device imports from the EU
Industrial producer prices fell 3.6% year-on-year in June 2025 – National Bureau of Statistics
国家统计局城市司首席统计师董莉娟解读2025年6月份CPI和PPI数据 – 国家统计局
Caixin China Service PMI
Driving into CAI: Considerations and Perspectives for EU-China Trade Relations
European Chamber Membership
Transcript:
Robbie: Hello and welcome to China ShortCuts,
Xinhe: The European Chamber’s weekly catchup on China’s business landscape.
Robbie: This episode was recorded on 9th July 2025.
(MUSIC)
Xinhe: On 4th July, China’s Ministry of Commerce announced the final ruling of its anti-dumping investigation into brandy imports from the European Union, following an initial investigation launched in January 2024.
Robbie: MOFCOM ruled that brandy imported from the EU is being dumped in the Chinese market, with duties ranging from 27.7 per cent to 34.9 per cent to be levied on European brandy imports as a result.
One day later, on 5th July, China’s Ministry of Commerce reported it had accepted price undertakings from 34 EU brandy producers, which had agreed to not to sell their products below a certain price threshold in the China market and will therefore be exempt from the new duties.
(MUSIC)
Xinhe: On 6th July, China’s Ministry of Finance announced that European medical device manufacturers would be excluded from government procurement tenders worth over 45 million renminbi, or approximately 5.3 million euros.
The development follows the EU electing last month to restrict Chinese medical device manufacturers from bidding for relevant EU public procurement tenders with a value over 5 million euros for a period of five years.
Robbie: The European Chamber is concerned that the Ministry of Finance’s announcement lacked specificity, increasing the uncertainty faced by European companies operating in China, and raising the risk that local government authorities—responsible for issuing public tenders—may enforce the measure in an overly stringent manner.
Xinhe: Although the Ministry of Finance’s notice stated that European-invested enterprises in China—or在华欧资企业—are to be exempt from the restriction, no guidelines have been issued clarifying what constitutes a ‘European-invested enterprise’.
Robbie: In addition, it is yet to clarified:
(MUSIC)
Xinhe: Amid ongoing prices wars in several saturated industry segments, deflationary pressures in China intensified in June, as producer prices entered their 33rd consecutive month of decline.
Robbie: Data published by the Chinese National Bureau of Statistics on 9th July revealed that producer prices fell 3.6 per cent year-on-year, the sharpest decrease recorded since July 2023.
China’s Consumer Price Index—or CPI—registered a marginal 0.1% increase in June, relative to a year prior. However, the reading came on top of an already low base from last year and the CPI remains well short of the Chinese Government’s target of achieving ‘around 2 per cent’ consumer price inflation in 2025.
(MUSIC)
Xinhe: Findings of a private survey released on 2nd July suggest that China’s services sector continued to expand in June, for the 30th consecutive month.
Robbie: The Caixin China Services Purchasing Managers Index—which is based on surveys conducted by S&P Global and sent to purchasing managers at around 650 private and state-owned companies—stood at 50.6 points in June. The rate of growth slowed, however, down from 51.1 points in May.
Demand for services also increased at a slower pace, with new export orders falling for the second month in a row and at the fastest pace since December 2022. Employment at services firms contracted as a result, with survey respondents also linking this to cost concerns.
(MUSIC)
Xinhe: With multinational companies operating in an increasingly complex global environment, keeping up to date with the latest regulatory developments is extremely important.
Robbie: Negotiated over seven years, the EU-China Comprehensive Agreement on Investment (CAI) had been set to put the two markets on a course for deepened engagement. However, after the EU and China reached a political agreement, ratification was put on ice in early 2021, after China sanctioned several European entities and members of the European parliament.
After China unilaterally lifted sanctions on European members of parliament in April this year, the possibility of the CAI being resurrected has been raised, particular in Chinese media.
Join us online on 10th July to hear experts’ insights on whether the terms of the agreement remains relevant and ambitious enough—and whether ratifying it could help put the EU and China on course to achieve a more sustainable relationship—or whether there are alternatives that would provide more value to the EU-China relationship. This event is open to both European Chamber members and non-members alike.
Xinhe: To learn more about the benefits of becoming a Chamber member, please click the link in the show notes.
(MUSIC)
Robbie: Thanks for listening, and don’t forget to tune in again next week.
Xinhe: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China January-May industrial profits;
- US-China trade talks in London;
- China May official purchasing managers’ index; and
- New tax credit policy for FIE reinvestments.
Listeners are also invited to join an event From Global Trends to Local Insight – Understanding Consumer Behaviour in China on 9th July in Beijing or online.
Contact:We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China industrial profits January-May 2025 (NBS)
https://www.stats.gov.cn/sj/zxfb/202506/t20250627_1960270.html
Details of the US-China trade talks held in London (MOFCOM)
https://www.mofcom.gov.cn/syxwfb/art/2025/art_00a79a2980e44ee8b8a2325786979e47.html
China official PMIs, June (NBS)
https://www.stats.gov.cn/sj/zxfb/202506/t20250630_1960283.html
New tax credit policy for FIE reinvestments
https://www.mofcom.gov.cn/zcfb/wgtzgl/art/2025/art_6454974b7ef047aa8bece340c5898950.html
Chamber event: From Global Trends to Local Insight – Understanding Consumer Behaviour in China
https://www.europeanchamber.com.cn/en/upcoming-events/27943/_Hybrid_From_Global_Trends_to_Local_Insights_Understanding_Consumer_Behaviour_in_China
Transcript:
XINHE: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 2nd July 2025.
(MUSIC)
XINHE: According to data released by the National Bureau of Statistics on 27th June, in the January-May period, profits at larger industrial firms in China declined at the sharpest year-on-year rate.
MARIANN: Industrial profits dropped 1.1 per cent in the first five months of the year compared to the same period last year. Total profits for the first five months of the year were at the second lowest level of the past five years. A breakdown by the three key industrial sectors showed a significant drop in mining profits and a continued slowdown in the increase of manufacturing profits.
The Chamber’s Business Confidence Survey 2025 found that European businesses’ concerns over economic headwinds weigh on sentiment over future profitability and growth, with record high levels of respondents expressing pessimism over their two-year outlook in both regards. A key challenge for profitability is deflation: producer prices declined for the 32nd consecutive month in May 2025.
(MUSIC)
XINHE: In a statement released on 27th June, China’s Ministry of Commerce confirmed that the United States and China reached additional agreements during their trade talks held in London on 9th and 10th June.
MARIANN: New details of the bilateral trade framework include a pledge from China to speed up the export of rare earth minerals to the US by reviewing and approving export applications that meet the stipulated conditions. The statement also said that the US will cancel a series of restrictive measures against China in return, but it did not give further details on which measures would be revoked.
Crucially, at the London meeting, the two sides reaffirmed the implementation of the agreement reached during trade talks held in Geneva in May. A key breakthrough at the Geneva meeting was that the two sides agreed to remove 91 per cent of the tariffs mutually imposed in April. A further 24 per cent of tariffs were suspended for 90 days. These moves brought US tariff rates on Chinese goods to 30 per cent, while US imports to China are currently subject to 10 per cent tariffs.
(MUSIC)
XINHE: Data published by the National Bureau of Statistics on 30th June showed that manufacturing activity in China continued to decline in June. However, the rate of contraction narrowed as supply and demand both picked up from the previous month.
MARIANN: The official manufacturing purchasing managers’ index or PMI stood at 49.7 points in June. This was the highest level in three-months, but it still missed the 50-point mark, which separates growth from contraction. It was the second month in a row when large manufacturing firms were the only ones able to expand their activity, with their smaller counterparts still reporting contraction. Overall, both production and new orders increased, however, growth in demand was moderate. New export and import orders both continued to fall, and headcount reduction continued as well.
The official non-manufacturing PMI, which comprises construction and services data, stood at 50.5 points in June. This was the second highest level recorded in 2025 so far. While subindexes improved from the previous month, most key indicators, including new orders, sales prices and employment remained in contraction territory.
(MUSIC)
XINHE: On 30th June, the Ministry of Finance, the State Administration of Taxation and the Ministry of Commerce jointly announced a new tax credit policy for the reinvestments of foreign investors’ dividends In China.
MARIANN: According to the announcement, when foreign-invested companies that are resident in China fund their direct investments in the country from dividends accumulated domestically, they will be granted a ten per cent tax credit. Qualifying investors will also be able to carry forward unused credit. The measure retroactively takes effect from 1st January 2025 for a three-year period, meaning that investors can apply for tax credits on reinvestments made since the beginning of the current year.
MUSIC)
XINHE: In today’s fast-paced and highly competitive global market, understanding consumers is more critical than ever. This is particularly true in China, where the consumer landscape is both dynamic and complex.
MARIANN: To navigate this market, brands must understand the unique preferences, purchasing habits and cultural nuances that shape Chinese consumer behaviour.
XINHE: Join us on 9th July online or in person in Beijing to hear experts’ insights on consumer behaviour trends both globally and within the Chinese market and to learn how these trends shaped the recent 6.18 shopping festival in China. This event is exclusively open to European Chamber members. If you are not a member yet, but would like to benefit from our services, please follow the link in the shownotes for details on how to join.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China January-May total use of foreign direct investment;
- China January-May fiscal revenue;
- Tax Reporting for internet platform enterprises; and
- Curbing “involution-style” competition.
The May/June 2025 edition of the Chamber’s bimonthly magazine, EURObiz, is available to download from the Chamber’s website.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China total use of FDI, January-May 2025 (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_10c6c4fd380c403e944deac872447b6e.html
http://english.scio.gov.cn/pressroom/2025-06/23/content_117942050.html
Fiscal revenue
https://gks.mof.gov.cn/tongjishuju/202506/t20250620_3966204.htm
Tax Reporting for Internet Platform Enterprises
https://www.gov.cn/yaowen/liebiao/202506/content_7029056.htm
https://english.news.cn/20250623/cfb6110650a4456cab826ec7db15bbb7/c.html
Curbing “involution-style” competition
https://www.chinanews.com.cn/gn/2025/06-23/10436434.shtml
EURObiz Issue 86 (May/June 2025)
https://www.europeanchamber.com.cn/en/eurobiz-archive-2025
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 25th June 2025.
(MUSIC)
RUI: Data released by the Ministry of Commerce on 20th June showed that the actual use of foreign direct investment—or FDI—in China continued to decline year-on-year, now down 13.2 per cent for the January-May 2025 period.
MARIANN: The ongoing decline is significant, given that FDI levels for the same five months last year were already down nearly 30 per cent year-on-year from 2023. Total reported FDI for the year now stands 358.19 billion Chinese yuan, only slightly above 2020 levels which were depressed amidst global uncertainty caused by the COVID-19 pandemic. The majority of new investment—259.64 billion Chinese yuan—came from service sector investments, while the rest—91.52 billion Chinese yuan— was made up of manufacturing investments. The most invested sectors were e-commerce services, aerospace equipment manufacturing and chemical pharmaceuticals manufacturing. The decline in FDI is evident among European businesses as well. According to the Chamber’s Business Confidence Survey 2025, China is only a top destination for future investments for 12 per cent of respondents, a record low since the question was first asked in 2012.
(MUSIC)
RUI: China’s fiscal revenue fell 0.3 per cent year on year for the first five months of 2025, according to data released by the Ministry of Finance on 20th June.
MARIANN: The decline, made up of a 1.3 per cent drop in tax revenue and a 6.2 per cent increase in non-tax revenue, comes as the Chinese economy continues to suffer in the face of US-China trade tensions. The January to May period saw an 11.9 per cent year-on-year decline in state land-sale revenue, indicative of ongoing challenges in China’s property sector. While additional monetary stimulus measures were announced in early May, it is likely that more time is needed before any impact will be seen.
RUI: On 23rd June, the State Council released the Provisions on Tax-Related Information Reporting by Internet Platform Enterprises, in a move aimed at increasing tax revenue from operators that sell through online platforms.
MARIANN: The new rules come in tandem with a drive to increase tax enforcement. The Provisions will require internet platform operators to submit information on operators that use their platforms, with the stated aim of advancing fair competition by reducing tax avoidance. In a press conference, a spokesperson for the State Taxation Administration emphasised that the Provisions were not intended to increase the tax burden but only aimed at ensuring operators currently underpaying tax would be forced to pay at normal levels.
(MUSIC)
RUI: At a press conference on 23rd June, Huang Haihua, a spokesperson for the Legislative Affairs Commission of the National People’s Congress Standing Committee, announced that a second session would be held this week to deliberate an updated draft of the Law Against Unfair Competition, which now includes specific provisions to prevent ‘involution-style’ or rat race competition.
MARIANN: The updated draft law is among the latest measures intended to address ‘involution’ in China’s economy. Huang noted that the second revision of the draft law was updated based on stakeholder feedback to include measures to rectify ‘involution-style’ competition in the economy, in addition to a specific set of measures aimed at ‘involution-style competition’ on online platforms. The law also takes aim at ‘confusion-based unfair competition’ on online platforms, such as when operators intentionally use trademarks for other products as keywords to confuse consumers.
(MUSIC)
RUI: The May/June edition of the Chamber’s bimonthly magazine—EURObiz—is now available.
MARIANN: This edition focuses on how businesses can thrive in China’s evolving market, particularly in an economy with a notoriously low consumption rate. It contains articles on intellectual property and data protection in China’s ecommerce market, China’s 2025 Action Plan for Stabilising Foreign Investment, how European brands can rethink how they reach Chinese consumers and an update on China’s post-COVID travel recovery.
RUI: You can download the magazine from the Chamber’s website for free.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China May macroeconomic data;
- European Commission President Von der Leyen’s statements at the G7 summit in Canada; and
- 10th EU-China Environment Policy Dialogue.
Listeners are also invited to attend the event Unlocking opportunities in China’s silver economy on 25th June in Beijing. Attendees can also join online.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China May macroeconomic data (NBS)
https://www.stats.gov.cn/sj/zxfb/202506/t20250616_1960173.html
European Commission President Von der Leyen’s statements at the G7 summit in Canada
https://ec.europa.eu/commission/presscorner/detail/en/statement_25_1522
https://ec.europa.eu/commission/presscorner/detail/en/statement_25_1521
10th EU-China Environment Policy Dialogue
https://ec.europa.eu/commission/presscorner/detail/en/speech_25_1495
https://english.www.gov.cn/news/202506/17/content_WS6851316cc6d0868f4e8f3696.html
European Chamber event: Unlocking opportunities in China’s silver economy
https://www.europeanchamber.com.cn/en/upcoming-events/27836/_Hybrid_Unlocking_Opportunities_in_China_s_Silver_Economy_A_Growing_Market_for_Foreign_Investors
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 18th June 2025.
(MUSIC)
RUI: According to data published by the National Bureau of Statistics on 16th June, industrial production growth in China slowed in May, while retail sales growth accelerated. Overall, however, in the first five months of the year, production increased faster than consumption.
MARIANN: Production at larger industrial firms rose 5.8 per cent year-on-year in May. This was the slowest pace of increase recorded since last November. The total value of retail sales surged 6.4 per cent compared to last May – the fastest pace seen in nearly a year and a half. This was not yet enough, however, to offset the trend of lopsided growth in terms of supply and demand: in the first five months of 2025, industrial production rose 6.3 per cent year-on-year, significantly faster than retail sales at 4 per cent.
(MUSIC)
RUI: On 16th June, speaking at the Group of Seven summit held in Canada, European Commission President Ursula Von der Leyen expressed strong criticism of China over its export controls on rare earth minerals and called out the country for its market practices that she said constituted “distortion with intent”.
MARIANN: Speaking on rare earth minerals, Von der Leyen stressed that currently China dominates the global market for rare earth permanent magnets, and accused the country of weaponising this position to undermine competitors in key industries. She warned that even though China has given signals that it may loosen its relevant restrictions, the threat remains. Therefore, she called on members of the G7 to respond in a united manner and create alternatives along the supply chain both in home markets and around the world. In a separate statement delivered during a session on the global economic outlook, Von der Leyen called China’s trade and market practices the G7’s biggest collective problem, accusing China of undercutting intellectual property protections and providing subsidies with the aim of dominating global manufacturing and supply chains.
Commission President Von der Leyen’s tone suggests that the EU finds the imbalance in its trade and economic relationship with China increasingly harmful for its own market and companies.
The Chamber has been sharing its concerns with the Chinese Government that third markets are increasingly likely to take action to protect their own economic interests if China does not address the issue of its growing trade surplus with many of its key trade partners and provide a level playing field for all companies operating in the Chinese market in a timely manner.
(MUSIC)
RUI: On 13th June, the 10th EU-China Environment Policy Dialogue was held in Brussels, with the two sides agreeing to deepen their environmental cooperation.
MARIANN: The dialogue was co-chaired by Jessika Roswall, Commissioner for Environment, Water Resilience and a Competitive Circular Economy of the European Commission and Chinese Minister of Ecology and Environment Huang Runqiu. Areas for further cooperation discussed during the meeting included negotiations for an international plastic pollution agreement, with the final round of negotiations for an international legally binding instrument due in August, air and chemical pollution control, water resource protection and deforestation-free supply chains. The 6th High Level Environment and Climate Dialogue between the EU and China will be held mid-July, during which high-level exchanges will continue on key areas of engagement between the two sides.
(MUSIC)
RUI: China is aging – and fast. In just over two decades, the share of people aged 60 and above has more than doubled, rising from 10.18 per cent in 2000, to 22 per cent in 2024. That is 310 million people today. By 2035, this number is expected to exceed 400 million – roughly the combined populations of the UK and the US. This demographic shift presents not just a social challenge, but also a powerful economic opportunity.
MARIANN: Recognising this potential, the Chinese Government has taken active steps to foster the growth of the so-called ‘silver economy’ – the expanding market for goods and services to people aged 50 and older. In 2024, the first national policy document focused solely on this sector was issued. This landmark initiative outlines increased financial support for elderly care facilities, programmes and services. More recently, the 2025 Action Plan for Stabilising Foreign Investment opened the door for foreign-owned projects in healthcare, education and biotechnology, which may create exciting opportunities for international investors.
RUI: Join us on 25th June online or in person in Beijing for an insightful event supported by the EU SME Centre, which will explore the current landscape and future outlook of China’s silver economy. Find out about key policy updates, consumer trends and practical strategies for entering or finding new opportunities in the sector.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China May foreign trade data;
- China May price indices;
- China services trade (January–April); and
- Meeting between Chinese Minister of Commerce and European Trade Commissioner.
Listeners are also invited to attend the Business Reception Celebrating 50 Years of EU-China Ties on 17th June in Beijing.
Contact:We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China services trade, January-April (MOFCOM)
https://www.mofcom.gov.cn/xwfb/sjfzrfb/art/2025/art_a726aa3b98b84c8e868212baf0ff11bd.html
China foreign trade, May (GAC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6560977/index.html
China May price indexes (NBS)
https://www.stats.gov.cn/sj/zxfb/202506/t20250609_1960093.html
https://www.stats.gov.cn/sj/zxfb/202506/t20250609_1960094.html
MOFCOM statement on Wang-Šefčovič meeting
https://www.mofcom.gov.cn/xwfb/xwfyrth/art/2025/art_48afb56c77ee40a3b6847718680146b5.html
European Chamber event: Business Reception Celebrating 50 Years of EU-China ties
https://www.europeanchamber.com.cn/en/upcoming-events/27731/Business_Reception_Celebrating_50_Years_of_EU_China_Ties_50_
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 11th June 2025.
(MUSIC)
RUI: According to a statement shared by the Ministry of Commerce on 6th June, China’s services trade grew rapidly in the first four months of 2025, with China’s trade deficit declining substantially compared to the same period last year.
MARIANN: While exports still made up less than half of the country’s services trade, their total value increased more than 14 per cent year-on-year. The total value of services that China imported in the January-April period also rose, but much more modestly at nearly 4 per cent. This resulted in China’s overall services trade deficit decreasing by almost 19 per cent year-on-year. Travel services exports saw the fastest growth among all services segments, increasing by almost 80 per cent year-on-year.
(MUSIC)
RUI: Data released by China’s customs authorities on 9th June showed that the country’s export growth slowed further in May from the past two months, while the fall in its imports accelerated.
MARIANN: The total value of China’s exports in US dollar terms increased 4.8 per cent year-on-year in May, with the pace of growth dropping sharply from the 8.1 per cent recorded in April. A key factor behind the slowdown was a significant drop in China’s exports to the US over the past two months. Compared to March, when China’s exports surged 12.4 per cent as many exporters rushed to get their shipments out before US President Donald Trump’s promised announcement of tariffs in April, China’s total exports to the US decreased 28 per cent by May. This fall was partially offset by a rise in exports to other markets. China’s exports to the EU increased 15 per cent during the same period.
The total value of imports dropped 3.4 per cent year-on-year, with the pace of decrease accelerating from the previous month. Here, again, the decrease in imports from the US was a contributing factor, falling 13 per cent from March to May. However, the decline was not unique to US imports, as even China’s imports from members of the Association of Southeast Asian Nations decreased 11 per cent during the same period amid weak domestic demand.
(MUSIC)
RUI: Data published by the statistics bureau on 9th June revealed that deflationary pressures in China intensified in May, as producer prices entered their 32nd consecutive month of decline and consumer prices also dropped for the fourth month in a row.
MARIANN: Producer prices fell 3.3 per cent year-on-year, which was the sharpest decrease recorded since July 2023. The statistics bureau attributed this primarily to a significant decline in the prices of production materials. Consumer price deflation remained minimal at 0.1 per cent year-on-year. However, the reading came on top of an already low base from last year and marked the fourth consecutive month of decline. A key factor behind this was a drop in food prices and consumer goods prices, which was offset somewhat by an increase in prices for services.
(MUSIC)
RUI: On 7th June, China’s Ministry of Commerce issued a statement on its website, answering questions from media about the meeting that took place on 3rd June between Minister of Commerce Wang Wentao and European Commissioner for Trade Maroš Šefčovič in Paris.
MARIANN: Topics discussed during the meeting included the ongoing negotiations of electric vehicle price commitments, China’s anti-dumping probe into EU brandy and its export controls on rare earth minerals. The statement highlighted that China plans to issue a final announcement about the brandy probe by 5th July. Regarding export controls, the Ministry said it attaches great importance to the concerns raised by the European side and is willing to establish a green channel for eligible applications to speed up the approval process. The Chamber has been in regular contact with the Chinese authorities on this issue, and will continue to monitor the situation and make constructive recommendations based on industry realities.
(MUSIC)
RUI: This year marks the 50th anniversary of the establishment of diplomatic relations between the European Union and China. It is a milestone that highlights the long-standing and evolving partnership between these two major global players. The 50th anniversary is a testament to the enduring and fruitful cooperation that has been built over the years.
MARIANN: Over the past five decades, EU-China relations have grown and diversified significantly. The partnership has evolved from a primarily trade-focused relationship to one that encompasses a wide range of areas, including technology, environmental protection and cultural exchanges. As European businesses eye opportunities in China and Chinese businesses accelerate their expansion into the European market, the need for strong and effective collaboration is paramount.
RUI: Join us for a special Business Reception on 17th June in Beijing celebrating this significant milestone in EU-China collaboration. This event is an effective platform for facilitating communication and cooperation between multinational enterprises. Don’t miss this exceptional opportunity to connect, learn and chart your path to success with industry leaders, entrepreneurs and business partners, old and new, in a relaxed and elegant atmosphere.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode includes segments on:
- EU member states restrict Chinese medical devices firms’ access to EU public procurement;
- China official May PMI; and
- Caixin China General Manufacturing PMI in May.
The Chamber’s full report of the US-China Trade War survey findings is now available to download for free from the Chamber’s website.
Listeners are also invited to attend the event Navigating Data Governance in the AI Era – Compliance Challenges Across China and the EU on 16th June. The event will take place in Beijing and attendees can also watch online.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
EU member states restrict Chinese medical devices firms’ access to EU public procurement
Statement on the European Commission’s Decision to Restrict Chinese Firms’ Access to EU Procurement Contracts Under the International Procurement Instrument (IPI)
China official May PMI (NBS)
https://www.stats.gov.cn/sj/zxfb/202505/t20250531_1959985.html
Caixin China General Manufacturing PMI, May
https://www.pmi.spglobal.com/Public/Home/PressRelease/56042e5fa0a541ff9d2504a398bf6e53
European Chamber Report: Flash Survey on the US-China Trade War
European Chamber event: Navigating Data Governance in AI Era: Compliance Challenges Across China and the EU
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 4th June 2025.
(MUSIC)
RUI: On 2nd June, European Union Member States voted to restrict Chinese medical device manufacturers’ access to the EU’s procurement market. The move constitutes the first use of the EU’s International Procurement Instrument or IPI. It follows an investigation launched last April, which concluded that foreign products only have minimal access to Chinese government procurement for healthcare equipment.
MARIANN: Chinese medical devices providers will now be blocked from bidding on relevant EU public procurement tenders with a value over EUR 5 million for a period of five years.
A lack of fair access to government procurement in China has been a longstanding issue for European companies operating in the country. It has been a key advocacy topic for the European Chamber’s Healthcare Equipment Working Group since the launch of the China Manufacturing 2025 initiative in 2015, which included market share targets for domestic high-end medical devices. In the European Chamber’s Business Confidence Survey 2025, 100 per cent of respondents in the medical devices sector reported missing business opportunities in China in 2024 due to market access and regulatory barriers, with ‘discrimination against foreign-invested enterprises in public procurement’ the top regulatory obstacle faced.
While caution should be exercised in the potential application of trade defence tools, the European Chamber supports the end goal of this action, which is to ensure that European companies have the same access to China’s procurement market as Chinese companies enjoy in Europe.
(MUSIC)
RUI: Data released by the statistics bureau on 31st May showed that manufacturing activity in China continued to decline for the second month in a row in May, as demand continued to contract.
MARIANN: The official manufacturing purchasing managers’ index or PMI stood at 49.5 points. This was the second month that the reading stayed below 50 points, indicating a contraction. That said, the pace of decline slowed compared to April, with most subindices improving from the previous month. However, while an improvement in supply meant that production edged back up to expansion territory, demand still missed the mark, with both new export and import orders contracting in May.
The official non-manufacturing PMI, which gauges services and construction activity stood at 50.3 points, with the pace of expansion dropping for the third consecutive month in May. This was largely due to a sharp slowdown in construction activity growth, due to weak demand.
(MUSIC)
RUI: Findings of a private survey released on 3rd June suggest that operating conditions in China’s manufacturing sector deteriorated in May, with both output and new orders falling.
MARIANN: The Caixin China General Manufacturing PMI stood at 48.3 points in May, down from 50.4 points recorded in the previous month. This marked the first time in eight months that the Caixin headline index fell below the 50-point benchmark, with the reading dropping to the lowest level since September 2022. A key factor behind the decline was a sharp fall in new orders, with export orders contracting for the second consecutive month. Despite this, expectations for the year ahead among surveyed manufacturers improved in May, with firms expressing hopes that the widening of export markets will contribute to an increase in sales.
Commenting on the data, Wang Zhe, senior economist at Caixin Insight Group warned that the downward pressure on the Chinese economy had significantly intensified at the start of the second quarter. He attributed this to the increased uncertainty in the external trade environment combined with headwinds in the domestic economy.
(MUSIC)
RUI: Following the escalation of tariffs and trade measures between the United States and China in April, the European Chamber conducted an online flash survey between 17th and 27th April 2025 to understand how its members have been affected. Shortly after, on 12th May, the US and China announced their decision to reduce tariffs on each other’s goods in a joint statement, with both sides cutting tariffs on each other’s goods by 115 percentage points for a 90-day period.
MARIANN: While the Chamber was encouraged by the decision, uncertainty remains, partly because certain tariffs have only been suspended temporarily and partly due to the erratic nature in which the tariffs were implemented in the first place. Therefore, while the survey results may no longer reflect the current picture that the initial round of tariff announcements had on Chamber members, they are still indicative of the influence that the US-China trade relationship has on overall business confidence. They also serve as an indicator of what a future deterioration in the US-China relationship might mean for foreign businesses operating in China, for example, if trade talks do not lead to an agreement following the 90-day tariff suspension.
RUI: The full report of the survey findings is now available to download for free from the Chamber’s website.
(MUSIC)
RUI: As the global digital transformation accelerates and the use of artificial intelligence proliferates, cross-border data transfers are becoming even more critical for European companies operating in China. However, compliance challenges are increasing in complexity, as both China and the EU have introduced their own regulatory frameworks for cross-border data flows.
MARIANN: The regulatory disparities between the EU and China necessitate significant investments from European enterprises to harmonise their data management practices. This includes finding ways to comply with the requirements of both jurisdictions regarding AI data localisation and cross-border data transfers.
RUI: Join us on 12th June online or in person in Beijing to hear legal experts from Europe share updates on key topics, including recent GDPR enforcement cases related to cross-border data transfers to China. In addition, drawing on real life experience and industry best practices, specialists from leading consulting firms will offer practical insights into building effective cross-border data compliance strategies.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- January–April total use of FDI;
- Guidelines on increasing financing support for small and micro enterprises;
- EU anti-dumping investigation into tyres from China; and
- January–April industrial profits.
The Chamber released its annual Business Confidence Survey 2025, which you can download here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Guidelines on increasing financing support for small and micro enterprises
https://www.nfra.gov.cn/cn/view/pages/governmentDetail.html?docId=1210257&itemId=878&generaltype=1
China total use of FDI, Jan-Apr 2025 (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_1da74ad7af834d71bf76c180da419071.html
EU anti-dumping investigation into tyres from China
https://policy.trade.ec.europa.eu/news/eu-investigates-allegations-dumping-tyres-china-2025-05-21_en
China January-April industrial profits (NBS)
https://www.stats.gov.cn/sj/zxfb/202505/t20250527_1959963.html
European Chamber report: Business Confidence Survey 2025
https://www.europeanchamber.com.cn/en/publications-business-confidence-survey
Business Confidence Survey 2025 Launch & Insights from Made in China 2025: How are European Businesses Adapting to A Changing Business Environment?
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 28th May 2025.
(MUSIC)
RUI: Data released by the Ministry of Commerce on 23rd May showed that the actual use of foreign direct investment or FDI in China shrank 10.9 per cent year-on-year in the first four months of 2025.
MARIANN: The pace of decline accelerated only slightly from the first quarter, and was still the second slowest recorded since the end of 2023. However, it is important to note that this relatively moderate dip came on top of a sharp fall in the actual use of FDI in the first four months of last year. Therefore, the total use of FDI in the January-April period was at the lowest level of the past five years, at 321 billion yuan. Almost three quarters of it was utilised in services and the rest in manufacturing.
(MUSIC)
RUI: On 21st May, eight Chinese government entities, including the National Financial Regulatory Administration, the National Development and Reform Commission, the Ministry of Industry and Information Technology and the central bank, jointly issued a new guideline aimed at advancing financial support for small and micro enterprises.
MARIANN: The document contains 23 measures, with the implementation of each to be led by specific departments. Some of the key points listed include the increased allocation of various loan categories, such as first loans, credit loans and medium- and long-term loans, as well as support for small and micro enterprises to carry out equity financing. The guidelines also call for the reduction of financing costs for small and micro firms, including through the management of loan interest rate pricing and the optimisation of loan surcharges. The document lists some key areas for increased support, including foreign trade, private enterprises, science and technology, and consumption.
(MUSIC)
RUI: On 21st May, the European Commission announced the launch of an anti-dumping probe into tyres for passenger cars and light lorries imported from China. The launch of the investigation followed a complaint received from the EU tyre industry that claimed that the dumping of Chinese imports in the EU market causes harm to local tyre producers.
MARIANN: The investigation is planned to be concluded within 14 months, but provisional anti-dumping measures may be imposed within eight months if deemed necessary. The EU has been consistently raising concerns over the imbalance in its trade relationship with China, and made it clear that it would take steps to protect the interests of its market and the competitiveness of its companies. Such concerns have only been amplified by the recent escalation of trade tensions between the US and China, which prompted Chinese exporters to find alternative markets for their products – with the EU seen as an alluring option. To avoid trade frictions, the European Chamber is advocating for the EU and China to promptly address related issues and at the same time, strengthen cooperation in areas where it is beneficial for both sides.
(MUSIC)
RUI: According to data published by the National Bureau of Statistics on 27th May, in the first four months of 2025, profits at larger industrial firms in China increased at the fastest pace since last July.
MARIANN: Industrial profits accumulated during the January-April period rose 1.4 per cent year-on-year. The pace of increase accelerated significantly from the 0.8 per cent recorded in the first quarter, suggesting a surge in profits in April. This largely correlates with industrial production data that showed an increase in output peak in March and stay at a relatively high level in April too.
(MUSIC)
RUI: On 28th May, the European Chamber launched its European Business in China Business Confidence Survey 2025 – the 22nd iteration of its annual survey.
MARIANN: The survey finds that faced with a mixture of challenges—including persistent regulatory and market access barriers, heightened geopolitical tensions, price deflation, low domestic consumption and narrowing margins—Chamber members’ optimism over the near- and medium-term outlook now sits at a record low level. Many firms are continuing to re-evaluate their engagement with the Chinese market, with large numbers cutting costs, toning down expansion plans, shifting investments to other regions and taking steps to silo their China and rest of the world supply chains.
RUI: The full report is now available to download for free from the Chamber’s website. If you are based in Shanghai, and would like to hear more about the experiences of the Chamber’s members, you can also join the local launch of the Business Confidence Survey 2025 on 5th June at our Shanghai office.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China April official macroeconomic indicators
- Action plan to advance China’s digitalisation
- Anti-dumping duties on imported polyoxymethylene copolymer
- Yicai report on household savings
Listeners are invited to attend the European Chamber’s annual Business Confidence Survey online launch on 28th May.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China April official macroeconomic indicators
https://www.stats.gov.cn/sj/zxfb/202505/t20250519_1959862.html
https://www.stats.gov.cn/sj/zxfb/202505/t20250519_1959858.html
Action plan to advance China’s digitalisation
https://english.www.gov.cn/news/202505/17/content_WS6827c405c6d0868f4e8f29cc.html
《数字中国建设2025年行动方案》近日印发-国家数据局
Anti-dumping duties on imported polyoxymethylene copolymer
https://trb.mofcom.gov.cn/myjjdc/art/2025/art_72d8c893010746cab862526dc1e7bbbe.html
Yicai report on household savings
https://www.yicai.com/news/102616586.html
European Chamber event: Business Confidence Survey 2025 national launch
https://www.europeanchamber.com.cn/en/upcoming-events/27724/_Hybrid_European_Business_in_China_Business_Confidence_Survey_Launch_2025
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 21st May 2025.
(MUSIC)
RUI: Data released by the statistics bureau on 19th May indicate that in April, China’s economy showed resilience in the face of sweeping US tariffs, with key macroeconomic indicators maintaining growth.
MARIANN: Production at larger industrial firms increased 6.1 per cent year-on-year. Although this meant a slowdown in growth from the previous month, when the reading peaked at 7.7 per cent, it was still faster than the median forecast of 5.7 per cent. Out of the 41 main industrial sectors gauged by the headline figure, 36 maintained growth in April. High levels of production growth were recorded in several key manufacturing industries, including automotive—at 9.2 per cent—and rail, shipping, aviation and other logistics equipment manufacturing at 17.6 per cent.
Retail sales increased 5.1 per cent year-on-year. This was below expectations, but it was still the second fastest pace recorded since February 2024.
(MUSIC)
RUI: In a statement issued on 16th May, the National Data Administration announced a new action plan aimed at promoting digitalisation in key areas.
MARIANN: The 2025 Action Plan for the Construction of a Digital China consists of eight key points focussing on areas such as technological innovation, local brand development, applications of artificial intelligence and the cultivation of digital talent. The plan also calls for accelerating international cooperation in the digital field and sets targets for the year, including that the added value of the digital economy should account for over 10 per cent of the country’s gross domestic product. Data from the Ministry of Industry and Information Technology indicates that the total revenue of China’s digital industry reached 8.5 trillion yuan in the first quarter of 2025, increasing 9.4 per cent compared to the same period last year.
(MUSIC)
RUI: On 18th May, the Ministry of Commerce issued a statement announcing that it would impose anti-dumping duties on a specific engineering plastic imported from the European Union, the United States, Taiwan and Japan.
MARIANN: The decision was the conclusion of a year-long investigation into a type of imported copolymer. This copolymer is used as a replacement for various metals in a wide range of products, including automotive components, healthcare equipment and industrial machinery. The ruling set anti-dumping duties ranging from 3.8 to 74.9 per cent – with imports originating from the United States receiving the highest level of tariffs. For the next five years, starting from 19th May, importers have to pay duties of 34.5 per cent for affected goods originating from the European Union.
(MUSIC)
RUI: In an article published on 15th May, the Chinese economic paper Yicai reported that household savings in China surpassed 160 trillion yuan in the first quarter of 2025, after an increase of nearly 100 trillion yuan in the past eight years.
MARIANN: According to data from the central bank’s April 2025 Financial Statistics Report, and calculations by Yicai, the share of household deposits in renminbi was 50.9 per cent in the first quarter of 2025. However, the paper found that while the proportion and scale of household deposits have been increasing over the past two years, their growth rate has been gradually falling from a high of 17.4 per cent in 2022 to 10.3 per cent in the first quarter of this year. The article suggested that this trend might continue as domestic consumption is expected to increase. It cited the central bank’s survey of urban depositors from the fourth quarter of 2024, which found that while over 60 per cent of urban residents still preferred to have more savings, their proportion decreased from the previous quarter. Meanwhile, the rate of those reporting a preference for more consumption rose slightly, coming close to a quarter of all survey respondents.
(MUSIC)
RUI: After China ended its zero-COVID policy in late 2022, Chinese officials began issuing a series of policy plans geared towards improving the country’s business environment and economic fundamentals. However, two years on, this has not yet resulted in an uptick in business confidence.
MARIANN: Faced with a mixture challenges—including persistent regulatory and market access barriers, heightened geopolitical tensions, price deflation, low domestic consumption and narrowing margins—Chamber members’ optimism over the near- and medium-term outlook now sits at a record low level. Many firms are continuing to re-evaluate their engagement with the Chinese market, with large numbers cutting costs, toning down expansion plans, shifting investments to other regions and taking steps to silo their China and rest of the world supply chains.
RUI: Join us on the 28th May online or in person in Beijing to hear Chamber president Jens Eskelund present the key findings of this year’s Business Confidence Survey. Following the president’s presentation, representatives from the Chamber’s six chapters will each provide an overview of business confidence among European companies in their respective localities.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China April foreign trade data;
- US-China joint decision to reduce mutual tariffs; and
- China April Price Indices.
Listeners are also invited to join a hybrid event China’s Healthcare Sector – What Role for European SMEs? on 19th May.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
US-China joint decision to reduce mutual tariffs
https://www.news.cn/world/20250512/38cf894078aa487a9a510ef8f087f590/c.html
China April foreign trade data (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6502846/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6502928/index.html
China April Price Indices (NBS)
https://www.stats.gov.cn/sj/zxfb/202505/t20250510_1959770.html
https://www.stats.gov.cn/sj/zxfb/202505/t20250510_1959771.html
European Chamber event: China’s Healthcare Sector – What Role for European SMEs?
https://www.europeanchamber.com.cn/en/upcoming-events/27632/_Hybrid_China_s_Healthcare_Sector_What_Role_for_European_SMEs_
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 14th May 2025.
(MUSIC)
RUI: China’s export growth slowed in April, but its pace still significantly exceeded expectations of analysts who projected only minimal growth following the United States imposing steep tariffs on goods imported from China.
MARIANN: According to data released by China’s customs authority on 9th May, in US dollar terms the total value of the country’s exports rose 8.1 per cent year-on-year in April. The reading showed a slight dent in export growth after March, when China’s outbound trade increased 12.4 per cent. However, it was far above the median forecast of 1.9 per cent growth. Imports continued to decline in April, but only marginally at 0.2 per cent year-on-year, which was the mildest drop of the past three months. As a result, China’s foreign trade surplus was the lowest level recorded since last October, totalling at 96 billion dollars.
The European Union was China’s largest trading partner among single market entities both in April and in the first four months of the year. In the January-April period, China’s total exports to the EU grew 4.9 per cent year-on-year, while its imports from the bloc dropped 9.2 per cent, adding further to concerns over the EU-China trade imbalance. Despite the mutual tariffs and other trade barriers, the United States remained China’s second largest single market trade partner, albeit its exports to the US dropped 2.5 per cent and its imports from the US decreased 4.7 per cent year-on-year in the first four months of 2025.
(MUSIC)
RUI: On 12th May, the United States and China announced their decision to reduce tariffs on each other’s goods after trade talks held in Geneva, Switzerland during the days prior.
MARIANN: In a joint statement, the two sides said that starting from 14th May, they would remove 91 per cent of the tariffs mutually imposed in April. A further 24 per cent of tariffs will be suspended for 90 days. These moves will bring US tariff rates on Chinese goods to 30 per cent, while US imports to China will be subject to 10 per cent tariffs.
The European Chamber is encouraged by the decision, but uncertainty remains. This is partly because certain tariffs have only been suspended temporarily, and partly because of the erratic nature in which these tariffs were implemented in the first place. Businesses need predictability to maintain normal operations and make investment decisions. The Chamber therefore hopes to see both sides continue to engage in dialogue to resolve differences, and avoid taking measures that will disrupt global trade and result in collateral damage for those caught in the cross-fire.
(MUSIC)
RUI: In April, China’s producer prices entered into their 31st consecutive month of decline, while consumer prices dropped for the third month in a row, due to pressures stemming from persistent weak domestic demand and the escalation in trade tensions.
MARIANN: Data from the statistics bureau published on 10th May showed that producer prices fell 2.7 per cent compared to a year ago. This was the steepest decline recorded in the past half year. Concerns over deflation only increased further as consumer prices also continued to dip in April, although the year-on-year rate of decline was minimal at 0.1 per cent and unchanged from the previous month.
(MUSIC)
RUI: China’s healthcare industry is one of the fastest-growing, with some estimates placing its value at 8 trillion RMB and consistent double-digit growth over the past years. A key driver of this growth is China’s rapidly aging population—in tandem with a growing, increasingly affluent middle class—which has created surging demand for healthcare services, pharmaceuticals and medical innovations.
To meet these needs, the Chinese government launched its ‘Healthy China 2030’ strategy in 2016, which focuses on improving public health, enhancing service capacity, expanding the health industry and strengthening the service system.
MARIANN: This presents a wealth of opportunities for European companies, many of which have experience dealing with similar healthcare-related issues in their home markets, making them well-positioned to offer innovative and adaptable solutions in China. However, they also face challenges such as complex regulations and intense local competition.
RUI: Join us on 19th May online or in person in Shanghai to find out more about the opportunities and challenges that China’s booming healthcare sector presents to European SMEs.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China lifts sanctions on members and a subcommittee of the European Parliament
- Caixin China Manufacturing and Services PMI in April
- Rhodium report: Was Made in China 2025 Successful?
The March/April 2025 edition of the Chamber’s bimonthly magazine, EURObiz, is available to download from the Chamber’s website.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China lifts sanctions on members and a subcommittee of the European Parliament
https://www.europarl.europa.eu/news/en/press-room/20250430IPR28167/china-lifts-sanctions-against-meps
https://www.fmprc.gov.cn/eng/xw/fyrbt/lxjzh/202505/t20250506_11616191.html
https://english.www.gov.cn/news/202505/06/content_WS6819f305c6d0868f4e8f24b6.html
Caixin China Manufacturing and Services PMI, April
https://www.pmi.spglobal.com/Public/Home/PressRelease/d939158f5bb0474bbba845b82baed01c
https://www.pmi.spglobal.com/Public/Home/PressRelease/c0aa2c1df0f04c25936e520967ad2e5d
Rhodium report: Was Made in China 2025 Successful?
https://rhg.com/research/was-made-in-china-2025-successful/EURObiz magazine March/April 2025
https://www.europeanchamber.com.cn/en/eurobiz-magazine
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 7th May 2025.
(MUSIC)
RUI: China has lifted its sanctions on members of the European Parliament and the Parliament’s Subcommittee on Human Rights.
MARIANN: In a press release issued on 30th April, the European Parliament called the move “a step in restoring parliamentary dialogue with China.” The sanctions were originally imposed in March 2021 by China in response to the EU’s sanctions placed on four Chinese officials and one entity related to human rights allegations in Xinjiang. Since the introduction of these sanctions, the EU-China Comprehensive Agreement on Investment, which had reached a political agreement at the end of 2020, has been formally frozen in the European Parliament. At a regular press conference of China’s Ministry of Foreign Affairs, ministry spokesperson Lin Jian commented that the decision to lift restrictions on parliamentary exchanges was agreed between the two sides.
On 6th May, the two sides exchanged congratulations over the 50th anniversary of diplomatic ties between the European Union and China. In his message to European Commission President Ursula von der Leyen and European Council President Antonio Costa, Chinese President Xi Jinping highlighted the comprehensive strategic partnership between the EU and China and noted the two markets’ important role in promoting globalisation and a multipolar world order.
(MUSIC)
RUI: According to private surveys, manufacturing and services expansion in China both slowed in April, after the United States introduced sky-high tariffs on imports from the country.
MARIANN: The Caixin China General Manufacturing Purchasing Managers’ Index or PMI stood at 50.4 points in April, only slightly above the 50-point mark that separates growth from contraction. It was in sharp contrast to the 51.2 points recorded in March, and marked the lowest level since January. The key factor stalling growth was a slower increase in total new orders, with higher US tariffs contributing to a drop in new export orders. Weaker demand also dampened manufacturing output, which in turn led to a reduction of employment levels. While surveyed companies maintained a positive outlook, the level of business confidence dipped to the third lowest level ever recorded, with firms reporting concerns over trade uncertainty.
Services showed a similar picture, with expansion slowing due to a limited rise in new business. Some surveyed firms reported that they had been negatively impacted by tariff-related disruptions to goods trade in April. Service providers’ outlook also dipped to historical lows, with business confidence slipping to the second-lowest level on record.
(MUSIC)
RUI: On 5th May, the Rhodium Group released a report to evaluate the relative success and impact of the Made in China 2025 initiative, which was aimed at reducing reliance on foreign technology and enhancing domestic innovation.
MARIANN: The Washington-based think tank points out that while the policy disappeared from public discourse in 2018 due to international criticism, its core objectives continued under alternative frameworks. The report finds that financial state support intensified, with tax benefits for innovation increasing by almost 29 per cent annually from 2018 to 2022. Meanwhile, state investment through government guidance funds rose five-fold from 2015 to 2020, while market barriers compelled foreign companies to localise production.
As for the targets set out in the plan, the report concludes that China has reduced import dependencies in sectors like memory chips and medical devices, but still relies on foreign firms in critical areas like biomedicine and advanced semiconductors. Chinese firms gained market share in targeted sectors, achieving global competitiveness in some high-tech areas like EVs and high-speed rail. However, they lag behind in global revenue and cutting-edge technologies in most sectors listed in the initiative, according to the report.
Overall, the report—which is in line with the Chamber’s recently published report on the same topic—finds that despite progress, China’s industrial policies have led to inefficiencies and economic imbalances, marked by stagnating productivity growth and strained relations with its trading partners.
(MUSIC)
RUI: The latest edition of the Chamber’s bimonthly magazine EURObiz is dedicated to the topic of the Made in China 2025 initiative, which is set to conclude this year.
MARIANN: You can download the magazine from the Chamber’s website for free, and read about the successes and failures of this ambitious plan and more.
RUI: Other articles featured in the March/April issue explore the impact of China raising the age limit for retirement and the issue of limiting environmental impact through waste reduction.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- April official manufacturing and non-manufacturing PMI;
- Q1 industrial profits;
- China’s Law on the Promotion of the Private Economy adopted; and
- China to introduce more measures to boost the economy.
Listeners are also invited to join the launch of the preliminary findings of the Chamber’s Flash Survey on the US-China Trade War on 8th May.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China April official manufacturing and non-manufacturing PMI (NBS)
https://www.stats.gov.cn/sj/zxfb/202504/t20250430_1959521.html
China Q1 industrial profits (NBS)
https://www.stats.gov.cn/sj/zxfb/202504/t20250427_1959477.html
China’s Law on the Promotion of the Private Economy adopted
https://www.news.cn/fortune/20250430/638e5f9c81164746ae486114e020871a/c.html
China to introduce more measures to boost the economy
https://english.www.gov.cn/news/202504/28/content_WS680f7b9ac6d0868f4e8f2266.html
Chamber event: Launch of the preliminary findings of the Chamber’s Flash Survey on the US-China Trade War
https://www.europeanchamber.com.cn/en/upcoming-events/27667/_Hybrid_European_Chamber_Flash_Survey_on_the_US_China_Trade_War
Transcript:
XINHE: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 30th April 2025.
(MUSIC)
XINHE: Manufacturing activity in China contracted in April after two consecutive months of expansion, as both supply and demand fell sharply since March.
MARIANN: The official manufacturing purchasing manager’s index or PMI stood at 49 points in April, a decrease of 1.5 points compared to the March reading. The 50-point benchmark separates growth from contraction. The April data was the lowest recorded since December 2023. Subindices for production and new orders both entered contraction territory, and new export and import orders both fell sharply, with both indexes dipping to the lowest levels recorded for a year, as tariff and non-tariff trade barriers between the United States and China took effect. The employment subindex also dropped further below the 50-point benchmark, suggesting that manufacturing firms have been cutting headcount at an accelerated pace.
The non-manufacturing PMI showed a more positive picture, even though expansion slowed somewhat compared to March in both the construction and services sectors. Key factors drawing the headline index downwards were falling new orders, with the subindex for new export business hitting a record low for the past year.
(MUSIC)
XINHE: Profits at larger industrial firms in China rose for the first time since last September in the first quarter, following a surge in manufacturing profits in March.
MARIANN: Industrial profits increased 0.8 per cent year-on-year in the first three months of 2025. A breakdown of the three large industrial sectors of mining, manufacturing and utilities showed that March saw a fast rise in manufacturing profits, surging almost 70 per cent compared to the previous data release, which showed the accumulative profits of the January-February period. The surge in manufacturing profits in March could be in part a result of export frontloading to the US, as many exporters rushed to get their shipments there before tariffs would be announced at the beginning of April.
(MUSIC)
XINHE: On 30th April, the Standing Committee of the National People’s Congress passed the private sector promotion law, which will take effect on 20th May.
MARIANN: The draft law was published for public feedback by the Ministry of Justice and the National Development and Reform Commission in October. The final text of the law is yet to be published, but according to state media, it contains 78 articles aimed at providing equal treatment and protection for private businesses.
(MUSIC)
XINHE: At a press conference held on 28th April by several Chinese ministries, senior officials said that China would introduce more measures to bolster economic growth, stabilise employment and meet its 2025 development goals.
MARIANN: According to the officials, upcoming policies will include support for consumption and the real estate sector. Additional measures will focus on five key areas: employment support, foreign trade stability, consumption promotion, effective investment expansion, and fostering a conducive development environment. These include encouraging businesses to maintain staffing levels, assisting export enterprises, boosting service consumption, stimulating automotive sales, boosting private investment, and stabilising capital markets. The People’s Bank of China pledged timely cuts in reserve requirement ratios and interest rates, and the creation of new monetary policy instruments to ensure ample liquidity. Officials expressed confidence in handling external challenges and achieving this year’s economic and social development goals, with ample policy reserves and sufficient policy room.
(MUSIC)
XINHE: The recent escalation of tariffs and trade measures between the US and China has far-reaching implications for all foreign companies operating in China. To better understand the impact and refine our advocacy efforts, the European Chamber conducted an online flash survey among its members from 17th to 27th April 2025.
MARIANN: The findings of the survey indicate that while the majority of the Chamber’s members have not yet been materially impacted by the trade war, the situation has increased uncertainty, and ignited fears over secondary impacts through their customers.
XINHE: Join us on 8th May, when Chamber President Jens Eskelund will introduce the survey’s preliminary findings, providing an overview of the trade war’s impact on the business environment and the near term outlook.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s actual use of foreign direct investment in the first quarter;
- Guideline for improving cross-border flow of financial data;
- Work plan to accelerate services opening up; and
- Latest developments regarding China’s efforts at opening its healthcare sector to foreign participation
The Chamber is conducting an anonymous survey among members on the US-China trade war. Please fill in the survey before 27th April to influence our advocacy strategy.
Correction: the actual use of FDI in March soared 13.2 per cent compared to last year.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China Q1 actual use of FDI (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_1f35955d2f4a4eb28837fe6d262693ea.html
Guideline for improving cross-border flow of financial data
https://english.www.gov.cn/news/202504/18/content_WS6801a02ac6d0868f4e8f1d86.html
Work plan to accelerate services opening up
https://english.www.gov.cn/policies/policywatch/202504/22/content_WS6806d37dc6d0868f4e8f1f16.html
https://wzs.mofcom.gov.cn/zcfb/art/2025/art_869de097dd4640d3bb5e44338bc534b0.html
Latest developments regarding China’s efforts at opening up its healthcare sector to foreign participation
https://english.news.cn/20250421/96229be7b1d14e91adac8fed87cb026f/c.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 23rd April 2025.
(MUSIC)
RUI: In March, the actual use of foreign direct investment or FDI in China increased year-on-year, which softened the overall fall in FDI utilisation registered in the first quarter.
MARIANN: Data released by the Ministry of Commerce on 18th April showed that the actual use of FDI in March soared 13.9 (Correction: 13.2) per cent compared to last year. This helped offset the ongoing overall fall in the first quarter, which stood at 10.8 per cent year-on-year. This was the mildest rate of year-to-date decline recorded since December 2023. FDI used in the services sector in the first quarter was more than double what was utilised in manufacturing. The Ministry’s statement also specified that the amount of utilised FDI from the European Union rose almost 12 per cent year-on-year, however, no figures were provided for this.
(MUSIC)
RUI: On 17th April, the People’s Bank of China, the National Financial Regulatory Administration and four other departments jointly issued a guideline aimed at improving the cross-border flow of financial data.
MARIANN: The guideline specifies the conditions for cross-border data transfers as well as a list of data items permitted for export. It also lists outbound data transfer scenarios exempt from security assessments and over 60 categories of common financial business scenarios. The European Chamber has been advocating for the facilitation of intra-group data access in the financial industry, and has been urging the Chinese authorities to ensure that data management requirements are clear and allow cross-border intra-group data flows.
(MUSIC)
RUI: On 18th April, the Ministry of Commerce issued a work plan aimed at accelerating the opening up of the services sector. The plan includes 155 pilot tasks in key areas including e-commerce, healthcare, financial services and tourism.
MARIANN: Some of the pilot tasks outlined include attracting foreign financial services companies to provide services for green projects and promoting the development of international factoring services. In pilot zones, foreign-invested travel agencies will be allowed to offer outbound travel services, and the caps on foreign ownership for app stores will be removed. The work plan also expands the list of pilot zones from the previous 11 provinces and cities by adding nine additional cities, including Ningbo and Xiamen.
(MUSIC)
RUI: At a press conference held on 21st April, the National Health Commission said that China now has more than 150 joint venture and wholly foreign-invested medical institutions.
MARIANN: The Commission pointed to the figure to underline the progress made in opening up the healthcare sector. A key development in this regard was that a pilot work plan released last November granted approval to eight cities and one province to allow the establishment of wholly foreign-owned hospitals. A key challenge is the size of the required investment, as the pilot work plan focusses on class-three hospitals only, which have a capacity of 500 beds. Therefore, the most likely beneficiaries of this plan are foreign parties in joint ventures that could now buy out their JV partner and turn an existing hospital into a wholly foreign-owned entity.
Additionally, the Ministry of Commerce’s 18th April work plan included a call for further opening of the healthcare sector to foreign participation. Some of the pilot tasks specified were supporting foreign doctors in opening clinics in China and promoting the establishment of foreign-funded nursing schools.
(MUSIC)
RUI: The recent escalation of tariffs and trade measure between the US and China has far-reaching implications for all foreign companies operating in China. To better understand the impact and refine the Chamber’s advocacy efforts, we have launched an anonymous flash survey among our members.
MARIANN: Invitations have been sent out via email to primary contacts of all European Chamber member companies. Your invaluable insights are crucial in helping us accurately gauge the situation and best serve your interests.
RUI: The survey period is now extended to 27th April. Do not miss this chance to influence our advocacy strategy. Let’s work together to navigate these complex trade dynamics.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- GDP growth in the first quarter and macroeconomic indicators in March;
- Foreign trade data in March;
- EU member states adopt proposals to postpone the application of the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive; and
- Price indices in March.
Listeners are also invited to join an exclusive dialogue with Timothy Stratford, Senior Counsel at Covington & Burling LLP, on 18th April. The event will take place in Beijing and attendees can also watch online.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China Q1 GDP and March macroeconomic indicators
https://www.stats.gov.cn/sj/zxfb/202504/t20250416_1959321.html
https://www.stats.gov.cn/sj/zxfb/202504/t20250416_1959320.html
https://www.stats.gov.cn/sj/zxfb/202504/t20250416_1959317.html
EU member states adopt proposals to postpone the application of the CSRD and the CSDDD
https://www.consilium.europa.eu/en/press/press-releases/2025/04/14/simplification-council-gives-final-green-light-on-the-stop-the-clock-mechanism-to-boost-eu-competitiveness-and-provide-legal-certainty-to-businesses/
China foreign trade data, March (GAC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6462438/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6462546/index.html
China Price indices, March (NBS)
https://www.stats.gov.cn/sj/sjjd/202504/t20250410_1959259.html
European Chamber event: Exclusive Dialogue with Timothy P. Startford – US Tariffs and Global Trade
https://www.europeanchamber.com.cn/en/upcoming-events/27538/_Hybrid_Exclusive_Dialogue_with_Timothy_P._Stratford_US_Tariffs_and_Global_Trade_Implications_for_US_EU_China_Relations
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 16th April 2025.
(MUSIC)
RUI: Official data released by the National Bureau of Statistics on 16th April suggested that China’s economic growth maintained some momentum in the first quarter. Many analysts linked this to a final surge in the country’s exports before the US imposing sky-high tariffs on all imports from China. However, other indicators, including retail sales data, also suggest an overall uptick in economic performance.
MARIANN: China’s gross domestic product or GDP increased 5.4 per cent year-on-year in the first quarter. This was equivalent to the growth rate recorded in the last quarter of 2024. Production at larger industrial firms rose 7.7 per cent in March compared to the same period last year. This was the highest rate of growth recorded since July 2021 – almost four years ago. The total value of retail sales also increased sharply at 5.9 per cent year-on-year, setting a new record for the past 13 months. The surveyed urban unemployment rate edged down to 5.2 per cent from the 5.4 per cent recorded in February.
(MUSIC)
RUI: China’s exports surged at the fastest rate in four months in March, while its imports continued to shrink for the second month in a row.
MARIANN: Customs data published on 14th April revealed that in US dollar denominated terms, the total value of China’s exports grew 12.4 per cent year-on-year, while the total value of imports fell 4.3 per cent. According to China’s official breakdown, its largest trade partner in the first three months of the year was the Association of Southeast Asian Nations or ASEAN. However, when it comes to single markets, the European Union tops the list, followed by the United States. Concerningly, the trade imbalance between the EU and China continued to increase, with exports from China to the EU rising 3.7 per cent year-on-year, while imports to China from the bloc dropped 6.3 per cent in the January-March period.
(MUSIC)
RUI: On 14th April, the Council of the EU adopted the Commission’s so-called ‘stop-the-clock’ directive, postponing the application of certain requirements related to corporate sustainability reporting and due diligence.
MARIANN: The proposals were introduced by the Commission as part of the first Omnibus package, released in February. They include postponing the application of the requirements laid out in the Corporate Sustainability Reporting Directive (CSRD) by two years, with the transposition deadline and the first phase of the application of the Corporate Sustainability Due Diligence Directive (CSDDD) being postponed by one year. The directive will come into force one day after its publication in the EU’s Official Journal.
(MUSIC)
RUI: Producer prices in China dropped for the 30th consecutive month in March. With consumer prices also continuing their decrease for the second month in a row, deflationary pressures intensified.
MARIANN: Data released by China’s statistics bureau on 10th April showed that producer prices fell 2.5 per cent year-on-year, which was the sharpest decline recorded since November. The statistics bureau attributed the dip in prices to both seasonal and international market factors. For seasonal factors, it mentioned the decreasing demand for coal as heating in the northern regions of the country was suspended with the coming of spring. As for international factors, it listed the fall in international crude oil prices which led to a drop in prices in related domestic sectors.
Consumer prices fell 0.1 per cent in March compared to a year ago, which was much milder than the 0.7 per cent fall recorded in February.
(MUSIC)
RUI: On 2nd April, US President Donald Trump announced sweeping import tariffs, which has sparked significant disruptions in global trade and prompted strong reactions from multiple governments.
MARIANN: Following China’s announcement of countermeasures, including additional tariffs on US imports, the US side further increased additional levies on imports from China, which led to a quick back and forth escalation between the two sides.
RUI: Join us on 18th April online or in person in Beijing for an exclusive dialogue with Timothy Stratford, Senior Counsel at Covington & Burling LLP. As Chairman Emeritus of the American Chamber of Commerce in China and former Assistant United States Trade Representative, Mr Stratford has been instrumental in shaping US trade policy toward China and Mongolia. He will share his insights on the implications of the recent tariff war for the trilateral relationship between the EU, the US and China.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s measures in response to the US tariffs on imports from China;
- European Commission President Ursula von der Leyen holds phone call with Chinese Premier Li Qiang; and
- China extends anti-dumping probe into EU brandy
Listeners are also invited to attend the launch of the Chamber’s latest report Made in China 2025: The Cost of Technological Leadership on 16th April.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Commission President Ursula von der Leyen holds phone call with Chinese Premier Li Qiang
https://ec.europa.eu/commission/presscorner/detail/en/read_25_1004
https://english.www.gov.cn/news/202504/08/content_WS67f52de2c6d0868f4e8f1818.html
China extends anti-dumping probe into EU brandy
https://trb.mofcom.gov.cn/myjjdc/art/2025/art_bfabd6319b25440b80eee1dff3545df2.html
European Chamber event: Made in China 2025 Report Launch
https://www.europeanchamber.com.cn/en/upcoming-events/27379/_Hybrid_European_Chamber_Report_Launch_Made_in_China_2025
Transcript:
XINHE: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 9th April 2025.
(MUSIC)
XINHE: On 4th April, China announced a series of measures in response to US President Donald Trump’s announcement of the latest round of tariffs on imports from China. The measures include tariffs of equal rate to those originally imposed by the US side, as well as export and import restrictions and investigations. Following China’s announcement of counter tariffs, Trump threatened to slap an additional 50 per cent tariff on all imports from the country if China does not revoke its reciprocal measures.
MARIANN: Starting from 10th April, China will impose a 34 per cent tariff on US imports. Meanwhile, China has also restricted the exports of seven types of rare earths and imposed export controls of dual-use items on 16 US firms. Additionally, it has halted imports of poultry products and sorghum from select US companies; launched an anti-dumping probe into imports of medical CT tubes from the US and India; and instigated an anti-monopoly investigation into the China subsidiary of the US chemical giant DuPont. It also added 11 more US companies to its unreliable entity list and filed a lawsuit with the World Trade Organization over the new US tariffs.
The moves follow President Trump’s announcement on 2nd April of tariffs covering 185 countries and regions, including 34 per cent levies on Chinese and the 20 per cent tariff on EU imports – both of which Trump has claimed are ‘reciprocal’. However, as the Chinese countermeasures were not revoked, on 9th April the US side announced that it would proceed with the imposition of the additional 50 per cent tariffs, raising the overall tariffs on Chinese imports to 104 per cent.
(MUSIC)
XINHE: On 8th April, European Commission President Ursula von der Leyen held a phone call with Chinese Premier Li Qiang to discuss issues relevant to the bilateral relationship.
MARIANN: According to the Commission’s readout of the phone call, the two sides spoke on the recently announced US tariffs. President von der Leyen highlighted the global economy’s need for stability and predictability and stated that the EU and China have a responsibility to support free and fair trade, with China having a critical role in tackling trade diversions in sectors already affected by global overcapacity. In this regard, the two leaders talked about establishing a mechanism for monitoring potential trade diversions to make sure that these can be adequately addressed.
Additionally, President von der Leyen emphasised the need for structural solutions to rebalance trade and boost European access to the Chinese market.
XINHE: According to the readout from the Chinese side, Premier Li highlighted that protectionism is a dead-end as no country can thrive in isolation. He pledged that China will continue to expand its opening-up and strengthen its cooperation with EU member states as well as other markets around the world.
Both leaders noted that this year marks the 50th anniversary of EU-China diplomatic ties.
(MUSIC)
XINHE: On 2nd April, China’s Ministry of Commerce announced that it will extend its anti-dumping probe into EU brandy by another three months.
MARIANN: The investigation was originally launched on 5th January 2024, with provisional findings that were issued in August concluding that EU brandy is being sold in China below market prices. In October, China imposed temporary anti-dumping measures on brandy imported from the EU by setting deposit margins between 30.6 and 39 per cent. For now, importers of EU brandy need to verify that they have the required amount to cover this additional cost if tariffs are to be levied once the investigation concludes. The latest extension marks the second time the end of the probe has been postponed. In a brief statement, the Ministry attributed the decision to extend the timeline of the investigation to the complexity of the case.
(MUSIC)
XINHE: The Made in China 2025 initiative, announced in 2015, was the latest iteration in a long line of Chinese industrial policies that targeted specific sectors for growth. What set it apart were the sectoral market share targets that were laid down, as well as the overarching goal of achieving 70 per cent domestic market share for “core basic components and key basic materials” by 2025.
MARIANN: The European Chamber conducted interviews with its members and gathered data through its annual Business Confidence Survey, as well as through extensive research, to provide a snapshot of China’s progress on the Made in China 2025 targets and explore how the plan has impacted European companies in China over the past 10 years.
XINHE: Join us online or in person in Beijing for the launch of the Chamber’s latest report Made in China 2025: The Cost of Technological Leadership, during which Chamber President Jens Eskelund will introduce the report’s key findings and their relevance to European businesses operating in China.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Manufacturing and services purchasing manager’s index (PMI) in March;
- European Commissioner for Trade and Economic Security Maroš Šefčovič visited Beijing and met with Chamber representatives;
- Chinese president held talks with foreign business CEOs in Beijing; and
- Profits at larger industrial firms in January and February 2025.
Listeners are also invited to join the event ‘Leveraging E-Commerce in China While Protecting Your IP’, taking place on 9th April in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
EU Commissioner Maroš Šefčovič March 2025 official visit in Beijing
https://www.europeanchamber.com.cn/en/lobby-actions/7926/European_Chamber_representatives_meet_with_Commissioner_for_Trade_and_Economic_Security_Maros_Sef_ovi_
The European Commission’s official read-out of the meetings between Commissioner Šefčovič and Chinese officials
https://ec.europa.eu/commission/presscorner/detail/en/read_25_923
Chinese President’s meeting with global business leaders
https://www.pekingnology.com/p/full-text-xis-speech-to-global-ceos
China Official PMI, March (NBS)
https://www.stats.gov.cn/sj/zxfb/202503/t20250331_1959176.html
China Industrial Profits, January-February (NBS
https://www.stats.gov.cn/sj/zxfb/202503/t20250327_1959147.html
European Chamber event: Leveraging E-Commerce in China While Protecting Your IP
https://www.europeanchamber.com.cn/en/upcoming-events/27474/Leveraging_E_Commerce_in_China_while_Protecting_Your_IP
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 2nd April 2025.
(MUSIC)
RUI: Manufacturing and services activity both expanded in China in March, with the growth momentum picking up speed from the previous months.
MARIANN:Data published by the statistics bureau on 31st March showed that the official manufacturing purchasing manager’s index or PMI rose to the highest level recorded in a year, reaching 50.5 points. Readings above 50 points indicate an expansion. A breakdown by company size, however, revealed that it was still only larger manufacturing firms that were able to increase their activity in March, while small-and medium size enterprises continued to report a contraction. Supply and demand both improved, but staffing levels dropped further from the previous month.
The non-manufacturing PMI, which comprises construction and services activity, also rose markedly from February, reaching 50.8 points – a three-month high. This was largely due to a sharp increase in expectations: the 12-month business outlook was the only subindex above the 50-point benchmark. New orders improved but still stayed in contraction territory, while the gauge for sales prices and employment dropped further, due to a sharp fall in construction regarding both metrics.
(MUSIC)
RUI: On 27th March, the European Union’s Commissioner for Trade and Economic Security Maroš Šefčovič arrived in Beijing for a two-day trip – his first official visit to China in this capacity. During his visit, he met high-level representatives of the Chinese government, including Vice Premier He Lifeng, Minister of Commerce Wang Wentao and Minister of Customs Sun Meijun.
MARIANN: On 27th March, European Chamber President Jens Eskelund and a group of Chamber representatives met with Commissioner Šefčovič in Beijing.
At a working lunch, President Eskelund discussed European businesses’ challenges in China, such as market access barriers, supply-demand mismatches, deflationary trends, and China’s growing trade surplus. The Commissioner also met with members of the Chamber’s Advisory Council who presented some of the key issues impacting their respective industries. Commissioner Šefčovič expressed his willingness to foster a more balanced and cooperative trade relationship between the EU and China, with a focus on reciprocity, transparency and mutual benefit.
According to the Commission’s official read-out, Commissioner Šefčovič and Minister Wang agreed to closely follow up on their discussions through regular contact to ensure adequate progress on all discussed files, including the key market access issues. The Commissioner and Minister Sun agreed to set up a working group on agri-food market access.
(MUSIC)
RUI: On 28th March, Chinese President Xi Jinping met with foreign business representatives in Beijing in an attempt to showcase China as an attractive investment destination.
MARIANN: In his address, Xi highlighted the contributions of foreign businesses to China’s economic growth and modernisation, saying that they account for one-third of China’s foreign trade, one-quarter of its industrial value added and one-seventh of its tax revenue, while employing more than 30 million people. He vowed that the country will only open its doors wider to foreign investment including by providing national treatment for foreign businesses and ensuring fair market competition.
(MUSIC)
RUI: According to official data released by the National Bureau of Statistics on 27th March, profits at larger industrial firms operating in China shrank in the first two months of 2025 compared to the same period a year ago.
MARIANN: Industrial profits dropped 0.3 per cent year-on-year, totalling 911 billion yuan in January-February. A breakdown by the three key industrial sectors of mining, manufacturing and utilities showed that the overall fall was due to a sharp decrease in mining companies’ profits. Conversely, manufacturing companies and utility providers were able to grow their profits compared to the same period last year.
(MUSIC)
RUI: E-commerce platforms in China have become a cornerstone of the economy, driving consumption, creating jobs, and fostering innovation. For European SMEs, cross-border e-commerce offers a popular and lucrative avenue to sell their products in the Chinese market. These platforms not only facilitate trade but also provide a digital infrastructure that supports the growth of businesses of all sizes.
MARIANN: However, e-commerce platforms have also emerged as a critical battleground for intellectual property or IP enforcement. While major Chinese platforms have implemented anti-counterfeiting measures, SMEs often struggle to navigate these systems effectively. Protecting IP rights is essential for maintaining the integrity and value of products, and understanding the regulatory landscape and enforcement mechanisms is crucial for SMEs looking to succeed in the Chinese market.
RUI: Join us on the 9th April in Beijing to gain valuable insights from experts on the key trends shaping e-commerce in China, relevant regulatory developments, and tips for IP protection when doing business through e-commerce platforms.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on the:
- China Development Forum 2025;
- State Council’s Opinions on Further Strengthening Trade Policy Compliance Efforts;
- Provisions on the Implementation of the Anti-foreign Sanctions Law; and
- Revised Regulations to Protect Payments to SMEs.
Listeners are also invited to an event on 1st April to hear Professor Da Wei, a renowned international relations expert, discuss United States-China relations and Trump 2.0.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
State Council’s Opinions on Further Strengthening Trade Policy Compliance Efforts
https://www.gov.cn/zhengce/content/202503/content_7014874.htm
Provisions on the Implementation of the Anti-Foreign Sanctions Law
https://www.gov.cn/zhengce/content/202503/content_7015400.htm
Revised Regulations to Protect Payments to SMEs
https://www.gov.cn/zhengce/content/202503/content_7015401.htm
European Chamber event: Exclusive Dialogue Featuring Prof. Da Wei
https://www.europeanchamber.com.cn/en/upcoming-events/27321/_Hybrid_Exclusive_Dialogue_with_Prof._DA_Wei_Chinese_Perspectives_on_Trump_2.0_and_China_US_Relations
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 26th March 2025.
(MUSIC)
RUI: Chinese Premier Li Qiang pledged wider market access to foreign executives gathered at the opening ceremony of the China Development Forum 2025, held in Beijing on 23rd March.
MARIANN: Li said that China will roll out further measures to ease the integration of foreign businesses into the Chinese market, noting their contributions to China’s development. He warned about the risks that protectionism and decoupling pose to globalisation and called on multinational enterprises to maintain their role in upholding the globalised economy. According to state media reports, the two-day event attracted over 80 foreign business executives, some of whom also held exchanges with China’s vice premier He Lifeng.
(MUSIC)
RUI: On 21st March, the State Council issued guidelines on further improving trade policy compliance with World Trade Organization rules.
MARIANN: The document contains six key tasks and two safeguard measures. The first key task listed calls on the relevant authorities to conduct assessments of already formulated trade policies to ensure that they comply with WTO rules and China’s accession commitments. The guidelines state that such a compliance assessment should be a necessary step before the introduction of new trade policies. The document also highlights the need to respond to compliance concerns raised by other WTO members in connection with China’s trade policies. Conversely, it tasks the Ministry of Commerce with raising concerns about measures introduced by other WTO members that China deems non-compliant. The guidelines came into effect upon their public release.
(MUSIC)
RUI: On 23rd March, the State Council issued implementing regulations for China’s anti foreign sanction law, which was passed in June 2021 amid escalating trade tensions with the United States.
MARIANN:The regulation comprises 22 articles that provide further details about some of the points stipulated by the law. For example, the regulations clarify some of the countermeasures that Chinese authorities can take against foreign individuals or organisations that impose discriminatory measures on Chinese nationals or organisations in an attempt to suppress or restrict them. Such countermeasures include the seizure or freezing of various types of property, which the implementing regulations specify as cash bank deposits, fund shares, equity, intellectual property or property rights. It also defines the scope of other necessary measures mentioned in the law as including but not limited to prohibiting or limiting investments in China as well as exports of relevant items, and the exchange of data and personal information.
(MUSIC)
RUI: On 24th March, the State Council published revised regulations to guarantee payments to small and medium-sized enterprises or SMEs, which will go into effect on 1st June.
MARIANN:The new edition is a revision of regulations issued in 2020. It comprises 37 points, including some calling for enhanced supervision and more severe punishments for illegal acts related to non-payment or delayed payment to deter such behaviour. A key detail is that the revised regulations set a payment deadline for institutions and large businesses that purchase goods or services from an SME: they have to pay no later than within 60 days of delivery. Further points include calls for enhancing mechanisms for supervision and settling of complaints to ensure timely payments.
(MUSIC)
RUI: The new Trump administration has garnered significant attention from global markets due to its potential impact on international trade, economic policies, and geopolitical dynamics. As one of the world’s most influential economies, the United States under a Trump presidency could introduce changes that ripple through global financial systems and international relations. Understanding the implications of these changes is crucial for businesses, policymakers, and anyone with a vested interest in the global economy.
MARIANN: As the world’s largest economy and the fastest-growing major economy, respectively, the interactions between the US and China shape not only their bilateral ties but also the trajectory of the global order.
RUI: Join us on 1st April for an exclusive dialogue with Professor Da Wei, a renowned expert in international relations with a research focus on US-China relations. Professor Da will share his perspectives on the most notable aspects of Trump’s second term and on how China’s views on the second Trump administration will shape the country’s strategy and policy considerations.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Action Plan to Boost Consumption;
- Utilisation of foreign direct investment in January and February;
- Macroeconomic indicators in January and February; and
- Statement of the G7 Foreign Ministers’ meeting.
The Chamber launched a new member service The EU China Business Digest.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s Utilisation of FDI, January – February (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_af5ab8295a0a4f9a9561d05232fe23d1.html
China Macroeconomic Indicators, January-February (NBS)
https://www.stats.gov.cn/sj/zxfb/202503/t20250317_1959012.html
https://www.stats.gov.cn/sj/zxfb/202503/t20250317_1959014.html
Action Plan to Boost Consumption
https://english.www.gov.cn/policies/latestreleases/202503/16/content_WS67d6b21bc6d0868f4e8f0da0.html
Statement of the G7 Foreign Ministers’ Meeting in Charlevoix
https://www.state.gov/statement-of-the-g7-foreign-ministers-meeting-in-charlevoix/
New European Chamber member service: The EU-China Business Digest
https://www.europeanchamber.com.cn/en/policy-updates-and-analysis/11301/the_eu_china_business_digest
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 19th March 2025.
(MUSIC)
RUI: The actual use of foreign direct investment or FDI in China dropped significantly in the first two months of 2025 compared to a year ago, according to data released by China’s Ministry of Commerce on 14th March.
MARIANN: The total amount of utilised FDI surpassed 171 billion yuan in the January-February period, which was a 20.4 per cent drop from a year ago. The decrease came on top of a similar fall last year, which makes the comparison especially stark between the current total and that recorded two years ago: in the first two months of 2023, following China’s reopening after its COVID-related lockdowns were lifted, the total use of FDI was 268 billion yuan, over one and a half times more than the total in the same period this year.
(MUSIC)
RUI: Macroeconomic data released by the National Bureau of Statistics on 17th March showed that industrial production and retail sales both increased at a relatively fast pace in the first two months of 2025 compared to a year ago.
MARIANN: Production at larger industrial firms expanded 5.9 per cent year-on-year. Out of the three large industrial segments of mining, manufacturing and utilities, production at manufacturing grew at the fastest rate at 6.9 per cent year-on-year. The total value of retail sales rose 4 per cent compared to the same period last year, slightly above the pace of growth recorded in the last two months of 2024. The increase in catering sales was the highest recorded since June.
(MUSIC)
RUI: On 16th March, Central Committee of the Communist Party of China and the State Council jointly issued an Action Plan for Boosting Consumption, containing eight sections and thirty items.
MARIANN: The plan came only days after the conclusion of this year’s Two Sessions, during which the task of addressing weak domestic demand was made a priority. While the plan maintains significant continuity with previously announced measures, at a press conference held on 17th March, the National Development and Reform Commission highlighted that it breaks with the pattern of focusing only on the supply side and also provides support for the demand side by targeting an increase in household incomes while easing financial burdens on consumers. This is something that the European Chamber has long been advocating for, as supply-side policies have been a contributor to the significant trade imbalances China has accumulated with its key trade partners, including the European Union.
(MUSIC)
RUI: Top diplomats from the Group of 7, or G7, met in Charlevoix Canada on 13th and 14th March to discuss key geopolitical and trade issues. In a statement released after the meeting, they listed several concerns related to China, including some about the country’s trade practices.
MARIANN: With regard to trade, they voiced worries over China’s non-market policies and practices, as these are causing overcapacity and market distortions. G7 members also urged China to avoid implementing export control measures that might result in major supply chain disruptions. They emphasised that their intention is not to harm China or impede its economic growth. On the contrary, the document stressed that a growing China that adheres to international rules and norms would be in the global interest. The statement was signed by the High Representative of the European Union and the foreign ministers of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
(MUSIC)
RUI: On 14th March, the European Chamber launched a new service to its members. The EU-China Business Digest is a weekly update of economic data, policies, key political events and reports that are relevant to European businesses operating in China, with analysis by the European Chamber.
MARIANN: Issues will be released on Fridays, and can be accessed via the Chamber’s website or WeChat account. After the first five issues, which are publicly available, this service will be accessible to Chamber members only.
RUI: We invite you to keep an eye out for new issues on Fridays, and if you are not our member yet, find out how you can become one to keep your access to our services.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Price indices in February;
- Foreign trade data in January and February;
- Secretary General Adam Dunnett joined CGTN’s live coverage of ‘Two Sessions’; and
- Caixin China General Service PMI.
Listeners are also invited to join the event ‘Chat with Joerg Wuttke: What to Expect in Trump 2.0’ online on 17th March.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China February price indices (NBS)
https://www.stats.gov.cn/sj/sjjd/202503/t20250309_1958913.html
China January-February foreign trade data (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6394756/index.html
Caixin China General Services PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/db9367f740f2481ab5928dbecca2474a
Chamber event: Chat with Joerg Wuttke—What to Expect in Trump 2.0
https://www.europeanchamber.com.cn/en/upcoming-events/27185/_Hybrid_Chat_with_Joerg_Wuttke_What_to_Expect_in_Trump_2.0
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 12th March 2025.
(MUSIC)
RUI: Deflationary pressures in China intensified, with consumer prices falling year-on-year in February, on top of producer prices entering their 29th consecutive month of decline.
MARIANN: According to official data published by the National Bureau of Statistics on 9th March, producer prices dropped 2.2 per cent compared to a year ago. While still significant, the rate of decline was the lowest recorded since August last year. Consumer prices decreased 0.7 per cent year on year, and for the first time since January 2024. The statistics office highlighted that the Chinese New Year holiday had a negative impact on both indices. Producer prices fell as the holiday period—including the weeks before and after the holiday—is an off-season for industrial production. As for consumer prices, the moving date of the holiday resulted in a higher base figure from last year, dragging the index below zero. According to the bureau’s calculations, if seasonal distortions are discounted, the index actually edged up 0.1 per cent year-on-year.
(MUSIC)
RUI: China’s export growth slowed considerably in the first two months of the year, as the first round of additional US tariffs on China’s exports took effect.
MARIANN: Data released by China’s customs authority on 7th March showed that in US dollar terms the total value of the country’s exports rose 2.3 per cent year-on-year in the January-February period. This was the slowest pace of growth since last April. It followed a surge in exports in December, when Chinese exporters were frontloading shipments to the US to avoid higher tariff rates. The total value of imports, meanwhile, fell 8.4 per cent year-on-year, which was the sharpest decline recorded since July 2023. As a result, China’s total trade surplus reached 170 billion US dollars in the first two months of the year. The European Union was China’s second largest trade partner after the Association of Southeast Asian Nations. While China’s exports to the EU increased slightly in the January-February period, its imports from the bloc dropped considerably compared to a year ago.
(MUSIC)
RUI: China’s top annual political event, the ‘Two Sessions’ concluded on 11th March, with the National People’s Congress approving all documents submitted for review at its closing meeting.
MARIANN: The European Chamber’s Secretary General, Adam Dunnett joined CGTN’s live coverage of the closing event, commenting on the significance of the decisions made at this year’s Two Sessions for foreign-invested enterprises operating in China.
ADAM: We watch it very closely and we look forward to contributing to the goals ahead. European companies are looking at opportunities here, but first and foremost, they need to see a market opportunity. The 5% growth that you just talked about we experienced last year. That gives you a good indication of how the economy is growing at a very high-level macro sense. But for individual companies and sectors, what they care about is profitability in their sector. And this other buzzword that we’ve been talking about ‘evolution’ or ‘Nei Juan’ in China. A lot of companies are being very cautious right now, because they want to ensure that if they make the investment into new products or technologies that at the end of the day, they’re gonna be able to sell these products at a price profit, right? They are profit-driven companies. It’s normal. Because there’s a lack of demand in the market. For a lot of them, what they are looking at is not simply the high-level statements and policies, they’re actually looking at what’s happening in the market for themselves.
(MUSIC)
RUI: Activity in China’s services sector continued to expand in February, as demand picked up, leading employment levels to stabilise, according to a private survey conducted by Caixin and S&P Global.
MARIANN: The Caixin services purchasing managers’ index or PMI stood at 51.4 points in February, remaining above the 50-point mark separating growth from contraction for the 26th consecutive month. Both supply and demand continued to increase, with the subindex for new export orders reaching a three-month high. The subindex for employment climbed above the 50-point benchmark as some service providers increased their staffing levels to meet higher demand. The gauge for input costs dropped for the first time in almost five years, leading some service companies to decrease their prices to stimulate sales. Service firms surveyed were generally upbeat about their one-year outlook.
(MUSIC)
RUI: Since Donald Trump’s inauguration as US President on 20th January, a wave of policy adjustments have been underway, impacting the US economy and its global relationships. Trump’s inaugural address echoed themes from his first term, promising an “America First” vision and a national renewal. As expected, he already slapped tariffs on a number of the US’ trade partners, including Canada, Mexico and China.
MARIANN: Join us on 17th March, when Carlo D’Andrea, Vice President of the European Chamber and Chair of the Chamber’s Shanghai Chapter will sit down with Joerg Wuttke, Partner at Albright Stonebridge Group and President Emeritus of the European Chamber to discuss what to expect from the second Trump administration.
RUI: Drawing on his extensive experience, Mr Wuttke will share his insights on what potential consequences the US’ trade policies might have on Chinese economic growth and what moves Trump is likely to make towards Europe.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Annual Government Work Report;
- Official Purchasing Manufacturing Index (PMI) in February;
- European Commission to simplify rules on sustainability; and
- The United States raised additional tariffs on Chinese imports.
Listeners are also invited to join the townhall briefing on 13th March in Beijing or online, during which President Jens Eskelund will share his key takeaways from the 2025 European tour.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China official PMI, February (NBS)
https://www.stats.gov.cn/sj/zxfb/202503/t20250301_1958837.html
European Commission’s first Omnibus package to simplify rules on sustainability
https://ec.europa.eu/commission/presscorner/detail/en/ip_25_614
European Chamber event: Townhall meeting by the President on the European Tour 2025
https://www.europeanchamber.com.cn/en/upcoming-events/27289/_Hybrid_Townhall_Briefing_by_the_President_on_the_European_Tour_2025
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 5th March 2025.
(MUSIC)
RUI: At the annual meeting of the National People’s Congress, similar to last year, China set the target for economic growth in 2025 at around 5 per cent and pledged to further deepen comprehensive reform and expand high-standard opening up.
MARIANN: In his speech introducing the annual government work report, Premier Li Qiang said that China would encourage foreign investment. Specifically, he mentioned opening up sectors related to the internet and culture, and expanding trials to open other sectors including telecommunications, medical services and education. He also reiterated the pledge to ensure national treatment for foreign-invested enterprises in the areas of access to production factors, license applications, standards setting and government procurement. He also vowed that China will provide better services for foreign professionals.
Premier Li also used his speech to acknowledge difficulties with China’s economic recovery, and highlighted areas in which efforts should be made to support growth. These include boosting domestic consumption, addressing local government debt and restoring stability to the real estate market.
The European Chamber will continue to work with Chinese stakeholders and offer constructive recommendations on where concrete steps are needed to turn these pledges into the kind of actions that can improve business confidence among foreign companies.
(MUSIC)
RUI: According to official data released by the National Bureau of Statistics on 1st March, manufacturing activity in China expanded in February.
MARIANN: The manufacturing purchasing managers’ index or PMI stood at 50.2 points, which was only slightly above the 50-point benchmark separating growth from contraction. It was, however, the highest level recorded since last November. A breakdown by company size indicated that it was a strong rebound in activity at large manufacturing firms that drove the headline figure up, as the subindices for medium- and small-sized companies both sank further below the benchmark.
Supply and demand both expanded but production increased more – the statistics bureau attributed this to a fast recovery in activity after the Chinese New Year holiday. The subindex for employment in the manufacturing sector improved to the highest level seen over the past twelve months, but still remained well below the benchmark.
The non-manufacturing PMI rose further above 50 points in February, but continued to indicate limited expansion, which was largely driven by a sudden increase in construction activity. Services activity meanwhile stagnated, as demand for services dropped sharply in February.
(MUSIC)
RUI: On 26th February, the European Commission announced a new proposal package aimed at reducing administrative burdens in connection with sustainability reporting and due diligence.
MARIANN: This first series of the so-called ‘Omnibus’ packages includes amendments to the Corporate Sustainability Reporting Directive or CSRD, the Corporate Sustainability Due Diligence Directive, or CSDDD, the Carbon Adjustment Mechanism or CBAM, and the InvestEu Regulation. The aim is to balance the EU’s sustainability efforts with the goal of strengthening EU companies’ competitiveness. Key points in the package include a proposal to postpone the application of CSRD and CSDDD reporting requirements. The Commission highlighted that the proposals would especially benefit small and medium-sized companies and would lead to significant savings in annual administrative costs.
(MUSIC)
RUI: On 3rd March, US President Donald Trump raised tariffs on Chinese imports by an additional ten per cent, bringing the total to twenty per cent. China responded with several countermeasures, including additional tariffs on several US agricultural products and restrictions on US companies.
MARIANN: The US hiked tariffs on Chinese imports as it deemed the country uncooperative with regard to the US’ efforts at stopping fentanyl and other illegal drug imports. China immediately hit back by announcing additional tariffs on selected US agricultural imports—including soybeans, beef, pork, chicken and dairy products—ranging from 10 to 15 per cent. Furthermore, China added ten US companies to the Unreliable Entity List, and 15 entities to the Export Control List. All impacted companies have connections to the US defence sector.
(MUSIC)
RUI: From 3rd to 7th of February, a European Chamber delegation composed of 27 industry representatives and led by President Jens Eskelund travelled to Brussels for the Chamber’s first European Tour since the 2024 European Union elections.
MARIANN: During the tour, delegates shared industry insights on the policy and business environment in China with both high- and working-level counterparts. The group met with the European Commission, the European Parliament, the Council of the EU and the European Council, as well as industry, think tanks and business associations. After the Brussels-leg of the tour, President Eskelund and a few delegates travelled to Rome, Paris and Berlin. In total 87 meetings took place in 12 days.
RUI: Join us on 13th March for a member-exclusive townhall briefing, during which President Jens Eskelund will share his key takeaways from the tour including his perceptions of the current thinking in Europe about the EU-China relationship.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- State Council’s Action Plan for Stabilising Foreign Investment
- Actual use of foreign direct investment in China in January 2025
- The Council of the EU adopts 16th sanction package on Russia’s war against Ukraine
- Financial Times report on China’s spending on individual consumption
Listeners are also invited to join the event The German Election—Which Way Forward For EU-China Relations? on 27th February online or in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
State Council’s Action Plan for Stabilising Foreign Investment
https://www.gov.cn/zhengce/content/202502/content_7004409.htm
Actual use of FDI in China in January 2025
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_9e9953406cf64360902e91a28f7967f9.html
European Council adopts 16th sanction package on Russia’s war against Ukraine
https://www.consilium.europa.eu/en/press/press-releases/2025/02/24/16th-package-of-sanctions-on-russia-s-war-of-aggression-against-ukraine-eu-lists-additional-48-individuals-and-35-entities/
https://www.mofcom.gov.cn/xwfb/xwfyrth/art/2025/art_2fce4abe2f064db897ed388c15ca1d0d.html
Financial Times report on China’s spending on individual consumption
https://www.ft.com/content/75f97747-53f4-4447-8c14-8a078bdc8750
European Chamber event: The German Election—Which Way Forward For EU-China Relations?
https://www.europeanchamber.com.cn/en/upcoming-events/27155/_Hybrid_The_German_Election_Which_Way_Forward_for_EU_China_Relations_
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 26th February 2025.
(MUSIC)
RUI: On 19th February, the State Council issued an action plan comprising twenty points aimed at stabilising foreign investment.
MARIANN: The plan is seen as a continuation of recent Chinese Government pledges to improve the business environment for foreign investment. Key points include expanding pilot projects in areas such as telecommunications, healthcare and education, promoting the orderly opening up of the biomedical field and abolishing restrictions on the use of domestic loans by foreign-invested companies.
It is a notable positive that the document includes a point on the need to define what qualifies as a ‘domestic product’ for public procurement and reinforces the principle of providing equal access to public procurement for foreign firms that manufacture their goods in China. If fully implemented, this could benefit those foreign companies that have made considerable investments to localise their production in China – many of whom have done so in order to meet ‘Made in China’ requirements. However, it also suggests that imports will not qualify for public procurement, which in turn could contribute to a further increase of trade imbalances with China’s key partners.
RUI: The Action Plan calls on the relevant authorities to effectively implement the listed points in 2025. The Chamber therefore looks forward to the release of supporting measures and timelines for implementation and will continue its efforts to advocate for tangible benefits for our members.
(MUSIC)
RUI: According to data published by China’s Ministry of Commerce on 19th February, in the first month of 2025 the actual use of foreign direct investment in China surpassed 97 billion yuan.
MARIANN: This was a drop of 13.4 per cent compared to the same period last year. However, the rate of decrease was the lowest recorded in twelve months. The month-on-month figure showed an uptick of 27.5 per cent, indicating a surge in FDI utilisation in January.
(MUSIC)
RUI: On 24th February, the Council of the EU adopted its 16th package of sanctions against Russia, which included several Chinese firms and individuals identified by the Council as “responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine”.
MARIANN: The Council’s official press release mentioned one Chinese company specialised in the production of satellite imagery which it decided to sanction along with its chairman. A day later, China’s Ministry of Commerce warned that the EU’s decision to include Chinese entities in its latest round of sanctions would have a negative impact on the bilateral trade relationship.
(MUSIC)
RUI: In a report published on 23rd February, the Financial Times provided an analysis of China’s government spending on citizens, concluding that relatively low expenditure to support consumption could undermine growth efforts.
MARIANN: The analysis, which was based on World Bank data showed that China spends about 6 per cent of its GDP on individual consumption, which includes services such as healthcare that directly benefit citizens. In this regard, it lags behind the majority of Brics members, including Brazil and Russia. The report cited economists saying that even countries that spent about the same as China or even somewhat less on individuals had much higher private consumption levels than China. It explained this discrepancy with structural and cultural differences which in China lead to a higher than average level of cautiousness when it comes to spending.
(MUSIC)
RUI: The collapse of Germany’s ruling coalition and a subsequent vote of no confidence in Chancellor Scholz’s government paved the way for snap elections on 23rd February. Growing political and economic uncertainty in Germany has left many voters concerned about the country’s future.
MARIANN: As Germany is the largest economy in Europe, the German election was closely followed by the international community. Its result has the potential to redraw the contours of the country’s political landscape and impact the EU’s policies and internal power dynamics, as well as EU-China relations.
RUI: Join us on 27th February for fresh insights from industry and policy experts on questions about Germany’s foreign policy outlook, the new administration’s potential impact on German industry, EU policy and EU-China relations.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Chinese President meets private entrepreneurs;
- Caixin analysis of 2025 local GDP growth targets;
- China Nonferrous Metals Industry Association opposes US tariffs on aluminium products;
Listeners are also invited to join the event Digital Transformation in Retail—Experiential Retail on 26th February in Shanghai.
Read more:
Chinese President meets private entrepreneurs
Xinhua Headlines: Xi urges healthy, high-quality development of private sector-Xinhua
Graphics: Private sector’s share of the Chinese economy – CGTN
Caixin analysis of 2025 local GDP growth targets
In Depth: China’s Policymakers Target Consumption to Kick Economy Into Gear
China Nonferrous Metals Industry Association opposes US tariffs on aluminium products
Chinese industry association opposes additional US tariffs on aluminum – China.org.cn
Macro Tariff Playbook: steel and aluminum tariffs | EY – US
Chamber event: Digital Transformation in Retail—Experiential Retail
Digital Transformation in Retail: Experiential retail
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 19th February 2025.
(MUSIC)
RUI: On 17th February, Chinese President Xi Jinping attended a closed-door meeting with private entrepreneurs and delivered a speech calling for the high-quality development of the private economy.
MARIANN: In his speech, he highlighted the need to guarantee that private firms have equal access to production factors and can compete on a fair basis with their rights and interests effectively protected. In this regard, he listed problems such as overdue payments owed to private firms, random inspections and arbitrary fines. The President said that private companies play an important role in China’s efforts at technological innovation, and in achieving broader goals focused on improving people’s quality of life.
An article published by CGTN following the meeting provided an overview of the private sector’s contribution to the Chinese economy: it accounts for nearly half of foreign trade, over 60 per cent of GDP, over 70 per cent of technological innovations and more than 80 per cent of urban employment. CGTN also reported that lawmakers are now deliberating a draft of China’s first basic law focused on private sector growth.
RUI: The meeting was widely seen as an attempt to boost confidence in the private sector, after mixed messaging form the Chinese Government gave rise to concerns that the playing field will be increasingly tilted towards the state sector. Notably, the Third Plenum Decision stated that the market should play “the decisive role in resource allocation”, but at the same time it also called for “state capital and SOEs [to] get stronger, do better, and grow bigger, with their core functions and core competitiveness enhanced.”
In the days following the meeting, the National Development and Reform Commission, the Ministry of Industry and Information Technology and the Supreme People’s Procuratorate all announced various efforts at supporting the development of the private economy, including removing market access barriers, introducing more inclusive and targeted policy measures and improving legal protection for private firms.
(MUSIC)
RUI: In a report published on 14th February, Caixin provided analysis of the local government work reports released by the 31 provincial-level governments in the Chinese mainland.
MARIANN: The provincial-level governments all held their annual meetings over the course of January and set their local GDP growth targets for 2025. The national target will be officially set during the Two Sessions held in Beijing in March. Caixin’s analysis showed that the top task for most local governments this year is expanding domestic demand. Other common goals listed by many include improving the business environment and promoting employment. As for the growth targets, Caixin pointed out that 15 out of the 31 regions set them lower than the 2024 targets, suggesting that they expect a difficult year ahead. Another 15 kept their targets largely unchanged from 2024. For the overwhelming majority—all mainland provinces with the exception of Qinghai—the target was set at around 5 per cent.
(MUSIC)
RUI: On 18th February, the China Nonferrous Metals Industry Association opposed the additional tariffs on aluminium products, announced by the US government on 10th February.
MARIANN: In its statement the Association highlighted the important role that the aluminium industry plays in global supply chains and called the US move disruptive to the balance of supply and demand in global markets in all related sectors. They argued that this would lead to price volatility and undermine the interests of producers, traders and consumers alike. The new 25 per cent tariffs are scheduled to come into effect on 12th March and will apply to all steel and aluminium imports. Data published by EY Parthenon showed that the new tariffs will hit Canada the hardest, as the country supplies half of the US’ aluminium imports and a fifth of its steel imports. By comparison, China will be impacted to a lesser extent, as it is only the fifth largest source of US aluminium imports and only the eighth largest for steel.
(MUSIC)
RUI: Over the past few years, more and more consumers have engaged in online shopping. With the upgrade of mobile devices, consumers can enjoy online shopping anytime, anywhere.
MARIANN: This has contributed to the maturing of certain technologies such as artificial intelligence, big data, Internet of Things, augmented and virtual reality. These technologies have provided powerful support for the digital transformation of the retail industry, enabling retailers to better understand and adapt to consumer demands.
RUI: Join us in Shanghai on 26th February to learn more about retail industry trends, such as intelligent inventory management, supply chain optimisation and automated business processes from seasoned industry insiders.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- January producer and consumer price indexes;
- The United States imposed additional tariff on Chinese imports;
- State Council Executive meeting; and
- Rhodium Group report on China’s role in global supply chains;
From the Chamber’s side, the European Tour 2025 took place in Brussels between 3rd and 7th February.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China January price indexes (NBS)
https://www.stats.gov.cn/sj/zxfb/202501/t20250117_1958332.html
State Council Executive meeting
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_61cf09e39b644ca18e684a1d0f87d09a.html
Rhodium Group report on China’s role in global supply chains
https://rhg.com/research/china-and-the-future-of-global-supply-chains/
European Chamber EU Tour 2025
https://mp.weixin.qq.com/s/73Ub76dfYrqch7ZGYY6uDg
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 12th February 2025.
(MUSIC)
RUI: In January, China experienced its 29th consecutive month of producer price deflation. Meanwhile, consumer prices rose at the fastest pace in five months, although the increase was still not substantial.
MARIANN: Producer prices dropped 2.3 per cent year-on-year in January. The rate of decrease was unchanged from the previous month. The National Bureau of Statistics attributed the fall in producer prices mainly to the fact that industrial production entered its off-season around the time of the Chinese New Year holiday. Conversely, the holiday was marked as the key reason behind the increase in consumer prices, with the index rising 0.5 per cent year-on-year, primarily due to an increase in the prices of food and services. Deflation is a key concern for businesses, as the appetite for investments drops in a deflationary environment. It is also an issue for China’s trade partners, as the combined problems of deflation and weak demand are externalised through exports to other markets, which is contributing to an increase in trade imbalances with many of China’s key partners.
(MUSIC)
RUI: On 1st February, the United States government declared a national emergency and imposed tariffs on imports from Canada, Mexico, and China, citing issues like illegal immigration and drug trafficking. On 4th February, a 10 per cent tariff on Chinese imports to the US was implemented.
MARIANN: This additional tariff came on top of existing tariffs on Chinese imports, raising the average tariff rate to about 25 per cent.
China responded by filing a case with the WTO dispute settlement mechanism and announcing additional tariffs on certain US imports. These included a 15 per cent tariff on liquified natural gas and coal, and a 10 per cent tariff on crude oil, agricultural machinery, large-displacement cars, and pickup trucks originating from the US. China also announced export controls on 25 rare metal products and technologies, requiring licences for exports. Additionally, several US companies were added to China’s “entities list”, and an anti-monopoly investigation was initiated against Google.
(MUSIC)
RUI: On 10th February, Chinese Premier Li Qiang chaired a State Council executive meeting, focusing on measures to boost domestic consumption and stabilise foreign investment in 2025.
MARIANN: During the meeting emphasis was placed on increasing household incomes, promoting wage growth, and strengthening consumption capacities. It identified areas with large consumption growth potential that could also have a spillover effect into other areas, including culture, sports and tourism. The meeting also stressed the importance of expanding inbound tourism consumption and supporting China’s consumer goods trade-in programme.
Additionally, the meeting recognised the significant role of foreign enterprises in job creation, export stabilisation, and industrial upgrading. It called for practical measures to stabilise and expand foreign investment, optimise the services sector opening-up pilot programme, and encourage foreign equity investment in China. The meeting urged equal treatment for domestic and foreign enterprises in government procurement and broader financing channels for foreign firms.
(MUSIC)
RUI: According to a report published by the Rhodium Group on 4th February, driven by strong industrial policies and domestic imbalances, China’s role in global production and exports continues to expand. However, concerned about their own industries, jobs, and supply chain security, trading partners are pushing back, with some erecting trade barriers, while others prioritising the “de-risking” of strategic supply chains.
MARIANN: The report finds that the global market share of China’s manufacturing sector has grown significantly over the past decade, particularly in apparel, consumer electronics, solar photovoltaics and autos. While some production has moved out of China since the US-China trade war in 2017, China’s resilience as a producer of inputs and finished goods remains strong. Policy is now a key driver of diversification, with countries like India and Vietnam attracting significant investments. However, diversification often involves Chinese companies, complicating efforts to reduce overall dependency on China. The Rhodium Group also highlighted that China’s dominance in various supply chains has made it a global price maker in many industries, allowing it to reverse market share losses over time, especially in the context of overcapacity, high inventories, and declining producer prices. Conversely, relocation to smaller markets can create inflationary pressures that disrupt diversification momentum.
(MUSIC)
RUI: The European Chamber held the Brussels leg of its European Tour 2025 between 3rd and 7th February. This was the first such tour since the 2024 European Union elections.
MARIANN: The delegation, led by Chamber President Jens Eskelund and comprising the Chamber’s vice presidents, board members, and senior working group representatives, held over 50 meetings during the week-long tour. They presented the Chamber’s key messaging and recent reports to European authorities, industry, and business associations. Meetings included sessions with four European Commissioners, three Heads of Cabinet, nine Director Generals, and the Chinese Ambassador to the European Union.
RUI: Visit the Chamber’s WeChat account to find out more about the meetings the delegation attended in Brussels and to keep up to date with the representatives continuing the tour into other European capitals.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s GDP and macroeconomic data in 2024;
- Foreign direct investment in 2024;
- The EU’s report on International Procurement Instrument investigation into China’s public procurement for medical devices; and
- EU launches challenge against China at the WTO on royalties for EU high-tech sector;
The Chamber released Siloing and Diversification: One World, Two Systemsreport on 9th January, which is available to download from the Chamber’s official website.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China GDP and macro data for Q4 and 2024 (NBS)
https://www.stats.gov.cn/sj/zxfb/202501/t20250117_1958332.html
https://www.stats.gov.cn/sj/zxfb/202501/t20250117_1958331.html
China FDI 2024 (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_61cf09e39b644ca18e684a1d0f87d09a.html
EU report on IPI investigation into China’s public procurement for medical devices
https://ec.europa.eu/transparency/documents-register/detail?ref=COM(2025)5⟨=en
EU launches challenge against China at the WTO on royalties for EU high-tech sector
https://ec.europa.eu/commission/presscorner/detail/en/ip_25_293
European Chamber report: Siloing and Diversification: One World, Two Systems
https://www.europeanchamber.com.cn/en/publications-siloing-diversification
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 22nd January 2025.
(MUSIC)
RUI: Official data published on 17th January indicate that China’s economic growth reached the target set during the March Annual Government Report in 2024. This surprised some given than low domestic demand and deflation have been key characteristics of China’s economy throughout the year.
MARIANN: According to the National Bureau of Statistics, China’s gross domestic product, or GDP, increased 5 per cent year-on-year in 2024, matching the official target of “around five per cent”. This has been attributed by some to a strong acceleration of growth in the final quarter, when China’s GDP reportedly increased 5.4 per cent compared to the same period a year prior, after a host of unprecedented support measures were rolled out from September onwards.
Macroeconomic data released along with the GDP figures shed further light on the imbalances in China’s economic performance. Production at larger industrial firms increased 6.2 per cent year-on-year in December, which was the fastest increase recorded in eight months. The annual growth in 2024 overall was 5.8 per cent. Meanwhile, growth in retail sales was off the pace by some margin, at 3.7 per cent in December, and 3.5 per cent for the whole of 2024.
A report released by Rhodium Group at the end of December 2024, had placed China’s GDP growth at around 2.4 to 2.8 per cent, based on a number of economic measures. The report notes that the area where Rhodium’s assessment deviates most from official data was in terms of “gross fixed capital formation”, with “differences in household consumption also important.”
(MUSIC)
RUI: Data released by China’s Ministry of Commerce on 17th January showed that in 2024, foreign direct investment, or FDI, into the country decreased more than 27 per cent compared to the previous year.
MARIANN: The total sum of utilised FDI in 2024 exceeded 800 billion yuan, a drop of more than a quarter of the 1.1 trillion yuan recorded in 2023. It is notable that despite the significant decrease in the actual use of FDI, the number of newly established, foreign-invested enterprises grew almost 10 per cent from the previous year, with over 59 thousand new entities registered in 2024.
(MUSIC)
RUI: On 14th January, the European Commission released a report on the first stage of its investigation into China’s public procurement market for medical devices, concluding that China’s practices are limiting EU companies’ access in an unfair and discriminatory way.
MARIANN: The investigation was launched in April under the EU’s International Procurement Instrument, a new regulatory tool aimed at promoting reciprocal access to international public procurement markets. A lack of fair access to procurement in China is a longstanding issue for European companies operating in the country. It has been a key advocacy topic for the European Chamber’s Healthcare Equipment Working Group since the launch of the China Manufacturing 2025 initiative in 2015, which included market share targets for domestic, high-end medical devices. It ranked as the third most significant regulatory challenge faced by Chamber members in the medical devices sector, according to the Business Confidence Survey 2024.
Under the EU’s rules, it now has a mandate to take action to limit or exclude Chinese companies’ access to the EU’s public procurement market, but official communication suggests that as a first step the Commission will prioritise dialogue with the Chinese side to find a solution.
(MUSIC)
RUI: On 20th January, the European Commission requested dispute settlement consultations at the World Trade Organization, accusing China of “unfair and illegal trade practices” in intellectual property protection.
MARIANN: According to the Commission’s complaint, by empowering its courts to set worldwide royalty rates for high-tech patents, China is pressuring European companies—especially those in the telecommunications sector—into lowering their rates globally, which in turn provides cheaper access to European technologies for Chinese manufacturers. China’s Ministry of Commerce expressed regret over the EU’s complaint and stated that China has been improving its legal framework for intellectual property rights protection in adherence with WTO rules. The two sides have 60 days to find a solution before the EU can request the WTO to set up a panel to rule on the matter.
(MUSIC)
RUI: On 9th January, the European Chamber published its new report Siloing and Diversification: One World, Two Systems, which highlights the high cost to both business and the economy as a result of companies being compelled to silo their operations in China.
MARIANN: Geopolitical and trade tensions, and China’s self-reliance policies, coupled with growing domestic and global regulatory risks, are leading many multinational companies to separate certain China-based functions, or even entire operations, from those in the rest of the world. This is a considerable trade-off: siloing gives rise to an increase of both overall costs and global compliance risks, as well as the need to have duplicate operations and production, ultimately resulting in inefficiency, reduced innovation capacity and a loss of international competitiveness.
RUI: Download the report for free from the Chamber’s website to find out what kind of risks siloing trends are posing to businesses and China’s economy.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again after the Chinese New Year holiday.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Producer Price Index and Consumer Price Index in December and 2024;
- Foreign trade data in 2024; and
- National commerce work conference.
Listeners are also invited to join the event China’s Economic Outlook 2025: Opportunities for FIEs after the Central Economic Work Conference on 16th January in Beijing or online.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China PPI, CPI December and 2024 (NBS)
https://www.stats.gov.cn/sj/sjjd/202501/t20250109_1958168.html
China foreign trade data 2024 (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6312599/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6312783/index.html
National commerce work conference
https://www.mofcom.gov.cn/xwfb/bldhd/art/2025/art_0796c059fe504c5eb07376213a7aaffb.html
Chamber event: China’s Economic Outlook 2025: Opportunities for FIEs after the Central Economic Work Conference
https://www.europeanchamber.com.cn/en/upcoming-events/27058/_Hybrid_China_Economic_Outlook_2025_Opportunities_for_FIEs_After_the_Central_Economic_Work_Conference
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 15th January 2025.
(MUSIC)
RUI: Producer prices in China fell for the 27th month in a row in December, while consumer price growth continued to hover around zero, according to data released by China’s statistics bureau on 9th January.
MARIANN: Producer prices dropped 2.3 per cent compared to the same period in the previous year. The rate of decline showed a gradual easing from last year’s low point of 2.9 per cent recorded in October over the final two months of the year. In 2024, overall producer prices fell 2.2 per cent compared to the previous year.
Consumer prices edged up 0.1 per cent year-on-year in December, and 0.2 per cent in the whole of 2024. This was way below the government’s target set in the March 2024 Government Work Report, which set consumer price inflation at ‘around 3 per cent’.
(MUSIC)
RUI: Data published by China’s customs authorities on 13th January showed that the country’s trade surplus reached almost 1 trillion US dollars.
MARIANN: In dollar denominated terms, the total value of China’s exports increased 10.7 per cent year-on-year in December. The annual export growth was 5.9 per cent. Conversely, import growth was subdued both in December as well as throughout 2024. In December, the total value of imports edged up 1 per cent, following two consecutive months of decline. The annual import growth was 1.1 per cent.
The discrepancy between its exports and imports led China to reach a trade surplus of 992 billion US dollars in 2024. Some of last year’s sharp surge in exports, especially towards the end of the year, was widely attributed to export ‘front loading’, as Chinese exporters fast-tracked their shipments to the US before the new Trump administration comes into office later this month. Trump has stated that he will slap steep tariffs on goods imported to the US from China.
Customs data showed that in the last two months of 2024, the US overtook the EU as China’s second largest export market in cumulative terms. Looking at overall trade, however, the EU still maintained its position as China’s second largest trade partner, preceded only by the Association of Southeast Asian Nations, which is its largest trade partner for the fourth year running.
(MUSIC)
RUI: At the two-day national commerce work conference, held in Beijing on 11th and 12th January, Chinese policymakers reinforced earlier pledges to boost consumption and attract foreign investment in the year ahead.
MARIANN: Among steps to boost consumption, discussions at the meeting focussed on the consumer goods trade-in programme, as well as the promotion of services and digital consumption. As for the task of attracting foreign investment, the meeting readout highlighted the need to build a “first-class business environment” and to leverage China’s national economic development zones to attract foreign investment.
Chinese Minister of Commerce, Wang Wentao, who delivered an annual work report at the meeting, also emphasised the need to lay the groundwork for the next five-year plan, as 2025 is the last year covered in the current, 14th Five-year Plan.
(MUSIC)
RUI: The Central Economic Work Conference, held in Beijing in December, outlined the key tasks for 2025. It called for efforts to drive the development of ‘new quality productive forces’ and to expand high standard opening up, while keeping foreign trade and foreign investment stable.
MARIANN: Meanwhile, over the past half-decade or so, an increasing number of international companies have conducted reviews of their global resilience, with their China operations seen as being particularly exposed to various risk factors and increasing trade tensions. The trend of companies diversifying their supply chains has also become more pronounced.
RUI: Join the European Chamber’s event China Economic Outlook 2025 online on 16th January, to hear economists, think tankers and policy experts decode China’s economic landscape and explore some of the opportunities for foreign-invested enterprises in 2025.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- A draft standard for government procurement of domestically produced products;
- Strengthening dual-use products export control to the United States;
- Consumer and producer price indices in November;
- Foreign trade data in November.
From the Chamber’s side, Secretary General Adam Dunnett met Hainan provincial leaders at an event on the Hainan Free Trade Port hosted by the Ministry of Foreign Affairs.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Government procurement
https://gks.mof.gov.cn/gongzuodongtai/202412/t20241205_3949021.htm?mc_cid=ea5024219b&mc_eid=9f900b2fb7
Export controls
https://www.mofcom.gov.cn/zwgk/zcfb/art/2024/art_3d5e990b43424e60828030f58a547b60.html?mc_cid=148cd7d6a6&mc_eid=9f900b2fb7
Consumer and producer price index
https://www.stats.gov.cn/sj/zxfb/202412/t20241209_1957688.html
https://www.stats.gov.cn/sj/zxfb/202412/t20241209_1957689.html
China’s foreign trade data, November
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6252469/index.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 11th December 2024.
(MUSIC)
RUI: On 5th December, the Ministry of Finance released a draft standard for government procurement of domestically produced products, providing long-awaited guidance on what constitutes ‘Made in China.’
MARIANN: According to the draft standard, in addition to the requirement that a product be assembled in China, key components must also be made in China for the product to be considered domestic. The guidelines specify that foreign-invested enterprises—or FIEs— should be treated equally, meaning that on paper, FIEs that produce a qualifying product in China should have an equal chance of winning government procurement contracts. In practice, many Chamber members report facing informal procurement barriers, and it remains to be seen if this new standard will help reduce them. The draft standard raises the stakes even further by providing a 20 per cent price advantage to domestically produced products, meaning procurement decisions between a domestic and imported product will be made as if the domestic product is 20 per cent cheaper than its actual price. The Chamber is currently collecting member comments on the standard for submission to the Ministry of Finance.
(MUSIC)
RUI: On 3rd December, the Ministry of Commerce announced a ban on exports of gallium, germanium, antimony and superhard metals to the United States as well as stricter controls on exports of graphite.
MARIANN: The move marks a significant escalation of the ongoing tech war between the US and China, and Chamber members are increasingly worried about being caught in the crossfire. A number of European companies are already receiving requests from customers to produce goods with no US- or China-sourced components, depending on which market the goods are destined for, to meet both current and anticipated compliance requirements.
(MUSIC)
RUI: On 9th December the National Bureau of Statistics released November’s consumer and producer price indices, both of which indicated continued deflationary pressure in the Chinese economy.
MARIANN: The consumer price index increased 0.2 per cent year-on-year in November, however, this growth is partly attributable to a recent revision of how the index is calculated – more specifically that the weight pork prices bear on the overall index has been reduced. The producer price index fell by 2.5 per cent in November, marking its 26th consecutive month of decline. Ongoing deflationary pressures continue to signal trouble for China’s economy, despite a series of support measures announced over the last few months.
(MUSIC)
RUI: According to data released by China’s customs authority on 10th December, in November, the year-on-year growth of China’s exports slowed, with imports decreasing at a faster pace than in the previous month.
MARIANN: In dollar terms, the total value of Chinese exports increased 6.7 per cent from the same period a year ago. However, this represents a substantial decrease from October, when the year-on-year growth was 12.7 per cent. China’s imports dropped 3.9 per cent year-on-year in value, which was the starkest decline recorded since September 2023. In the first eleven months of the year, the value of China’s exports to the European Union increased 5.9 per cent, while the value of its imports from the EU dropped 10.8 per cent. Overall, the EU looks set to secure its place as China’s second largest trading partner in 2024, with the Association of Southeast Asian Nations holding on to top spot in the January-November period, and the United States following the EU in third place.
(MUSIC)
RUI: On 4th December, European Chamber Secretary General Adam Dunnett attended an event on the Hainan Free Trade Port hosted by the Ministry of Foreign Affairs. Wang Yi, minister of foreign affairs, delivered a speech.
MARIANN: Dunnett met and spoke with Hainan Party Secretary Feng Fei, Hainan Governor Liu Xiaoming, Hainan Executive Vice Governor Ba Teer, and Hainan Provincial Committee Chair of CCPIT Ning Hongwen. He thanked the Hainan Government for its work with the European Chamber’s Cosmetics Working Group on a pilot project for offshore duty-free e-labelling, which has resulted in a positive outcome for industry and government.
RUI: He also highlighted the strong interest from European brands in investing in and operating in Hainan’s duty-free market, and recommended ensuring equal access to this sector after Hainan completes the establishment of a special customs system, post-2025.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again in January, when we will be back with new episodes.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Guidelines to further develop digital trade;
- Pilot work plan permitting the establishment of wholly foreign-owned hospitals;
- November Official Purchasing Managers Index (PMI) and Caixin China Manufacturing and Services PMI;
- January to October industrial profits;
Listeners are also invited to join the European Chamber Annual Conference: Looking Back and Moving Forward on 10th December in Beijing to hear from business leader, economists, academics and China experts.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Guidelines on the development of digital trade
https://english.www.gov.cn/policies/latestreleases/202411/29/content_WS6748f504c6d0868f4e8ed7fb.html
Pilot work plan permitting the establishment of wholly foreign-owned hospitals (NHS)
http://english.scio.gov.cn/chinavoices/2024-12/02/content_117580667.html
China November Official PMI (NBS)
https://www.stats.gov.cn/sj/zxfb/202411/t20241130_1957624.html
China Caixin Manufacturing and Services PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/3516d9096c574bee9ded33a3cd219e28
https://www.pmi.spglobal.com/Public/Home/PressRelease/c7d6a8039f78475ca4fc6970a111f81d
China January-October industrial profits (NBS)
https://www.stats.gov.cn/sj/zxfb/202411/t20241127_1957580.html
European Chamber event: Annual Conference 2024 – Looking Back, Moving Forward
https://www.europeanchamber.com.cn/en/upcoming-events/26792/European_Chamber_Annual_Conference_2024_Looking_Back_Moving_Forward
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode—the 100th in our series—was recorded on 4th December 2024.
(MUSIC)
RUI: In a high-level policy document issued on 28th November, China has set goals to further develop digital trade.
MARIANN: The guideline, co-published by the general offices of the Communist Party of China Central Committee and the State Council, contains 18 points. A concrete target set is that the share of digitally delivered trade in services should exceed 45 per cent of overall trade in services by 2029, and should make up more than half of it by 2035. The document also pledges that China will ease market access for foreign investors in the digital sector, promising the opening of the telecommunications, internet and culture industries.
(MUSIC)
RUI: On 29th November, the National Health Commission and three other government departments released a pilot work plan that grants approval to eight cities and one province to allow the establishment of wholly foreign-owned hospitals.
MARIANN: The plan is not completely new. In 2014, the National Health Commission launched a similar pilot, with a larger geographical scope, that included four provinces. The pilot, however, did not lead to significant changes in the country’s medical services landscape. The National Health Commission and the Ministry of Commerce pledged to provide policy interpretations and address challenges faced by foreign investors with regard to land use and financing. It is a positive that according to the plan, wholly foreign owned hospitals will be able to apply to be included in the public health insurance system. Ultimately, the success of this scheme will also depend on how successfully participating foreign-owned hospitals will be able to compete with other public and private hospitals to secure highly qualified healthcare professionals.
(MUSIC)
RUI: Manufacturing activity in China strengthened slightly in November, while services growth remained subdued, according to official data released by the National Bureau of Statistics on 30th November.
MARIANN:The official manufacturing purchasing managers’ index or PMI climbed to 50.3 points. This marked the second consecutive month when the index stayed above the 50-point benchmark separating growth from contraction. The increase in activity is attributable to large manufacturing companies, as a breakdown of the data showed that they were the only ones able to achieve growth, with activity at medium sized companies stagnating and even shrinking at small firms during the past month. As for the different aspects of activity: production continued to increase at a faster pace than new orders and the decrease in staffing levels accelerated.
The non-manufacturing PMI, which combines data about the construction and services sectors, stood at 50-points in November, indicating stagnation. While services activity did increase slightly, construction activity contracted. Both sectors were weighed down by a continued drop in demand.
(MUSIC)
RUI: The Caixin Manufacturing PMI, a dataset based on a private survey, also signalled an uptick in China’s manufacturing activity in November.
MARIANN:The Caixin data, released on 2nd December, showed that expansion in manufacturing picked up speed from the previous month. This was attributed to an increase in new orders as both domestic and export demand edged up in November. A rise in raw material costs hiked up selling prices. However, cost concerns were also reported to play a part in a decline in employment levels. Overall, sentiment among surveyed manufacturing firms improved, with respondents projecting better economic conditions for the year ahead.
As for the services sector, the Caixin data indicated that activity continued to grow in November, but at a slower pace, following a slowdown in new business growth. Despite this, an accumulation of backlogs led to service providers hiring additional staff.
(MUSIC)
RUI: Profits at larger industrial companies in China dropped year-on-year in the first ten months of 2024, at the fastest pace recorded in almost a year.
MARIANN:Data released by the statistics bureau on 27th November showed that in the January-October period, industrial profits dropped 4.3 per cent compared to the same period last year. A breakdown by the three largest industrial sectors indicated that the drop in profits was the most significant in the mining sector. Conversely, utilities firms were able to increase their profits. While manufacturing companies’ profits also shrank, overall, this sector made the most profits in absolute terms.
(MUSIC)
RUI: Despite the headwinds that China’s economy is facing, it demonstrated small signs of recovery over the past. The government support package announced in September provided a welcome boost, and there are more incremental policies in the pipeline. This could be good news for European companies that had reported in the Chamber’s Business Confidence Survey 2024 that China’s economic slowdown is currently the biggest business challenge they face.
MARIANN: Join us in Beijing on 10 December at this year’s annual conference to hear from business leaders, economists, academics and China experts, who will look back at the pivotal moments of 2024, discuss the key drivers for economic growth in the year ahead, and identify where the business opportunities still lie.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China extends visa-free trial programme;
- China expands scope of anti-subsidy investigation into EU dairy imports;
- EU launches WTO case against China’s provisional tariffs on EU brandy imports;
- 2nd China International Supply Chain Expo.
Listeners are also welcome to join the 2024 Cybersecurity Conference on 29th November in Beijing to learn about the latest regulatory developments in the field of cybersecurity and data protection.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China extends visa-free trial programme to 9 more countries
https://www.mfa.gov.cn/wjbzwfwpt/kzx/tzgg/202411/t20241122_11531285.html
https://www.ecns.cn/business/2024-11-23/detail-ihekectp0367196.shtml
China expands scope of anti-subsidy investigation into EU dairy imports
https://www.mofcom.gov.cn/myjjdc/art/2024/art_cb5fc3e80ff74dcd8cdfccf1f90caf18.html
EU launches WTO case against China’s provisional tariffs on EU brandy imports
https://ec.europa.eu/commission/presscorner/detail/en/ip_24_5848
2nd China International Supply Chain Expo
2nd China International Supply Chain Expo opens in Beijing – CGT https://news.cgtn.com/news/2024-11-26/2nd-China-International-Supply-Chain-Expo-opens-in-Beijing-1yQ8oDcnChy/p.htmlN
European Chamber event: 2024 Cybersecurity Conference
https://www.europeanchamber.com.cn/en/upcoming-events/26781/Cybersecurity_Conference_2024_2024
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 27th November 2024.
(MUSIC)
RUI: On 22nd November, China’s Ministry of Foreign Affairs announced that the trial visa-free programme will be extended to the citizens of nine more countries, and the limit for the duration of stay lengthened.
MARIANN: Starting from 30th November, passport holders from Bulgaria, Romania, Croatia, Montenegro, North Macedonia, Malta, Estonia, Latvia and Japan will be able to travel to China without a visa. The visa-free trial programme, which has been extended until the end of 2025, now allows visitors from 38 countries to stay in China for up to 30 consecutive days, up from the previous 15-day limit.
According to China’s Ministry of Culture and Tourism, the country saw a huge uptick in inbound tourism this year: in the first three quarters of 2024, over 94 million tourists visited China, which marked a year-on-year increase of nearly 79 per cent.
(MUSIC)
RUI: On 22nd November, the Trade Remedy and Investigation Bureau of China’s Ministry of Commerce announced that it is adding new items to its anti-subsidy investigation into dairy imports from the EU.
MARIANN: The notice attributes the decision to expand the scope of the investigation to the preliminary review and the consultations with the EU side. The new items added to the list include two more EU agricultural subsidy projects, and some offered on the member state level in France, Italy, Denmark and the Netherlands. The Bureau also released the questionnaires used for the newly added items.
(MUSIC)
RUI: On 25th November, the European Commission requested consultations at the World Trade Organization over China’s provisional anti-dumping tariffs on EU brandy imports.
MARIANN: The Commission warned that it would challenge the imposition of China’s provisional antidumping measures on EU brandy imports when these were first announced in October. At the time, the Commission called the move an “abuse” of trade defence instruments. China launched an anti-dumping probe into EU imports of brandy in January this year, citing complaints from its domestic industry as the reason. The EU side has been questioning the validity of the investigation from the beginning. China has 10 days to respond to the EU’s request for a WTO consultation, starting from 25th November. If the two sides fail to find a satisfactory solution, a WTO panel could be asked to make a decision about the case.
(MUSIC)
RUI: The second China International Supply Chain Expo opened on 26th November in Beijing with the theme ‘Connecting the World for a Shared Future’. The five-day event is hosted by the China Council for the Promotion of International Trade.
MARIANN: According to media reports, more than 600 companies registered to participate, with foreign exhibitors accounting for over 30 per cent of the total. The guest country of honour this year is Hungary, while the province of honour is Hubei, with the two co-organising a special conference to promote supply chain cooperation.
European Chamber President Eskelund had attended an exclusive roundtable with Premier Li Qiang a day before the expo opened, along with a select group of large, multinational companies. Premier Li used the opportunity to stress the benefits of a global division of labour and assure the gathering that China would continue to open its market further, while defending multilateral cooperation. Li also extolled the virtues of China’s complete industrial system and emphasised decarbonisation as a policy priority. President Eskelund also attended the China International Supply Chain Expo opening ceremony, during which Vice Premier Han Zheng delivered a keynote speech, which echoed the key points of Li’s roundtable address.
(MUSIC)
RUI: Over the past year, China has introduced a series of new regulations in the area of data security and cross-border data transfer. These include the Network Data Security Administrative Regulations and the Provisions on Promoting and Regulating Cross-border Data Flows, as well as national standards and guidelines on sensitive personal information identification. Free trade zones in Tianjin, Shanghai and Beijing have also issued negative lists or industry-based general data lists of cross-border data.
MARIANN: Looking ahead, work related to data classification and grading continues to advance, and regulations, such as personal information compliance audits and cybersecurity incident reporting, are still to be released. With the rapid, ongoing development of innovative technologies, new regulatory requirements will only continue to proliferate. As a result, companies operating in China will need to prepare to deal with emerging compliance challenges.
RUI: Join us on 29th November at the 2024 Cybersecurity Conference, where renowned experts, scholars and lawyers will discuss the latest regulatory developments in the field of cybersecurity and data protection to help companies better understand the relevant compliance requirements, as well as future development trends.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Value-added tax refund adjustment for certain exports;
- Industrial output in October;
- Retail sales in October;
- New export regulations on dual-use items.
Listeners are also invited to join a conference on 27th November in Beijing to explore the economic opportunities in National Climate Targets.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Export tax refunds
https://fgk.chinatax.gov.cn/zcfgk/c102416/c5235887/content.html
Industrial output
https://english.www.gov.cn/archive/statistics/202411/15/content_WS6736b646c6d0868f4e8ecfc6.html
https://www.stats.gov.cn/sj/zxfb/202411/t20241115_1957430.html
Consumer spending
https://www.stats.gov.cn/sj/zxfb/202411/t20241115_1957427.html
https://english.www.gov.cn/archive/statistics/202411/15/content_WS6736fbf2c6d0868f4e8ecff4.html
Dual use export control list
https://www.mofcom.gov.cn/zcfb/dwmygl/art/2024/art_e56833e346534981b250bae772d0cbce.html
Chamber event: Growing Green – How Does Industry Leverage the Economic Opportunities in National Climate Targets?
https://www.europeanchamber.com.cn/en/upcoming-events/26843
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 20th November 2024.
(MUSIC)
RUI: On 15th November the Ministry of Finance and the State Taxation Administration released a notice announcing the adjustment and cancellation of value added tax—or VAT—refunds for certain exports, a move aimed at addressing low export prices in the face of overcapacity concerns.
MARIANN: The adjustment—effective 1st December—cancels the VAT refund entirely for 59 products, including aluminium and copper products, and lowers the VAT refund from 13 to nine per cent for 209 products – including solar and lithium battery products. The decision comes amid increased international pressure on China to address market distortions caused by its exports. China’s exports of the impacted products are expected to surge for the rest of November in an effort to export as much as possible before the 1st December deadline.
(MUSIC)
RUI: China’s industrial output grew 5.3 per cent year-on-year in October according to data released by the National Bureau of Statistics —or NBS—on 15th November.
MARIANN: The figure—missing expectations – and down from 5.4 per cent in September—indicates that stimulus efforts have yet to have the desired impact on the Chinese economy. Even so, NBS spokesperson Fu Linghui said that industrial output growth is “a bright spot for the Chinese economy.” He noted that the “equipment and high-tech manufacturing sectors” were important drivers of the recorded growth, posting year-on-year gains of 6.6 and 9.4 per cent respectively.
(MUSIC)
RUI: Retail sales grew 4.8 per cent year on year in October according to the NBS, outperforming expectations.
MARIANN: The improved consumption, which NBS spokesperson Fu Linghui also referred to as a “bright spot” in the Chinese economy, can partly been attributed to Singles Day, sometimes referred to as ‘double 11’—an online shopping event that runs from October into November. Trade-in subsides announced earlier this year are also a likely driver. Sales of household appliances and audio-visual equipment—both covered by direct-to-consumer subsidies—were up 39.2 per cent year on year.
(MUSIC)
RUI: On 16th November, the Ministry of Commerce released a ‘dual use’ list, containing items that have both civilian and military applications, that will be subject to export control under China’s new Regulations on Export Control of Dual-use Items.
MARIANN: The list of around 700 items was released in advance of the new regulation coming into effect on 1st December. Notable products on the list include certain tungsten and magnesium alloys – both of which are critical materials that China controls the majority of the world’s extraction and processing of. Businesses exporting items included on the ‘dual use’ list will have to apply for export licences in advance, an existing process that the new regulation aims to simplify. While updates to the list may involve a public consultation period, China can also impose temporary export controls on goods when deemed necessary.
(MUSIC)
RUI: Under the Paris Climate Agreement, countries are required to submit Nationally Determined Contributions every five years, with the next round due by February 2025. These new targets are essential to limiting the global temperature rise to no more than 1.5° Celsius.
MARIANN: Businesses play a central role in translating these targets into reality, but challenges remain. More than 80 per cent of members reported that they rely on decarbonising energy use to achieve carbon neutrality, but limited access to renewable energy is still a widespread issue, with more than 60 per cent of companies reporting difficulties accessing the green energy they need. Dialogue between industry and policymakers therefore remains crucial to advancing a sustainable climate agenda compatible with economic development – in the EU, in China and globally.
RUI: Join us on 27th November in Beijing for the conference ‘Growing Green – How Does Industry Leverage the Economic Opportunities in National Climate Targets?’. This event, hosted by the European Chamber and the German Embassy, is free for members and open to the public with advance registration.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Foreign trade data in October;
- The consumer and producer price indexes in October;
- Local government debt swaps;
- Loan data for the first 10 months of 2024.
Listeners are also welcome to join the ESG Strategies Conference on 21st November in Shanghai to gain valuable perspectives on emerging trends in ESG.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Foreign trade data
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6194965/index.html
Consumer and producer price indexes
https://www.stats.gov.cn/sj/zxfb/202411/t20241109_1957353.html
https://www.stats.gov.cn/sj/zxfb/202411/t20241109_1957352.html
Local government debt swap
http://www.npc.gov.cn/npc/c2/kgfb/202411/t20241108_440850.html
http://www.npc.gov.cn/wszb/zzzb47/
October financial statistics report
http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5502646/index.html
Event: ESG Strategies Conference: Insights for Business Transition
https://www.europeanchamber.com.cn/en/upcoming-events/26827
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 13th November 2024.
(MUSIC)
RUI: China’s exports rose in October, recording the highest year-on-year jump so far in 2024, according to data released by the General Administration of Customs on 7th November.
MARIANN: China exported more than 309 billion US dollars’ worth of goods last month, representing 12.7 per cent year-on-year growth, and far exceeding the predicted 5.2 per cent increase. Imports, on the other hand, fell to 213 billion US dollars, representing a 2.3 per cent decline year on year. Exports are expected to continue growing for the rest of the year, driven in part by efforts to rush shipments and fill inventories ahead of tariffs that are expected to be put in place by US President-elect Donald Trump’s administration.
(MUSIC)
RUI: China’s consumer price index rose just 0.3 per cent in October, the slowest pace of growth since June according to data released by the National Bureau of Statistics on 9th November.
MARIANN: The producer price index declined by 2.9 per cent in October. The last time the producer price index recorded any positive gain was in September 2022. This, coupled with the near-zero growth in the consumer price index, has renewed concerns about deflationary pressure.
(MUSIC)
RUI: On 8th November the National People’s Congress Standing Committee approved a State Council proposal aimed at addressing local governments’ hidden debt. Finance Minister Lan Fo’an outlined details of the plan, consisting of 10 trillion Chinese yuan in debt swaps, in a press conference and written statement following the Standing Committee’s decision.
MARIANN: By the end of 2023, hidden local government debt—or off-the-books debt— stood at 14.3 trillion yuan. The State Council’s plan will allow local governments to tap into six trillion yuan in new special bonds over the next three years to move hidden debt onto their balance sheets. An additional four trillion yuan in special bonds will be available for the same purpose, but over a five-year timeframe. The minister noted that the plan will not actually increase the overall government debt burden, instead lowering interest rates on existing debt and preventing ‘triangular debt’, a common form of hidden debt in which government-linked entities form a cycle of obligations to each other.
Finally, Lan noted that the plan will reduce the fiscal burden on local governments so that they can focus on the so-called ‘three guarantees’ – local government obligations, which include basic municipal services, salaries and other daily functions. The plan—which is the latest of a series of measures aimed at boosting China’s economy—is notably absent of fiscal stimulus, which many economists feel is needed to really make a difference in the long run.
(MUSIC)
RUI: The People’s Bank of China—or PBOC—released the October 2024 financial statistics report on 11th November, with data on loans further indicating the troubling state of China’s economy.
MARIANN: 16.52 trillion yuan of new loans were issued in the first ten months of year, putting the total value of new loans in October at about 500 billion yuan, far below expectations. The PBOC data casts doubt on the effectiveness of recent measures aimed at reenergising the Chinese economy, especially the housing sector. Only 160 billion yuan in new housing loans were reported for October, compared to about 500 billion yuan the month before.
(MUSIC)
RUI: Although the European Union’s Corporate Sustainability Reporting Directive—or CSRD—came into effect in the beginning of 2023, impacted companies only need to submit sustainability reports beginning in 2025. The directive is the first of several new pieces of EU regulation that will tighten environmental, social and governance—or ESG—compliance standards for companies doing business with Europe.
MARIANN: Significant challenges remain for members companies in this regard. A fifth of members reported concern about the inability to conduct independent third-party audits in the Business Confidence Survey 2024, which will form part of companies’ reporting requirements. Challenges persist in fulfilling environmental targets as well; more than 80 per cent of members reported that they rely on decarbonising energy use to achieve carbon neutrality, but limited access to renewable energy is still a widespread issue, with more than 60 per cent of companies reporting difficulties accessing the green energy they need.
RUI: Join us in Shanghai on 21st November for the ESG Strategies Conference: Insights for Business Transition, to gain valuable perspectives on emerging trends in ESG and have the opportunity to engage in meaningful discussions on topic.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Chinese Premier pledges to further open its economy;
- Official Purchasing Managers’ Index (PMI) in October;
- Caixin China General PMI in October;
- China’s installed power generation capacity by September;
Also, listeners are welcome to join an event on 12th November in Beijing to gain an exclusive insight into Brunswick’s China sentiment tracking research.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Chinese premier pledges broader opening-up for foreign-funded firms
https://english.www.gov.cn/news/202411/05/content_WS672954d0c6d0868f4e8ec95d.html
Official PMI in October
https://www.stats.gov.cn/sj/zxfb/202410/t20241031_1957214.html
https://www.stats.gov.cn/sj/sjjd/202410/t20241031_1957213.html
Caixin China General Manufacturing PMI
https://download.caixin.com/upload/CN_Manufacturing_ENG_2410_PR.pdf
China’s installed power generation capacity up 14.1 pct
https://english.www.gov.cn/archive/statistics/202410/31/content_WS67237d3ec6d0868f4e8ec7bf.html
European Chamber event: Navigating Public Sentiment to Build Consumer Trust
https://www.europeanchamber.com.cn/en/upcoming-events/26714/Navigating_Public_Sentiment_to_Build_Consumer_Trust
Transcript
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 6th November 2024.
(MUSIC)
RUI: On 4th November, during a meeting with selected companies attending the seventh China International Import Expo (CIIE), Chinese Premier Li Qiang pledged that China will continue to open its economy to foreign-funded firms.
MARIANN: Premier Li reiterated the Chinese government’s intent to ease market access and progressively open up the telecommunications, education, culture and healthcare industries. He also pledged to improve the business environment and level the playing field for government procurement, access to production factors and issuance of operating licences.
The European Chamber acknowledges China’s leadership’s reiteration of the intent to further open its economy, but also notes that this rhetoric needs to be backed by meaningful action to restore business confidence.
RUI: The seventh China International Import Expo is being held in Shanghai from 5th to 10th November. According to the organisers, this year’s expo will host nearly 3,500 exhibitors from 129 countries and regions. The 7th Hongqiao International Economic Forum is held simultaneously with the expo. This year’s forum features 19 parallel sessions on the topic of opening-up, as well as a host of closed-door meetings, including roundtables for foreign-invested enterprises.
Chamber Vice President Carlo D’Andrea was invited to speak at a sub-forum on WTO reform and China’s role in it. He pointed out that China should play an influential role in advancing WTO reform by means of expanding the country’s institutional openness and optimising its business environment. To this end, D’Andrea advocated for further improving the legal and regulatory framework, strengthening intellectual property (IP) protection, accelerating the implementation of free trade zone (FTZ) policies, and better integrating the small and medium-sized enterprises (SMEs) into the Chinese economy.
(MUSIC)
RUI: According to data released by the National Bureau of Statistics on 31st October, China’s manufacturing activity expanded for the first time after five months of contraction.
MARIANN: October’s official manufacturing purchasing managers’ index, or PMI, stood at 50.1 points, just above the 50-point benchmark separating growth from contraction. The subindex for production reached 52 points, showing an uptick in production activity. The subindex for new orders stood at 50 points, edging up only 0.1 points from the previous month, indicating slower recovery of demand.
Driven by the week-long National Holiday, the non-manufacturing PMI was up 0.2 points from the previous month, standing at 50.2 points in October. However, the accommodation and real estate business activities index remained below the 50-point benchmark.
(MUSIC)
RUI: A private survey also confirmed the recovery in China’s manufacturing activity: the Caixin China General Manufacturing PMI rose to 50.3 points in October, re-entering expansion territory after briefly contracting in September.
MARIANN: The Caixin data indicated that the recovery was primarily propelled by an improvement in domestic demand. At the same time, external demand remained subdued, however the pace of decline in new export orders slowed. Manufacturing firms taking part in the survey expressed hopes that economic conditions would improve, which, combined with R&D efforts, could help improve their sales results in the year ahead. However, the reduction of headcounts continued, with employment levels falling at the fastest rate in almost a year and a half.
(MUSIC)
RUI: According to data released by the National Energy Administration on 31st October, China’s total installed power generation capacity increased over 14 per cent from a year ago by the end of September.
MARIANN: Installed renewable energy capacity now accounts for over 54 per cent of total installed power generation capacity. In the first three quarters of 2024, renewable energy power generation was up over 20 per cent from a year ago, accounting for over one third of total power generation.
(MUSIC)
RUI: As geopolitical tensions have continued to rise and the disconnect between headquarters and China operations has intensified over the past two years, it is becoming increasingly important for multinational companies to stay abreast of global and domestic developments, as well as changes in public sentiment, in order to maintain trust between brand and consumer.
MARIANN: A recent sentiment tracking research programme covers multiple relevant themes, including Chinese public opinion on both the economic environment and multinational companies operating in China. The report sheds light on how MNCs’ in China can improve their marketing and communications strategies to enhance their trustworthiness and likeability and detect potential public relations crises.
RUI: Join us on 12th November, and gain an exclusive insight into the key findings of the report, which is not publicly available.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- EU’s definitive tariffs on battery electric vehicles imported from China;
- China’s foreign direct investment from January to September;
- Industrial profits in the first three quarters; and
- Finnish President’s official visit in China.
The September/October edition of the Chamber’s bimonthly magazine, EURObiz, is available to download from the Chamber’s website.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
EU tariffs on BEV imports from China
https://ec.europa.eu/commission/presscorner/detail/en/ip_24_5589
https://policy.trade.ec.europa.eu/news/readout-video-call-between-evp-dombrovskis-and-chinese-commerce-minister-wang-2024-10-25_en
https://www.mofcom.gov.cn/xwfb/bldhd/art/2024/art_7d36bbdf108c47fba2bd3fb2ea47ff75.html
China January-September FDI (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2024/art_911c061b76804c4f8cdfafb5fd34e367.html
China January-September industrial profits (NBS)
https://www.stats.gov.cn/sj/zxfb/202410/t20241027_1957183.html
Finnish President’s official visit in China
https://www.presidentti.fi/en/president-stubb-meets-president-of-china-xi-jinping/
https://english.www.gov.cn/news/202410/30/content_WS67216d3fc6d0868f4e8ec6b4.html
EURObiz September/October 2024
https://www.europeanchamber.com.cn/en/publications-archive/1270/EURObiz_September_October_2024
Transcript:
XINHE: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 30th October 2024.
(MUSIC)
XINHE: On 29th October, the European Union imposed definitive countervailing duties on battery electric vehicles imported from China for a period five years.
MARIANN: The tariffs, which range between 7.8 and 35.3 per cent, entered into force on 30th October, a day after their publication in the Official Journal of the EU. The decision still allows room for negotiation, with the Commission’s official press release highlighting that the EU and China are continuing to work towards finding alternative solutions.
On 25th October, European Commission Executive Vice President and Commissioner for Trade Valdis Dombrovskis held a video call with Chinese Minister of Commerce Wang Wentao to discuss outstanding issues related to the matter.
The two sides reaffirmed their commitment to finding a solution that is agreeable to both. Dombrovskis said that from the EU’s perspective this would mean a solution that is compatible with WTO rules, and effectively maintains the level playing field in the EU market. During the call, Dombrovskis expressed concerns about China’s investigations into EU brandy, pork and dairy imports, highlighting that the EU finds these probes unsubstantiated. Wang Wentao stressed that the investigations were launched at the request of Chinese domestic players in the relevant industries and are in accordance with WTO rules as well as Chinese laws.
(MUSIC)
XINHE: According to official data released by China’s Ministry of Commerce on 25th October, foreign direct investment flows into China continued to drop, with the pace of decrease accelerating at the end of the third quarter of 2024.
MARIANN: In the January-September period, China’s actual use of foreign investment totalled 640 billion yuan, over 30 per cent lower than during the same period last year. The rate of decline slightly improved from a 31.5 per cent peak recorded in the first eight months. A breakdown of the data showed that nearly 70 per cent of FDI was utilised in the services sector.
The Chamber’s Business Confidence Survey 2024 found a year-on-year increase in investments moving out of China: 13 per cent of respondents said that their company had already shifted or had taken the decision to shift existing investments elsewhere. While 65 per cent said that their company is maintaining current investments in the country, this rate stood at 58 per cent with regard to future investments. The top three beneficiaries of this trend were the Association of Southeast Asian Nations, Europe and India.
(MUSIC)
XINHE: Data published by China’s statistics bureau on 27th October showed a year-on-year fall in the cumulative profits at larger industrial firms during the first three quarters, breaking an eight-month streak of moderate growth.
MARIANN: Profits at large industrial companies in China dropped 3.5 per cent in the January-September period, compared to the first three quarters of last year. Notably, annual industrial profits have been in decline for the second year running in 2023.
The Chamber’s Business Confidence Survey 2024 indicated that macroeconomic and demand factors both had a significant negative impact on over a quarter of respondents’ net profit margins in China in 2023. With concerns over China’s economic slowdown weighing heavily on company outlooks, respondents’ expectations for their profitability in China over the upcoming two years were the gloomiest on record, with almost half of respondents expressing pessimism in this regard.
(MUSIC)
XINHE: Finnish President Alexander Stubb held talks with Chinese President Xi Jinping and Chinese Premier Li Qiang during his official visit in Beijing on 29th October.
MARIANN: According to a press release from Finnish President’s office, the discussions between the two presidents primarily focussed on security policy issues, including the war in Ukraine, as well as issues related to bilateral and trade relations, climate change and the environment. The two sides renewed their Joint Action Plan, which forms the basis of their bilateral relationship for the period between 2025 and 2029. During the state visit, the two sides signed several trade agreements and documents on bilateral cooperation, including in the areas of education, water resources and environmental protection. China also extended its visa-free trial programme for Finnish passport holders during the visit.
(MUSIC)
XINHE: Foreign companies operating in China face a range of human resource issues when operating their businesses. The September/October edition of the Chamber’s bimonthly magazine EURObiz, explores some of the biggest HR headaches faced by companies and some possible approaches to tackling them.
MARIANN: The latest edition also contains articles introducing the key takeaways of the Chamber’s recently published Position Paper 2024/2025 and explaining China’s new Company Law.
XINHE: You can download the magazine for free from the Chamber’s website.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s GDP growth in the third quarter of 2024;
- the five-year loan prime rate (LPR) cut to stabilise property market;
- guidelines to address late or missed payments of government funds to enterprises;
- new regulation on export controls; and
- opinions on improving the quality of post-graduate education.
Also, listeners are invited to join the EU-China Green Development Forum: Green Power Consumption and International Recognition on 28th October in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
GDP growth
https://www.stats.gov.cn/english/PressRelease/202410/t20241018_1957042.html
https://www.europeanchamber.com.cn/en/publicationsarchive/1177/Business_Confidence_Survey_2024
LPR cut
http://www.pbc.gov.cn/zhengcehuobisi/125207/125213/125440/3876551/5482244/index.html
http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5481367/index.html
Payment delinquency
https://english.www.gov.cn/policies/latestreleases/202410/19/content_WS6712e941c6d0868f4e8ec12b.html?utm_source=substack&utm_medium=email
Export controls
https://www.gov.cn/zhengce/content/202410/content_6981399.htm
Postgraduate education and talent acquisition
https://www.gov.cn/yaowen/liebiao/202410/content_6981721.htm
https://www.europeanchamber.com.cn/en/publications-archive/1269/European_Business_in_China_Position_Paper_2024_2025
EU-China Green Development Forum
https://www.europeanchamber.com.cn/en/upcoming-events/26740
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 23rd October 2024.
(MUSIC)
RUI: On 18th October, the National Bureau of Statistics reported 4.6 per cent year-on-year GDP growth for the third quarter of this year, the lowest number reported since the first quarter of 2023.
MARIANN: The figure—despite beating expectations of 4.5 per cent—is not high enough to ensure that China meets this year’s growth target of ‘around five per cent.’ The economy grew 4.8 per cent during the first nine months of 2024, but lacklustre performance in the third quarter further highlights the importance of introducing measures that can reverse this trend before the end of the year. Whether the recently announced stimulus package will be successful in doing so is yet to be seen.
More than half of European Chamber members reported in the Business Confidence Survey 2024 that China’s economic slowdown is the top business challenge that they face. The European Chamber believes that while the GDP target of ‘around five per cent’ is not unachievable, it is important for China’s policymakers to focus on sustainable growth: success should be measured not just by whether the target is met, but also how it is met.
(MUSIC)
RUI: On 21st October, the People’s Bank of China announced a cut to the five-year loan prime rate—or LPR—a move that is intended to help stabilise China’s property market.
MARIANN: The five-year LPR is a key benchmark rate for home loans, meaning that with a lower rate borrowers will pay less each month. The rate cut was first disclosed last week by central bank Governor Pan Gongsheng, who said that, together with the other interest rate adjustments announced earlier in the month, the LPR cut will save 50 million families 150 billion Chinese yuan (CNY) collectively over the course of one year. This works out to impacted households saving an average of 3,000 yuan per year. However, it is not clear what impact this will have on China’s real economy, especially without the support of fiscal policy measures.
(MUSIC)
RUI: In an effort to address the prevalence of late or missed payments of government funds to companies, the Communist Party of China’s Central Committee and the State Council released guidelines with stricter standards on spending government funds.
MARIANN: The announcement, made on 18th October, outlines the need for more oversight of government procurement payments, including ensuring the availability of required funding for projects. It also calls for the establishment of a national platform for small and medium-sized enterprises to submit complaints about delinquent payments, and for the expansion of a punishment mechanism for bad faith actors.
(MUSIC)
RUI: The State Council announced a new regulation on export controls for dual-use items on 19th October, which will come into effect on 1st December.
MARIANN: The regulation specifically targets goods and technologies that have both military and civilian purposes, and falls under the framework of China’s Export Control Law. Companies exporting restricted goods will have to report both the end user of the goods and how the goods will be used in order to receive export clearance, which will add to an additional compliance burden for some businesses. Nearly a quarter of Chamber members reported that they expect to be impacted by US export controls in the Business Confidence Survey 2024. While the impact of China’s new export control regime will likely affect comparatively fewer companies in the near-term, its scope is expected to be expanded in the coming years.
(MUSIC)
RUI: On 20th October, the Communist Party of China’s Central Committee and the State Council released opinions on improving the quality of post-graduate education, especially in key science and technology fields.
MARIANN: Areas such as medicine and engineering are in the spotlight of the push, which aims to make China a centre of global talent development. As outlined in the European Chamber’s Position Paper 2024/2025, its members have been facing increasing difficulties attracting talent. Many members report that while Chinese graduates tend to be well-educated, many lack the practical skills required in the workplace. The State Council’s 24 Measures—released in August 2023—contain a point on promoting vocational schools, but members report that little action has been taken so far, meaning that hiring highly skilled workers is still very challenging in some sectors.
(MUSIC)
RUI: Green energy access remains a key advocacy priority for Chamber members – with 82 per cent of Business Confidence Survey 2024 respondents reporting that decarbonising energy use is their primary strategy for achieving carbon neutrality.
MARIANN: More than 60 per cent of respondents reported that limited access to renewable energy is a top three barrier to achieving their carbon neutrality goals, highlighting the urgent need for China to improve green energy access to continue attracting foreign investors.
RUI: Join us on 28th October for the EU-China Green Development Forum in Beijing. Experts and key government stakeholders will discuss policy updates, green power supply for foreign-invested enterprises, and green energy certificates among other topics related to green energy.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Fiscal policy measures to boost the economy;
- Foreign trade data in September;
- Consumer and Producer Price indices in September; and
- Draft law on private sector promotion.
From the Chamber’s side, President Jens Eskelund and Vice President Stefan Bernhart visited key stakeholders in Brussels from 8th to 10th October.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Fiscal support measures
https://english.www.gov.cn/news/202410/12/content_WS670a0d75c6d0868f4e8ebc0f.html
China foreign trade data, September (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6148735/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6149154/index.html
China PPI, CPI, September (NBS)
https://www.stats.gov.cn/sj/sjjd/202410/t20241013_1956897.html
Draft law on private sector promotion
http://en.moj.gov.cn/2024-10/11/c_1031232.htm
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 16th October 2024.
(MUSIC)
RUI: At a press conference held on 12th October, China’s Ministry of Finance announced a series of fiscal policy measures aimed at boosting the economy.
MARIANN: Without disclosing any concrete figures, the ministry said that the government will significantly increase the debt ceiling to ease pressure on local governments. Special treasury bonds will also be issued to inject capital into large state-owned commercial banks and enhance their lending capacity. Increased support for targeted groups was also announced, such as enhancing financial aid for college students. China’s Finance Minister Lan Fo’an hinted at the possibility of additional fiscal measures, noting that other tools are currently being looked at.
(MUSIC)
RUI: Data released by China’s customs authority on 14th October showed that the year-on-year increase of the country’s exports slowed to the lowest rate in five months in September, with import growth also hitting a three-month low.
MARIANN: In US dollar terms, the total value of China’s exports rose 2.4 per cent compared to the same period last year. In September, the United States was China’s largest export market, followed by the Association of Southeast Asian Nations, or ASEAN, and the European Union. The total value of imports inched up 0.3 per cent year-on-year in September, with ASEAN ending the month as the largest source of imports to China’s mainland, followed by the EU and Taiwan.
(MUSIC)
RUI: China’s producer prices fell at the fastest pace recorded in the past half year, while the rise in consumer prices slowed in September, according to data from the National Bureau of Statistics published on 13th October.
MARIANN: The producer price index dropped 2.8 per cent compared to the same period last year. The year-on-year comparison of the prices producers in China charge at the factory gate has been showing a decline every month since October 2022. While readings in recent months had indicated a slowdown in price decreases, the year-on-year decline has accelerated since August. The National Bureau of Statistics attributed the fall in producer prices to both lower international commodity prices and insufficient domestic demand.
Consumer prices edged up 0.4 per cent in September, with the rate of increase slightly less than the previous two months.
(MUSIC)
RUI: On 10th October, China’s Ministry of Justice released a draft law on private sector promotion to solicit public feedback.
MARIANN: The stated aim of the draft law is to ensure that private businesses can participate and compete in the China market on a fair basis. It contains provisions on improving the overall environment for private investment, improving support for technological innovation in the private sector, and strengthening the protection of the rights and interests of private companies.
The Chamber noted that certain provisions included in the draft law may address some of its member concerns related to market access and regulatory barriers. One example is the provision calling for increased transparency and fairness in public procurement. However, the lack of detail in the draft means that it is too early to determine its potential impact.
(MUSIC)
RUI: European Chamber President Jens Eskelund and Vice President Stefan Bernhart visited key stakeholders in Brussels last week. The three-day visit included meetings with European External Action Service Secretary General Stefano Sannino and DG Grow Director-General Kerstin Jorna. They also met with the China Chamber of Commerce to the EU’s Chairman Liu Jiandong and Secretary General Fang Dongkui.
MARIANN: During the meetings, President Eskelund presented the European Business in China Position Paper 2024/2025. The report focuses on the urgent need for the Chinese authorities to follow through on reform pledges announced in the past year, with business confidence now at an all-time low.
RUI: President Eskelund and Vice President Bernhart emphasised the importance of achieving a level playing field for European businesses in China as a prerequisite for the EU and China to build a more equitable relationship. Meeting discussions also focussed on China’s economy and the state of EU-China relations.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- EU tariffs on electric vehicles imported from China;
- Anti-dumping measures against EU brandy;
- Policies to stabilise the economy and boost investment; and
- Official purchasing managers’ index in September.
Also, listeners are invited to join an event on 18th October with Dr Pascale Massot on her new book China’s Vulnerability Paradox: How the World’s Largest Consumer Transformed Global Commodity Markets.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
EU tariffs on Chinese EVs
https://ec.europa.eu/commission/presscorner/api/files/document/print/en/statement_24_5041/STATEMENT_24_5041_EN.pdf
Anti-dumping measures against EU brandy
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2024/art_5bf8cf04b4fe495dbdcae9f0d03fcb94.html
Policies to stabilise the economy and boost investment
https://english.www.gov.cn/news/202410/08/content_WS6704d29dc6d0868f4e8eb91c.html
China Official PMIs, September (NBS)
https://www.stats.gov.cn/sj/zxfb/202409/t20240930_1956798.html
European Chamber event: Insight China Expert Talk – Navigating Vulnerability: China’s Role in Global Commodity Markets
https://www.europeanchamber.com.cn/en/upcoming-events/26688/_Hybrid_Insight_China_Navigating_Vulnerability_China_s_Role_in_Global_Commodity_Markets
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 9th October 2024.
(MUSIC)
RUI: On 4th October, EU Member States voted on whether to confirm tariffs on electric vehicles or EVs being exported from China to the EU. In the absence of a qualified majority in opposition, the tariffs were approved. An implementing regulation that includes the definitive findings of the Commission’s investigation will be published by 30th October, but the EU and China will continue to work on an alternative solution before that date.
MARIANN: The EU’s tariffs are intended to prevent companies that obtained subsidies in China not available to their competitors from gaining an unfair advantage in the EU’s single market, and target both Chinese and foreign-invested EV makers in China.
The European Chamber continues to believe that dialogue is the preferred avenue for resolving trade disputes. Our understanding is that the EU’s investigation and the application of tariffs has been carried out in compliance with WTO rules.
The relationship between Europe and China has created immense value in the past and has significant potential for future value creation. As such, the Chamber supports the EU and China to consider a negotiated solution with a view to ensuring a level-playing field in the relationship and addressing imbalances.
(MUSIC)
RUI: On 8th October, China’s Ministry of Commerce announced that starting from 11th October it will impose anti-dumping measures on brandy imported from the EU.
MARIANN: After the newly announced measures take effect, importers of EU brandy will be obliged to put down a security deposit ranging from 30.6 to 39 per cent of the products’ import value. The measures are being put in place following an anti-dumping investigation into EU brandy imports that was initiated in January.
European Chamber members were disappointed by the announcement. This action runs contrary to bilateral progress made in the food and beverage sector, as exemplified by the signing of the EU-China Geographical Indications Agreement, one of the few bright spots in the EU-China relationship in recent years.
(MUSIC)
RUI: On 8th October, during a symposium of the Politburo Standing Committee, Chinese Premier Li Qiang urged that policies to stabilise the economy are implemented promptly. On the same day, the National Development and Reform Commission announced it would expedite investment plans originally set for 2025 to boost investment and economic growth.
MARIANN: Li Qiang stressed the need to speed up the implementation of policies that have already been introduced while also accelerating the formulation of policies that are currently being studied.
The Chamber recently published its Position Paper 2024/2025, focussing on the urgent need for the Chinese authorities to follow through on reform pledges announced in the past year.
The NDRC said it would allocate two hundred billion yuan in advance from next year’s budget to spur investment. Specific to foreign businesses, the Commission said the catalogue of industries open to foreign investment will be expanded further, and new foreign-invested projects will be introduced.
(MUSIC)
RUI: According to data released by the National Bureau of Statistics on 30th September, China’s manufacturing activity contracted for the fifth month in a row in September, as demand still has not caught up with supply.
MARIANN: The official manufacturing purchasing managers’ index or PMI stood at 49.8 points, just below the 50-point benchmark separating growth form contraction. This was the strongest reading since April. While the subindex for new orders rose from the previous month, it still fell short of reaching 50 points. At the same time, production rebounded and increased at the sharpest rate in five months.
The non-manufacturing PMI sank to the lowest level recorded since March, standing exactly at 50 points in September. This was in no small part due to a contraction in services activity, which ended an eight-month long sequence of uninterrupted – albeit relatively modest – growth. Subindexes for new orders and employment were both weighing down on overall activity, dropping at sharp rates both in the services and in the construction sectors.
(MUSIC)
RUI: In today’s global economic landscape, China’s economic influence is becoming increasingly prominent. However, despite significant achievements in various sectors, China also exhibits vulnerabilities towards global commodity markets.
MARIANN: These vulnerabilities are linked to several historical factors, including the continued reliance on imports for most commodities, China’s late arrival on the global marketplace, and the unequal distribution of power in some markets.
RUI: Join us on 18th October for the upcoming session of our Insight China Expert Talk series, where our guest speaker Dr Pascale Massot, who will introduce the key findings of her recent book China’s Vulnerability Paradox: How the World’s Largest Consumer Transformed Global Commodity Markets.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode covers segments on:
- Position Paper launch in Shanghai with Chamber representatives’ recommendations to companies and Chinese authorities; and
- New stimulus measures to support the financial, property and capital markets.
Also, listeners are invited to join an event in Shanghai on 14th October to hear compliance advice on the European Union’s Corporate Sustainability Due Diligence Directive.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Chamber report: European Business in China Position Paper 2024/2025
https://www.europeanchamber.com.cn/en/publications-position-paper
New stimulus measures to support the financial, property and capital markets
https://english.www.gov.cn/news/202409/25/content_WS66f3602ec6d0868f4e8eb3c0.html
European Chamber event: Unpacking CSDDD: Getting Off To a Good Start With Compliance
https://www.europeanchamber.com.cn/en/upcoming-events/26662/Unpacking_CSDDD_Getting_off_to_a_Good_Start_with_Compliance
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 23rd September, the European Business in China Position Paper 2024/2025 was launched in the European Chamber’s Shanghai Chapter. The Position Paper is the European Chamber’s most important publication, and the cornerstone of its annual advocacy plan. The report, which is available to download for free on the Chamber’s website, is a culmination of six months dedicated work by our 50 working groups, sub-working groups, desks and fora.
MARIANN: This year’s paper focuses on the urgent need for the Chinese authorities to follow through on reform pledges announced in the past year, with business confidence now at an all-time low. It details the challenges faced by European companies operating in China and provides more than 1,000 constructive recommendations to the Chinese Government on how they can be resolved. In short, it provides a blueprint for rebuilding business confidence in the Chinese market and restoring it as the preferred destination for global investment.
RUI: We asked the Chamber’s representatives who spoke at the Shanghai launch event to share their views on how European companies can best adapt to China’s changing business landscape, and what steps the government could take to boost investor confidence.
MARIANN: Carlo D’Andrea, vice president of the European Chamber and chair of its Shanghai Chapter, highlighted the need for European businesses to adapt to the increasing competition they face in the Chinese market.
CARLO D’ANDREA: European businesses should come to the realisation that they can no longer conduct business the way they did before Covid. Now, the China market requires you to invest more, put all your effort and passion into driving the business and be prepared to work times harder to stay on top of the competition here.
RUI: Erin Xu, vice chair of the Chamber’s Environment Working Group urged European companies to take part in standards setting to ensure consistency between Chinese and international standards.
ERIN XU: To cope with the fast-changing policy landscape, European companies in China should make greater use of the coalition forces to engage in policy work to avoid standards conflicts between their Chinese market and their global market.
MARIANN: Alexander Prautzsch, chair of the Chamber’s Finance and Taxation Working Group, called for the urgent implementation of already existing pledges to improve the business environment for foreign companies.
ALEXANDER PRAUTZSCH: If comparing the business confidence of European companies in the past with today, the key topic is trust in the Chinese development and the role of European companies in a China of level playing field. Rebuilding such trust, however, can only be achieved through a combination of multiple measures and it will take time. In that regard, the Opinions issued by the state Council on 13th August 2023 are a welcome multi-measure programme. So it will be key to proactively implement the spirit of these measures now and send out this message.
RUI: Sara Marchetta, chair of the Chamber’s Legal Working Group, pointed out that discontinuing the practice of differentiating between foreign and domestic investors in the legal system would help dispel some concerns about investing in China.
SARA MARCHETTA: The one recommendation for the Chinese government would be to finally drop the differentiation between foreign and domestic investors. When you have a differentiation in the legal system between different investors, this becomes very often in the implementation process a cause for discrimination, which makes foreign investors very uncomfortable.
(MUSIC)
RUI: On 24th September, China’s central bank announced a series of support measures to boost the financial, property and capital markets.
MARIANN: To deploy more liquidity available for lending, the People’s Bank of China will lower the reserve requirement ratio for banks by 0.5 percentage points, and will consider a further cut within the year if necessary. Mortgage rates on existing home loans will also be lowered in the hope that easing the burden on households could help boost consumption and investment. Meanwhile, the central bank will develop new monetary policies to aid the stable development of the stock market.
(MUSIC)
RUI: The European Union’s Corporate Sustainability Due Diligence Directive, or CSDDD, entered into force on 25th July, representing a significant development for EU sustainability regulation.
MARIANN: It mandates certain large companies operating in the EU to conduct risk-based human rights and environmental due diligence. Additionally, it will indirectly impact numerous SMEs that supply these larger companies as a result of the trickle-down effect.
RUI: Join us in Shanghai on 14th October to hear experts’ advice about the key steps your company should take in preparation for the phased implementation of the directive. This event is exclusively available to our members. Please visit our website to find out how your company can become our member.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in next week.
RUI: In the meantime, please find useful links in the episode notes.
On 11th September, the Chamber published its European Business in China Position Paper 2024/2025. In this special edition, we have asked the panellists that attended the Position Paper launch to share their one key recommendation that, if acted on, would significantly improve the business environment for European firms in China. Speakers include European Chamber’s President Jens Eskelund, Vice President Stefan Bernhart, States’ Representative Peter Ling-Vannerus, and Board Member Ninette Dodoo.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Chamber report: European Business in China Position Paper 2024/2025
https://www.europeanchamber.com.cn/en/publications-position-paper
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 11th September, the Chamber published its European Business in China Position Paper 2024/2025. The report focusses on the urgent need for the Chinese authorities to follow through on reform pledges announced in the past year, with business confidence now at an all-time low.
MARIANN: For today’s special edition of the China ShortCuts podcast, we have asked the panellists that attended the Position Paper launch to share their one key recommendation that, if acted on, would significantly improve the business environment for European firms in China.
MARIANN: Chamber President Jens Eskelund highlighted the importance of the timely implementation of the Chinese Government’s existing pledges.
JENS: We believe the time for action is now, and one concrete step that the government could take would be to fully and across all dimensions implement the 24 measures that were announced on 13th August 2023. A full implementation in its entirety of these measures would significantly increase the confidence of the foreign business community in China and also allow us to give full play to the potential we have to contribute to development in China.
MARIANN: Chamber Vice President Stefan Bernhart called for the establishment of a green channel for cross-border data transfers.
STEFAN: My key recommendation is to create a green channel for data that really solves the problem of European companies to transfer data abroad to their headquarters and also to their R&D operations, because the exchange of data that is business-essential is important for European companies in order to successfully run their business here in China.
MARIANN: Ninette Dodoo, board member of the Chamber’s Executive Committee explained how addressing the issue of regulatory uncertainty would contribute to boosting investor confidence.
NINETTE: I think there is a real need for regulatory clarity. Regulatory clarity brings predictability, transparency, fairness to businesses. I think this is really what businesses are seeking to have to incentivise them, to give them encouragement in continuing to invest in China.
MARIANN: Peter Ling-Vannerus, board member of the Chamber’s Executive Committee urged for European banks to be granted access to the central bank’s green financing facilities.
PETER: Well, working in the financial sector, cybersecurity and cross-border data transfer is very important, but I know several of my colleagues have already spoken about that. So, for us being a branch, which many of the European banks are, we would like to have access to the facilities for green financing, that the PBOC, the People’s Bank of China, is providing. I think that would be a gamechanger. We, as many European banks, are very active in the green financing space, and access to subsidised financing is of course key for us to be able to support our European clients, our European companies as they are investing in green solutions, whether it be wind power, solar, or any other way that they might be improving their production facilities, certifying their buildings, and we are there to support them with attractive financing, which would be even better if we had access to the subsidised rates.
RUI: To learn more about the challenges faced by European companies in China and the Chamber’s recommendations to the Chinese Government, read our latest report, which is now available to download for free on the Chamber’s website.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- The EU-China Cross-Border Data Flow Communication Mechanism launch;
- August data released for China’s official Purchasing Managers’ Index; and
- Preliminary ruling in the anti-dumping probe of EU brandy imports.
Also, listeners are invited to join the launch of the European Business in China Position Paper 2024/2025 on 11th September in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Launch of EU-China Cross-Border Data Flow Communication Mechanism
https://policy.trade.ec.europa.eu/news/eu-and-china-launch-cross-border-data-flow-communication-mechanism-2024-08-28_en
China Official PMIs, August (NBS)
https://www.stats.gov.cn/sj/zxfb/202408/t20240831_1956161.html
Preliminary Ruling in the Anti-dumping Probe of EU Brandy Imports (MOFCOM)
https://www.mofcom.gov.cn/zcfb/blgg/art/2024/art_c2fc8bc957cf4d028cd91fb6adc803cc.html
European Chamber event: Launch of The European Business in China Position Paper 2024/2025
European Business in China Position Paper 2024/2025 (europeanchamber.com.cn)
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 4th September 2024.
(MUSIC)
RUI: On 27th August, the European Union and China launched a new mechanism, which is aimed at facilitating cross-border flows of non-personal data for European companies operating in China.
MARIANN: The mechanism was set up following agreements reached at the 2023 EU-China High-Level Dialogue and the EU-China High-Level Economic and Trade Dialogue. At the inaugural meeting held on 27th August, Sabine Weyand, director-general of the European Commission’s Directorate-General for Trade, stressed that the EU’s objective is to address European businesses’ concrete concerns regarding cross-border data transfers.
RUI: Commenting on the launch of the new mechanism is Ma Xiaowen, chair of the European Chamber’s Cybersecurity Sub-working Group.
MA XIAOWEN: As we can see from the official announcements, the communication mechanism focusses on the cross-border transfer of non-personal data, which is a type of data that could have close business relevance. This indicates that cross-border data flows are viewed here not from a privacy protection angle but from a trade angle, which is why on the EU side, DG Trade is taking the lead. We hope that through the mechanism there could be further clarification on the scope of the so-called ‘important data’ and on the related transfer restrictions which should be defined as narrowly as possible. It could also be helpful to have a holistic understanding about the interplay between all the national, sectoral and local rules, which are leading to a quite dynamic compliance landscape. I feel that this kind of near-term guidance would be very welcome, as companies are trying to move forward with their product and investment decisions. And then, of course, in the long run, we also look forward to more synergies and areas of cooperation being identified by the two sides.
(MUSIC)
RUI: According to official data released by China’s statistics bureau on 31st August, manufacturing activity in the country continued to drop. Services and construction stayed in expansion territory, but only achieved mild growth.
MARIANN: The official manufacturing purchasing managers’ index, or PMI, sank to 49.1 points in August. This was the lowest level since February, and marked the fourth consecutive month of the reading staying below the 50-point benchmark that separates growth from contraction. Subindices for production and new orders both showed a further dip, with demand contracting at the faster pace. A breakdown of the data by company size revealed that large manufacturing firms were still able to maintain growth, while contraction accelerated at both small and medium-sized companies.
The non-manufacturing PMI, which reflects activity in the services and construction sectors, indicated a slight acceleration in growth. Expansion was most notable in the rail and air transportation, postal, telecommunications and broadcasting, cultural, sports and entertainment services sectors.
(MUSIC)
RUI: On 29th August, China’s Ministry of Commerce disclosed its preliminary ruling in its anti-dumping investigation into brandy imported from the European Union. The probe found that there was evidence that dumping had taken place. However, the Ministry announced that it would not introduce provisional anti-dumping measures for the time being.
MARIANN: The preliminary assessment stated that brandy imported from the EU was sold at a dumping margin ranging from 30.6 to 39 per cent. The probe was launched early January. The Ministry of Commerce stated that they started the investigation following complaints from the Chinese brandy industry. However, the move was widely seen as a response in kind, since the probe was launched shortly after the EU’s anti-subsidy investigation into battery electric vehicles imported from China.
(MUSIC)
RUI: While doing business in China has never been easy, companies previously viewed the complex challenges they encountered as the ‘growing pains’ of an emerging market. However, with the risks of doing business increasing and the rewards decreasing, many investors are now confronted with the reality that their approach to the China market may require a strategic rethink.
MARIANN: There have been positive signals that China intends to address some of the challenges faced by foreign enterprises. A most notable example was the State Council’s Opinions on Further Optimising the Foreign Investment Environment and Increasing the Attraction of Foreign Investment, which was issued in August 2023. However, one year on, little to no progress has been made on the implementation of key points contained in the document.
RUI: Join us on 11th September, for the launch of the European Chamber’s annual Position Paper, the culmination of six months dedicated work by our 50 working groups, sub-working groups, desks and fora. The paper, which forms the cornerstone of the Chamber’s advocacy actions, details the challenges faced by European companies operating in China and provides more than 1,000 constructive recommendations to the Chinese Government on how they can be resolved.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Shanghai’s plan in extending policies trialled in free trade zones to new innovation zones;
- China’s anti-subsidy probe into EU dairy products;
- Industrial profits from January to July;
- Budget spending and revenues generated through land sales from January to July.
Also, listeners are invited to attend the event on 4th September online or in person in Beijing on China’s economic prospects and potential opportunities for businesses.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Notice on the Issuance of Construction Plan of the First Batch of Innovation Zones in Shanghai
https://www.shanghai.gov.cn/gwk/search/content/6e3bd073c9c14bf98960754261bd0b26
MOFCOM’s announcement of anti-subsidy probe into EU dairy products
https://trb.mofcom.gov.cn/myjjdc/art/2024/art_77edd59bb5a94b76b349a4c0ad46f4c8.html?s=31
China industrial profits, January-July (NBS)
https://www.stats.gov.cn/sj/zxfb/202408/t20240827_1956106.html
China’s budget spending and revenues, January-July (Bloomberg, MOF)
https://www.bloomberg.com/news/articles/2024-08-26/china-s-budget-spending-shrinks-as-land-sales-suffer-record-fall
https://gks.mof.gov.cn/tongjishuju/202408/t20240826_3942479.htm
European Chamber event: China’s Economic Momentum: Trends and Opportunities for FIEs?
https://www.europeanchamber.com.cn/en/upcoming-events/26500/_Hybrid_China_s_Economic_Momentum_Trends_and_Opportunities_for_FIEs_
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 28th August 2024.
(MUSIC)
RUI: On 21st August, the Shanghai Municipal Government issued a Notice containing seven plans for constructing a system of innovation zones in the city’s different areas. The measures detailed in the plans offer a framework for the future development of these areas.
MARIANN: The Notice introduces the creation of innovation zones across multiple districts of the city, and highlights that this is just a first batch of plans issued for this purpose. The measures listed in each plan suggest that some of the policies trialled in Shanghai’s free trade zones will be extended to the new innovation zones too.
RUI: The Chamber’s Shanghai Chapter noted that many topics mentioned in the Notice are in line with the key issues that the Chapter focusses on in its advocacy activities. These include the development of guidelines for cross-border data flow, the promotion of services for foreign talent, and the optimisation of cross-broader travel for foreigners.
Also, the sectors listed in the Notice, such as healthcare, financial services, maritime trade and green development are highly relevant to the development of European businesses in Shanghai.
(MUSIC)
RUI: On 21st August, China’s Ministry of Commerce announced a probe into subsidies provided to dairy producers in the European Union. The ministry cited twenty subsidy programs that the investigation would focus on. The subsidy programs include some offered by the EU as well as some provided in certain member states.
MARIANN: The announcement came just one day after the European Commission disclosed its definitive findings in its anti-subsidy probe into battery electric vehicles imported from China. Regrettably, the use of trade defence instruments by one government is increasingly being responded to in kind by the recipient government. The EU is also currently reviewing the support China is granting for wind turbine producers, while China has launched anti-dumping investigations into EU brandy and pork products.
(MUSIC)
RUI: On 27th August, China’s National Bureau of Statistics disclosed that during the first seven months of this year, profits at larger industrial firms increased 3.6 per cent year-on-year.
MARIANN: The rate of growth in profits showed mild acceleration from the previous two months. The year-on-year growth in July alone was 4.1 per cent. In the January-July period, out of the three industries of mining, manufacturing and utilities, profits rose the most among utilities providers, surging over 20 per cent. Manufacturing firms saw an average profit growth of 5 per cent, while mining companies’ profits fell 9.5 per cent compared to the same period last year.
(MUSIC)
RUI: On 26th August, Bloomberg reported that in the first seven months of 2024, China’s budget spending and income generated through land sales both fell at a record pace.
MARIANN: According to Bloomberg’s calculations based on data released on the same day by China’s Ministry of Finance, combined spending in the general budget and the government fund account was about 19.7 trillion yuan. This was about 2 per cent lower than in the same period last year. The paper attributed this fall to a 8.9 per cent fall in land-related expenditure, as revenues from land sales in July dropped over 40 per cent year-on-year – the sharpest decrease since 2016. Combined revenue of the two budget accounts stood at 15.9 trillion yuan in the January-July period, dropping 5.3 per cent year-on-year. The country’s budget deficit was 3.8 trillion yuan, about 15 per cent up from the same period last year.
(MUSIC)
RUI: While China’s economy showed some signs of recovery in the first half of 2024, it is still facing many headwinds, including weak domestic consumption and a continuing property slump.
MARIANN: In light of these issues, meeting China’s growth target for 2024 could prove challenging.
RUI: Join us on 4th September online or in person in Beijing, to hear experts and business representatives delve into China’s economic prospects, analyse policy shifts following the Third Plenary Session and identify potential opportunities for foreign businesses in China.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s actual use of foreign direct investment from January to July;
- China macroeconomic indexes in July;
- 2024 negative list for foreign investment access and measures to reach 2024 economic targets;
- European Commission’s draft definitive findings in anti-subsidy probe into battery electric vehicles imported from China.
Also, listeners are invited to attend the HR training for building a diverse and inclusive team on 29th August online or in person in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China January-July FDI (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2024/art_d8476a0f316349d1b4dac2a2e12fe03a.html
China macroeconomic indexes, July (NBS)
https://www.stats.gov.cn/sj/zxfb/202408/t20240815_1955981.html
https://www.stats.gov.cn/sj/zxfb/202408/t20240815_1955984.html
State Council meetings
https://english.www.gov.cn/news/202408/20/content_WS66c3d39ac6d0868f4e8ea107.html
https://english.www.gov.cn/news/202408/16/content_WS66bf4569c6d0868f4e8e9fdc.html
European Commission draft definitive findings in anti-subsidy probe into BEVs imported from China
https://ec.europa.eu/commission/presscorner/detail/en/ip_24_4301
https://www.mofcom.gov.cn/xwfb/xwfyrth/art/2024/art_0d8d113e1e414bcabfaa3f29636c49a3.html
https://www.mofcom.gov.cn/xwfb/xwfyrth/art/2024/art_0d8d113e1e414bcabfaa3f29636c49a3.html
European Chamber event: HR Training for Building a Diverse and Inclusive Team
https://www.europeanchamber.com.cn/en/upcoming-events/26348/
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 21st August 2024.
(MUSIC)
RUI: On 16th August, China’s Ministry of Commerce released the latest data on the country’s actual use of foreign direct investment. It showed that China’s total utilisation of FDI in the first seven months of 2024 dropped 29.6 per cent from a year ago.
MARIANN: China’s actual use of FDI in the January-July period totalled nearly 540 billion yuan. While foreign investment in the country dropped in overall value, the ministry’s data showed that the number of newly-established foreign-invested firms in the country surpassed 31 thousand, up 11.4 per cent year-on-year. A breakdown of the utilisation of FDI indicated that compared to the same period last year, slightly more foreign investment was channelled into manufacturing. The year-on-year increase was especially significant in the medical devices and the computer and office equipment manufacturing sectors. However, the ministry did not provide the actual FDI figures for these areas.
(MUSIC)
RUI: On 15th August, China’s National Bureau of Statistics published a series of macroeconomic data for July, which indicated mixed economic activity.
MARIANN:
Industrial production grew 5.1 per cent year-on-year. This was the lowest rate of increase recorded since March, and below the 5.9 per cent average growth rate of the first seven months of 2024. Production expanded in 33 out of the 41 sectors surveyed by the statistics bureau. Examples of industries where production dropped from the same period last year include several sectors related to construction, such as cement and crude steel. Weighing on the construction sector is China’s ongoing real estate slump. In the first seven months of 2024, investment into real estate development fell 10.2 per cent year-on-year.
The total value of retail sales increased 2.7 per cent year-on-year. This was slightly above the June growth rate, but in absolute terms, the total value of retail sales in July was the lowest recorded since April. This was primarily due to relatively subdued sales of goods, which contributed close to 90 per cent of total retail sales.
The surveyed urban unemployment rate stood at 5.2 per cent in July, which was the highest level since March.
(MUSIC)
RUI: On 19th August, the State Council approved the 2024 negative list for foreign investment access, which is to abolish restrictions on foreign investment in the manufacturing sector.
MARIANN: The document is also aimed at the further opening of sectors including telecommunications, education and health services. The executive meeting held on Monday came only three days after the State Council’s fifth plenary meeting, during which Chinese policymakers vowed to implement measures to reach this year’s economic targets. They listed expanding domestic demand, supporting private investment and attracting foreign investments among the key areas where further efforts are needed. Chinese Premier Li Qiang, who was chairing the meeting, also stressed the importance of listening to businesses feedback and addressing the challenges they face.
(MUSIC)
RUI: On 20th August, the European Commission disclosed a draft of its definitive findings in its ongoing anti-subsidy probe into battery electric vehicles imported from China.
MARIANN: The draft contains adjusted duty rates, ranging from 9 to 36.3 per cent. These were revised based on new findings of the investigation and comments sent by interested parties. The Commission also stated that it would not retroactively collect countervailing duties. Affected companies have ten days to request hearings and provide comments, after which member states will vote on the Commission’s proposal. Reacting to the Commission’s decision, China’s Ministry of Commerce said that since the end of June, China and the EU had conducted more than 10 rounds of technical consultation, and the Chinese government and industry players provided tens of thousands of pages of legal documents and other evidence. The Ministry accused the European Commission of disregarding some of the opinions put forward by the Chinese side in its final decision.
(MUSIC)
RUI: Multiple research studies show that diverse teams bring many benefits to organisations. Companies that build their teams on the foundations of diversity and inclusion create an advantage for themselves, as people from different groups—be it age, nationality or gender—offer a broader scope of perspectives when looking at a problem.
MARIANN: Overcoming unconscious bias is key to building an inclusive team. It requires team members to deepen their self-awareness, acknowledge their unconscious biases, and develop strategies to address them.
RUI: Join our training on 29th August, to learn about the different types of unconscious biases, find out how they can influence both individual development and teamwork, and how you can manage them.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s new guideline on green transition;
- Foreign trade data in July;
- Consumer and producer prices in July; and
- Rhodium Group & Atlantic Council’s China Pathfinder Q2 2024 update.
Also, listeners are invited to join the event to hear the impact of EU elections on EU-China relations and European business in China, on 22nd August online or in Shanghai.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s new guideline on green transition
https://english.www.gov.cn/policies/latestreleases/202408/11/content_WS66b8a6f7c6d0868f4e8e9d80.html
China foreign trade data, July (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6031214/index.html
China price indexes, July (NBS)
https://www.stats.gov.cn/sj/sjjd/202408/t20240809_1955950.html
Rhodium Group & Atlantic Council: China Pathfinder: Q2 2024 Update
https://rhg.com/research/china-pathfinder-q2-2024-update/European Chamber event: 2024 EU Elections: Navigating the Impact of the EU Elections on EU-China Relations and Business in China
https://www.europeanchamber.com.cn/en/upcoming-events/26384/_Hybrid_2024_EU_Elections_Navigating_the_Impacts_of_the_EU_Elections_on_EU_China_Relations_and_Business_in_China
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 14th August 2024.
(MUSIC)
RUI: On 11th August, the Central Committee of the Chinese Communist Party and the State Council jointly released a guideline with key targets for the country’s green transition.
MARIANN: The 33-point document repeated some of the country’s existing targets for its green energy transition. For instance, it stated that the proportion of non-fossil energy in total energy consumption will reach approximately 25 per cent by 2030. Among the newly added goals, the guideline noted that by the same year, the scale of the energy conservation and environmental protection industry will reach about 15 trillion yuan.
RUI: Commenting on the new guideline, the National Development and Reform Commission pointed to a key challenge that China is facing in its green transition: even though the installed capacity of renewable energy now accounts for more than half of the country’s total installed capacity, China still primarily relies on coal to produce electricity.
MARIANN: This is a significant problem for European companies operating in China, the majority of whom are pursuing carbon neutrality. The Chamber’s Business Confidence Survey found that Chinese reliance on coal is holding European companies back from both meeting their corporate pledges and contributing fully to China’s decarbonisation goals. More than 80 per cent of survey respondents reported that they are decarbonising their energy use as the primary means of achieving carbon neutrality, making access to green energy an imperative. At the same time, two fifths ranked limited access to renewable energy as the key challenge they face in their decarbonisation efforts.
(MUSIC)
RUI: China’s customs authority released data on the country’s foreign trade in July. It showed that export growth slowed compared to the previous two months. The value of imports, however, grew at the fastest pace since April.
MARIANN: In dollar terms, China’s total value of exports rose 7 per cent year-on-year. Meanwhile, the total value of imports shot up sharply – from a 2.3 per cent decline in June to a 7.2 per cent increase in July. As a result, China’s trade surplus dropped by almost 15 billion dollars compared to June. Nevertheless, it remained relatively high at 84 billion dollars.
(MUSIC)
RUI: China’s price indexes in July alleviated some concerns over deflation trends, as consumer price inflation picked up speed and the drop in producer prices was relatively modest.
MARIANN: Data released by the statistics bureau on 9th August showed that consumer prices rose 0.5 per cent year-on-year. This was the most significant increase recorded in five months. The statistics bureau attributed this partly to the impact of extreme weather events, such as heatwaves and heavy rainfalls in several regions. At the same time, due to insufficient market demand, producer prices continued to fall in July, but with the pace of decline unchanged from June, when it slowed to 0.8 per cent, the most modest rate recorded since January 2023.
(MUSIC)
RUI: On 7th August, the Rhodium Group and the Atlantic Council released the latest update of their joint initiative, China Pathfinder. The report finds that in the second quarter of 2024, China’s economic system showed signs that it is moving further away from market economy norms.
MARIANN: The report highlights that macroeconomic data from the second quarter painted an overall picture of slowing growth. For the time being, retail sales and exports were the exceptions to this, but the report warns this could change, as consumer confidence remains low and other economies are stepping up trade protection amid concerns over China’s industrial overcapacity – an accusation the Chinese authorities reject. The report also warns of a growing divergence between official data and its communication on the one hand, and market reactions on the other.
(MUSIC)
RUI: At the beginning of June, the European Parliament held its once-every-five-year elections. European Commission President Ursula von der Leyen secured her mandate for a second term, and the appointment of the new commission is currently ongoing. The EU’s new leadership will have a significant influence on shaping and enacting new EU policies and legislation.
MARIANN: Over recent years, EU-China relations have deteriorated, driven by geopolitical tensions, trade policies and technological competition. This has resulted in the EU adopting a more assertive stance towards China, characterised by increased scrutiny on trade and technology exchanges.
RUI: Join us on 22nd August online or in person in Shanghai to find out how the 2024 EU election results might influence current EU-China dynamics and what the impact may be on European companies in China in terms of trade barriers, market access and investment conditions.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Politburo meeting on H2 economic work and measures to boost consumption;
- Official and Caixin China Purchasing Managers’ Index in July; and
- Five-year action plan to increase urbanisation.
The July/August edition of the Chamber’s bimonthly magazine, EURObiz, is available to download from the Chamber’s website.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
CCP Politburo meeting on H2 economic work and measures to boost consumption
https://english.news.cn/20240731/799445438259465d8b4e64e1dd463f3a/c.html
https://english.news.cn/20240725/6179a8562e7a42cfa4e072a1164ce901/c.html
China official PMI, July (NBS)
https://www.stats.gov.cn/sj/zxfb/202407/t20240731_1955901.html
Caixin China Manufacturing and Services PMI, July
https://www.pmi.spglobal.com/Public/Home/PressRelease/81823e7f64204b7ba2ef1c803cacbefb
https://www.pmi.spglobal.com/Public/Home/PressRelease/7edab8209d2246279f622725025f6d51
State Council’s five-year action plan to increase urbanisation
https://english.www.gov.cn/policies/policywatch/202408/03/content_WS66ad8acfc6d0868f4e8e9b66.html
EURObiz Issue 81 (July/August 2024)
https://www.europeanchamber.com.cn/en/publication-eurobiz-magazine-2024
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 7th August 2024.
(MUSIC)
RUI: On 30th July, the Chinese Communist Party’s Politburo held a meeting focussing on the economic tasks for the second half of the year. The meeting, which was chaired by Chinese President Xi Jinping, emphasised the importance of boosting consumption.
MARIANN: The official readout from the meeting listed the lack of effective domestic demand and difficulties in transitioning from old growth drivers to new ones among the key issues casting a shadow over China’s development. The country’s top decision-makers called for economic policies that bring real benefits to the people. Some concrete areas they outlined included increasing incomes, and supporting consumption in areas such as cultural tourism, elderly care, childcare and domestic services.
RUI: So far, concrete measures intended to boost consumption mainly focussed on large-scale equipment upgrades and trade-ins of consumer goods. In July, the National Development and Reform Commission said that about 300 billion yuan worth of ultra-long special treasury bonds will be set aside for this programme. These bonds would come on top of a 20 billion yuan interest subsidy designated to support equipment renewals and technical upgrades via financial institutions.
(MUSIC)
RUI: China’s statistics bureau issued new data on the country’s manufacturing and services activity on 31st July. It showed that in July, factory activity contracted further from the previous two months. Services activity still grew, but at the slowest pace recorded since last November.
MARIANN: China’s official manufacturing purchasing managers’ index or PMI stood at 49.4 points in July. Readings below 50 points indicate contraction. July was the third month in a row that the manufacturing PMI stayed below the 50-point benchmark. Not only that, but it also sank to the lowest level recorded since February. One contributing factor to this was that demand dropped further from June.
The non-manufacturing PMI, which reflects construction and services activity, dropped to 50.2 points in July, following four subsequent months of slowing growth. This trend was also largely attributable to faltering demand, as subindices for new and ongoing orders both fell further below the 50-point benchmark in July. As a result, optimism over the one-year outlook also dropped sharply, and firms continued to reduce their headcounts.
(MUSIC)
RUI: Data from a private survey conducted by Caixin and S&P Global, released on 1st August, also showed a slump in China’s manufacturing sector in July.
MARIANN: The Caixin China General Manufacturing PMI dipped to 49.8 points in July. This marked the first time since last October that the Caixin index also sank under the 50-point benchmark. According to the survey’s findings, manufacturing production grew at the slowest pace in nine months, as new orders contracted for the first time for a year. Respondents to the survey highlighted weak domestic demand and clients reducing their budgets as key related challenges. A sectoral breakdown showed that new orders fell in the investments and intermediate goods segments. Demand for consumer goods, meanwhile, increased slightly.
The Caixin Services PMI showed an uptick in China’s service economy due to a solid increase in incoming new business.
(MUSIC)
RUI: On 31st July, the State Council released a five-year action plan, with the stated aim of helping more rural migrant workers to settle down in China’s cities.
MARIANN: The action plan sets out a target for the urbanisation rate of permanent residents to reach around 70 per cent within five years. At the end of 2023, this rate just exceeded 66 per cent. The plan outlined two key areas of focus. One is to increase the level of urbanisation in highly populated regions that currently have relatively low urbanisation rates. The other is to improve modern metropolitan areas in regions with high urbanisation rates.
(MUSIC)
RUI: This year will see several important elections taking place around the world. With elections having already taken place for the European Parliament and the French National Assembly, arguably the most globally influential contest—the US presidential election—will take place in November.
MARIANN: New policymakers potentially mean new challenges and opportunities for European companies operating in China.
RUI: The July/August edition of the Chamber’s bimonthly magazine, EURObiz explores how businesses might be impacted by political changes in their home markets. You can download the magazine for free from the Chamber’s website.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Measures to upgrade hotel services for foreign nationals;
- China’s industrial profits in the first half of 2024;
- Analysis of national electricity supply and demand in the first half of 2024; and
- China’s decision to stop publishing daily global stock flows.
Also, listeners are invited to an event on 7th August, either online or in Shanghai, on the implications of the Third Plenum for European businesses in China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Notice on Several Measures to Provide High-level Services to the Outside World and Facilitate the Accommodation of Overseas Personnel
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2024/art_6e5fd351d24c460cad01512ce52d3f83.html
China industrial profits, H1 (NBS)
https://www.stats.gov.cn/sj/zxfb/202407/t20240727_1955855.html
Analysis and Forecast Report on the National Electricity Supply and Demand Situation in the First Half of 2024 (China Electricity Council)
https://cec.org.cn/detail/index.html?3-335294
China to Stop Publishing Daily Global Stock Flows in Mid-August (Bloomberg)
https://www.bloomberg.com/news/articles/2024-07-29/china-to-stop-publishing-daily-global-stock-flows-in-mid-august
European Chamber event:
https://www.europeanchamber.com.cn/en/upcoming-events/26378/_Hybrid_China_s_New_Economic_Blueprint_Unveiled_During_the_Third_Plenum_Implications_for_European_Business_in_China
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 31st July 2024.
(MUSIC)
RUI: On 25th July, China’s Ministry of Commerce, along with seven other ministries and government organisations, issued a joint notice containing eight measures aimed at facilitating accommodation and improving other services for travellers from overseas.
MARIANN: The Notice was released two months after an official statement released in May that called on hotels across the country to accept foreign guests. The May statement was issued in response to online complaints from foreign travellers who reported having been refused rooms on the grounds that the hotels did not have the necessary qualification to provide accommodation to foreign nationals or simply did not know what the required procedure was.
RUI: The eight measures contained in the notice specify some of the steps to be taken by local authorities, hotel operators and online registration platforms in order to optimise services for foreign travellers. These steps include preparing front-desk personnel to handle registration and other services, installing signs in English and improving the foreign language version of hotel booking software and other, related network operation platforms.
(MUSIC)
RUI: Profits made by larger industrial firms in China grew 3.5 per cent in the first half of 2024 compared to the same period last year.
MARIANN: Data released by the country’s statistics bureau on 27th July showed that industrial profits totalled at over 3,500 billion yuan in the January-June period. Over 70 per cent of these profits were generated in the manufacturing sector. The mining sector generated over 17 per cent, while utilities providers about 10 per cent of the total. In June alone, the year-on-year rate of growth in profits was 3.6 per cent.
(MUSIC)
RUI: According to a report released on 24th July by the China Electricity Council, in the first half of 2024, while the country’s power consumption increased compared to the same period last year, for the first time the proportion of coal power fell below the combined share of wind and solar energy.
MARIANN: Total electricity consumption rose 8.1 per cent year-on-year in the January-June period. Power consumption jumped significantly in high-tech and equipment manufacturing, and in the internet data services sector. The latter’s electricity consumption surged 33 per cent, which the Council attributed to fast-paced development in areas such as mobile internet, big data and cloud computing. The report forecasts that in 2024, China’s total energy consumption will grow 6.5 per cent compared to last year. Meanwhile, the installed capacity of wind and solar energy production is expected to surpass 40 per cent of the country’s total capacity by the end of the year.
(MUSIC)
RUI: Bloomberg reported on 29th July, that starting from mid-August China will further curb access to information on its stock market flows.
MARIANN: Bloomberg cited a statement from the Shanghai and Shenzhen exchanges issued on 26th July, which said that from 18th August, they will no longer disclose end-of-day data on global stock flows. The publication of real-time flows data was already suspended in May. Access to important information related to the economy has already been significantly curtailed, especially for foreign entities. Without access to such data and related business intelligence, companies are increasingly unable to make well-informed investment decisions in China, making them increasingly likely to look to other jurisdictions that offer more transparency.
(MUSIC)
RUI: On 18th July, the Central Committee of the Chinese Communist Party concluded its Third Plenum, a major conference held every five years to chart the overall direction of the country’s long-term economic and social policies.
MARIANN: At this year’s Third Plenum, China’s leadership has again acknowledged many of the headwinds facing the country’s economy, including risks in the real estate sector and local government debt, and signalled its intent to deepen reforms. The resolution passed at the session highlights the task of deepening reform to advance the country’s modernisation. At the same time, it reiterates the need to balance economic recovery against national security concerns, while maintaining social stability.
RUI: Join us on 7th August online or in person in Shanghai to learn about the Third Plenum’s implications for European businesses operating in China. Experts and industry players will discuss market opportunities, potential risks and challenges, and strategies to navigate China’s evolving business landscape. They will also share their views on the future of China’s economic opening, as well as geopolitical considerations, and their impact on specific sectors.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- The communique issued at the Third Plenum;
- The World Trade Organization’s ninth review of China’s trade policy; and
- Youth unemployment data in June.
Also, the European Chamber joined a roundtable on Large-scale Equipment Renewals and Trade-in of Consumer Goods hosted by the Vice Minister of Commerce Ling Ji on 17th July. Listen to learn more.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Third Plenum of the 20th Central Committee of the Communist Party of China
https://global.chinadaily.com.cn/a/202407/18/WS6698f75aa31095c51c50ec9d.html
WTO’s 9th Trade Policy Review of China
https://www.wto.org/english/tratop_e/tpr_e/s458_e.pdf
https://www.eeas.europa.eu/delegations/world-trade-organization-wto/eu-statement-9th-trade-policy-review-peoples-republic-china-17-july-2024_en?s=69
China youth unemployment data, June (NBS)
https://data.stats.gov.cn/easyquery.htm?cn=A01
European Chamber joins MOFCOM Roundtable on Large-scale Equipment Renewals and Trade-in of Consumer Goods
https://mp.weixin.qq.com/s/ZiCnxsTrMMaP-3bZKdqbzg
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 24th July 2024.
(MUSIC)
RUI: On 18th July, the Central Committee of the Chinese Communist Party concluded its Third Plenum and passed a resolution on deepening reform to advance the country’s modernisation.
MARIANN: In a communiqué issued on the closing day of the third plenary session, China’s leadership reaffirmed its resolution to “pursue progress while ensuring stability”. The document emphasised the need to better leverage the role of the market and foster a fairer and more dynamic market environment. Among some of the highlighted tasks for deepening reform, it listed removing restrictions on the market and providing an equal footing for economic entities of different ownership structures to compete and develop. The communique also stated the intent of deepening reforms pertaining to foreign trade, as well as outbound and inbound investment. The tasks listed in the communique are to be completed by 2029.
RUI: It is positive that China’s leadership has again acknowledged many of the headwinds facing the country’s economy, including risks in the real estate sector and local government debt, and signalled its intent to deepen reforms. It is notable that the Communique is largely a reiteration of points that have been outlined by the Chinese Government over recent years, underscoring the fact that there appears to be no deviation from its immediate priority, which is to balance its economic recovery against national security concerns, while maintaining social stability.
MARIANN: In an interview with CGTN, European Chamber President Jens Eskelund highlighted some of the key takeaways from the Third Plenum Communique:
JENS: Our immediate observations are that it is very much a reaffirmation of some of the policy initiatives that we have seen before, earlier, in connection, for example, with the NPC in March – the National People’s Congress – where we saw, really, a high emphasis on new quality productive forces. And we see that continue here with a high focus on developing more sophisticated manufacturing, on growing into higher value-added manufacturing. But I think also other aspects were notable to us. We saw that there was a focus on also looking at the healthcare system, at elderly care, at education – and these are things that we think are important in the sense that one of the issues, challenges that China is facing today is low demand. It’s not because the money is not there, because the savings rate is actually pretty high in China. But if you have more of a safety net, if you don’t have to worry to the same extent about pension, about education, about healthcare, maybe that would make people more likely to spend some of those money that now are being kept in bank accounts, and in that way, help stimulate demand growth in China presently.
(MUSIC)
RUI: Between 17th and 19th July, the World Trade Organization conducted its ninth review of China’s trade policies and practices, acknowledging China’s important role in global economic growth, but also highlighting that the service-orientated structural shift that the country had previously embarked upon came to a standstill.
MARIANN: The review was based on a report compiled by the organisation’s secretariat and another one submitted by the Chinese Government. China’s efforts to further attract foreign investment were lauded along with a lifting of restrictions on foreign investment into key sectors, including manufacturing. However, some WTO members also expressed concerns over discriminatory treatment against foreign-funded enterprises and a lack of transparency in the application of certain regulations.
In a statement delivered by João Aguiar Machado, the European Union’s Ambassador to the WTO, the EU called on China to refrain from claiming developing country status and to fulfil its notification and transparency obligation to the WTO, calling it troubling that “important gaps in relation to information on China’s industrial subsidies as well as domestic support in the agriculture sector remain”. On the topic of financial support and other incentives to different industries, the WTO’s report said that its secretariat was “not able to gain deeper insight into the levels of financial support for certain highly traded sectors, such as aluminium, electric vehicles, glass, shipbuilding, semiconductors, or steel.”
(MUSIC)
RUI: Data published by China’s National Bureau of Statistics showed that the urban youth unemployment rate shrank to the lowest level in half a year in June. Even so, the jobless rate among 16- to 24-year-olds not enrolled in schools was more than twice as high as among the general urban, working-age population.
MARIANN: Since December last year, the statistics bureau changed the criteria for its urban youth unemployment rate, and no longer include young people on the job market who are still affiliated with a school. The revised index peaked at 15.3 per cent in February and March, and dropped to 13.2 per cent by June. In the adjacent age group, between the ages of 25 and 29, 6.4 per cent of jobseekers in China’s big cities were unable to finding an occupation. By comparison, the general urban unemployment rate stood at 5 per cent in June.
(MUSIC)
RUI: On 17th July, European Chamber Secretary General Adam Dunnett and representatives of the Chamber’s Advisory Council attended a roundtable meeting hosted by Vice Minister Ling Ji of the Ministry of Commerce.
MARIANN: At the roundtable, which focussed on large-scale equipment renewals and the trade-in of consumer goods, the Chamber raised concerns over foreign companies’ participation in large-scale equipment renewal programmes in the healthcare equipment sector due to the lack of clarity and publicly available information about specific measures and processes. In addition, in some sectors, such as the rail industry, the industry-specific action plans or guidelines on major equipment upgrades emphasise the idea of self-reliance, which tilts the playing field toward domestic suppliers.
RUI: At the same time, the Chamber commended the continued development of remanufacturing standards in areas such as automotive components, and acknowledged China’s efforts at cultivating consumer awareness of the need for the timely replacement of equipment with high energy consumption and emission rates.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Foreign trade data in June and the first half of 2024;
- China’s GDP and macroeconomic indicators in the second quarter this year;
- Temporary policy adjustments in six Chinese cities to boost foreign investment in the service sector;
- European Commission anti-dumping tariffs on Chinese titanium dioxide imports.
Also, if you listen to China Dispatches, the podcast will be dedicating three future episodes to exploring some of the findings in the Business Confidence Survey 2024 on carbon neutrality, market access and competition with members from relevant industries.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China Q2 GDP, macroeconomic indicators (NBS)
https://www.stats.gov.cn/sj/zxfb/202407/t20240715_1955618.html
China foreign trade data, June and H1 (GAC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5982336/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5982433/index.html
Temporary policy adjustments in 6 Chinese cities to boost foreign investment in service sector
https://www.gov.cn/zhengce/content/202407/content_6962582.htm
European Commission imposing anti-dumping tariffs on Chinese titanium dioxide imports
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32024R1923&qid=1721096981940
European Chamber podcast: China Dispatches
https://podcast.europeanchamber.com.cn/category/china-dispatches/
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 17th July 2024.
(MUSIC)
RUI: Chinese export growth accelerated to the fastest rate recorded in fifteen months in June, while imports fell sharply after two consecutive months of expansion.
MARIANN: In US dollar-denominated terms, the value of China’s exports surged 8.6 per cent year-on-year. Data for the first half of the year showed a 3.6 per cent increase in China’s total export value. Meanwhile, the country’s imports fell 2.3 per cent year-on-year in June, and rose 2 per cent in the first half, compared to the same period last year. The half year data revealed that the total value of China’s imports was about three quarters of its total value of exports, resulting in a trade surplus of 435 billion US dollars.
In the first half of 2024, the European Union remained China’s second largest trade partner, with China’s total value of exports to the EU almost double the amount of its imports from the bloc.
(MUSIC)
RUI: The growth of China’s economy slowed in the second quarter, with the country battling several challenges, including weak consumption and growing tensions over trade imbalances with some of its largest trade partners.
MARIANN: China’s gross domestic product rose 4.7 per cent year-on-year in the April-June period, which was the lowest level of quarterly growth since the first quarter of 2023. At the Two Sessions held in March, China set the annual target for its GDP growth rate at about 5 per cent, matching last year’s goal.
(MUSIC)
RUI: On 15th July, along with the GDP figures, the National Bureau of Statistics released a series of other macroeconomic indicators, some of which suggested a slowdown in growth in June.
MARIANN: Production at larger industrial firms increased 5.3 per cent year-on-year, with the pace of growth decelerating to the slowest in three months. The total value of retail sales edged up 2 per cent from the same period last year, which was the lowest increase since December 2022. As for the first half of the year, industrial production expanded 6 per cent, while retail sales rose 3.7 per cent year-on-year. The surveyed urban unemployment rate stood at 5.1 per cent.
(MUSIC)
RUI: On 11th July, the State Council announced a list of temporary policy adjustments to be implemented in six cities—Shenyang, Nanjing, Hangzhou, Wuhan, Guangzhou and Chengdu—with the goal of attracting foreign investment.
MARIANN: The nine, city-specific measures focus on promoting further opening of the services sector. Notably, however, the listed provisions are narrowly defined. For instance, foreign investors will be allowed to set up non-profit elderly care facilities in Hangzhou, Guangzhou and Chengdu. Similarly, in Shenyang, Nanjing, Guangzhou and Chengdu, they will be able to operate travel agencies and offer outbound travel services. While the release of these provisions is seen as a positive step, their impact is expected to be highly limited due to their narrow scope.
(MUSIC)
RUI: On 11th July, the European Commission announced preliminary anti-dumping tariffs on Chinese imports of titanium dioxide, a chemical product used in a wide range of industrial and consumer products ranging from paint and coatings to textiles and pharmaceuticals.
MARIANN: The Commission launched an anti-dumping probe into the product in November 2023, and has now issued provisional anti-dumping duties ranging from 14.4 to 39.7 per cent. Interested parties can submit their written comments on the regulation within 15 days of it coming into force.
(MUSIC)
RUI: The European Chamber published its annual Business Confidence Survey in early May. The Chamber’s long-format podcast, China Dispatches is dedicating three episodes to discuss some of the survey’s findings with members from relevant industries.
MARIANN: Check the latest episodes of the Dispatches series to hear on-the-ground insights on European companies’ decarbonisation strategies and the challenges they face reaching their targets in China. You can also find out more about the sectors in which businesses report some recent market opening. And stay tuned for our upcoming episode on competition.
RUI: You can find all episodes of China Dispatches on the Chamber’s website and WeChat account. They are also available on Apple Podcasts, Spotify and YouTube.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s price indices in June;
- State Council’s action plan to improve government procurement;
- Guideline to prevent financial fraud in the capital market;
- China Climate Change Blue Book 2024.
Also, listeners are invited to join an event online or in Beijing on 23rd July on the impact of the French elections on France’s China policy and EU’s relationship with China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China price indices, June (NBS)
https://www.stats.gov.cn/sj/zxfb/202407/t20240710_1955509.html
https://www.stats.gov.cn/sj/zxfb/202407/t20240710_1955508.html
State Council’s action plan to improve government procurement
https://english.www.gov.cn/policies/latestreleases/202407/04/content_WS66866f3cc6d0868f4e8e8dc1.html
New guideline to prevent financial fraud in the capital market
https://english.www.gov.cn/policies/latestreleases/202407/05/content_WS6687cd66c6d0868f4e8e8e92.html
China Climate Change Blue Book 2024
https://www.cma.gov.cn/2011xwzx/2011xqxxw/2011xqxyw/202407/t20240705_6400897.html
European Chamber event: The Impact of French Elections 2024 – Navigating Shifts in EU-China Ties
https://www.europeanchamber.com.cn/en/upcoming-events/26326/_Hybrid_The_Impact_of_French_Elections_2024_Navigating_Shifts_in_EU_China_Ties
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 10th July 2024.
(MUSIC)
RUI: The year-on-year drop in China’s producer prices slowed further in June, while consumer prices continued to increase at a subdued pace, according to data released by the statistics bureau on 10th July.
MARIANN: Prices producers charge their customers fell 0.8 per cent in June compared to the same period last year. This was the lowest rate of decrease recorded since January 2023. In the first half of 2024, producer prices dropped 2.1 per cent year-on-year. Consumer prices edged up 0.2 per cent in June from the same period last year. The slight increase was largely prompted by a rise in prices of services and non-food consumer goods, as food prices continued to fall. In the first half of the year, consumer prices dipped 0.1 per cent below the level recorded in the first six months of 2023.
(MUSIC)
RUI: On 4th July, China’s State Council issued an action plan to improve government procurement processes, by establishing standards to ensure a level playing field for domestically produced products regardless of the company’s ownership structure.
MARIANN: The plan is aimed at addressing and resolving major existing problems, such as the application of discriminatory terms, bid-rigging and arbitrary charges within the next three years. The State Council called for relevant laws and regulations to be further improved to align with international rules, including the World Trade Organization’s Government Procurement Agreement.
RUI: A lack of fair access to government procurement in China has been a longstanding issue for European companies operating in the country. Medical device procurement has been a key advocacy topic for the European Chamber’s Healthcare Equipment Working Group since the launch of the China Manufacturing 2025 initiative in 2015, which included market share targets for domestic high-end medical devices. In April, the EU launched an investigation into medical device procurement in China, seeking to address EU companies’ concerns.
(MUSIC)
RUI: On 5th July, six of China’s national institutions, including two ministries, the People’s Bank of China and the State Council, jointly issued a guideline to further prevent financial fraud in the capital market.
MARIANN: The guideline sets serious punishments for fraudulent issuance of stocks and bonds and calls for tackling systematic and coordinated fraud. The document is also aimed at improving coordination between ministries and central and local authorities for better market supervision and enforcement of relevant laws and regulations.
(MUSIC)
RUI: On 4th July, China’s meteorological administration released the China Climate Change Blue Book 2024, which recorded historic highs in the country’s average temperatures in 2023.
MARIANN: 2023 was the warmest year globally, since meteorological observations began in 1850. In China, the annual average surface temperature was 0.8 Celsius degrees higher than normal, making last year the warmest since 1901. The Blue Book observes that extreme high temperatures and heavy precipitation tend to be both more frequent and more intense in China, with extreme low temperatures generally showing the opposite trend.
China has been grappling with extreme weather events in recent months too, with several central and southern provinces inundated with floods, while heat waves have been exacerbating droughts in the country’s northern regions.
(MUSIC)
RUI: As the European parliamentary elections yielded a setback for the French government, French President Emmanuel Macron dissolved the country’s parliament and called for snap elections to be held in June.
MARIANN: With France playing a pivotal role in EU agenda-setting, its domestic political landscape can significantly influence the bloc’s stance on international affairs, trade policies, and strategic partnerships.
RUI: Join us on 23rd July online or in person in Beijing to find out how the different electoral outcomes will shape France’s China policy. Find out how experts assess the potential impact of the French elections on EU trade, competition, industrial, foreign and security policies, particularly in relation to China.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s renewed calls for attracting foreign investment;
- Official Manufacturing Purchasing Managers’ index (PMI) and Caixin China General Manufacturing PMI in June;
- Industrial profits from January to May;
Also, listeners are invited to join an event in Beijing on the development of artificial intelligence (AI) to discuss the challenges and future trends of the AI industry.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Renewed calls for attracting foreign investment
http://www.news.cn/politics/leaders/20240626/6d078e9f4f534fbbaf5bd6635a23691c/c.html#:~:text=%E6%96%B0%E5%8D%8E%E7%A4%BE%E5%8C%97%E4%BA%AC6%E6%9C%882,%EF%BC%88%E4%BF%AE%E8%AE%A2%E8%8D%89%E6%A1%88%EF%BC%89%E3%80%8B%E3%80%82
https://english.www.gov.cn/news/202407/01/content_WS6682a12dc6d0868f4e8e8be0.html
China Official PMI, June (NBS)
https://www.stats.gov.cn/sj/zxfb/202406/t20240630_1955251.html
Caixin China General Manufacturing PMI, June
https://www.pmi.spglobal.com/Public/Home/PressRelease/dbf0d2731415453f99fac0d7826e16ea
China, industrial profits, January-May (NBS)
https://www.stats.gov.cn/sj/zxfb/202406/t20240627_1955196.html
Chamber event: Panorama Seminar on the Development of Artificial Intelligence
https://www.europeanchamber.com.cn/en/upcoming-events/26248
Transcript:
XINHE: Hello and welcome to China ShortCuts,
RUI: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 3rd July 2024.
(MUSIC)
XINHE: On 26th June, China’s State Council reiterated the need for increased efforts to attract and stabilise foreign investment.
RUI: At the executive meeting, chaired by Chinese premier Li Qiang, the State Council underscored the important role that foreign-invested enterprises play in “building a new development pattern”. The meeting called for further opening up of key areas, and listed removing access restrictions on foreign investment in the manufacturing sector and launching new pilot measures for promoting further opening up in the service industry as concrete steps to be taken. The State Council said it is necessary to ensure that both domestic and foreign-invested firms can participate in government procurement without discrimination. Specific sectors in which optimisation of foreign investment policies is being urged are pharmaceuticals and medical devices. The meeting also highlighted the need for updating the Catalogue of Encouraged Industries for Foreign Investment, which was last revised in 2022.
XINHE: During a symposium on foreign investment, held on 1st July, Chinese Vice Premier He Lifeng also emphasised the importance of attracting more foreign capital into China, adding that channels should be provided for foreign firms to raise their concerns, and that the relevant Chinese authorities should respond promptly. [MN1]
(MUSIC)
XINHE: According to data released by the National Bureau of Statistics on 30th June, manufacturing activity in China shrank for the second consecutive month, while growth in services activity slowed in June.
RUI: The official manufacturing purchasing managers’ index, or PMI, was unchanged from May at 49.5 points. Readings below the 50-point benchmark indicate contraction. While manufacturing production continued to expand in June, new orders dropped further, resulting in firms decreasing further both their raw material inventories and their staffing levels.
The headline index for non-manufacturing, which includes the services and construction sectors, indicated the lowest rate of growth all year at 50.5 points. The expansion in construction activity was the slowest recorded in the past eleven months. Services growth also fell to a five-month low. Both indices were primarily dragged down by weak demand and shrinking employment levels.
(MUSIC)
XINHE: A private survey conducted by Caixin and S&P Global showed the fastest improvement in business conditions in China’s manufacturing sector in over three years. The discrepancy with the official data from the statistics bureau is primarily due to the different sample size of the two surveys.
RUI: The Caixin manufacturing PMI rose to 51.8 points in June, indicating the fastest growth since May 2021. As new orders continued to rise, production also increased further, with output growth accelerating to the quickest pace in two years. Employment was broadly stable. While sentiment over the coming 12-months remained positive overall, the level of confidence is still the lowest for over four years, with surveyed manufacturers citing concerns over rising competition and uncertain market conditions.
(MUSIC)
XINHE: According to data released by the National Bureau of Statistics on 27th June, in the first five months of 2024, profits at larger industrial firms in China increased 3.4 per cent compared to the same period last year.
RUI: While profits grew in the January-May period, the pace of growth has been on a continuous decline from a 10.2 per cent high-point recorded in the first two months of the year. In May alone, the year-on-year growth was only 0.7 per cent. Out of the three main industrial sectors of mining, manufacturing, and energy and utilities production and supply, profits increased steeply among the last group, while mining companies experienced a fall in profits surpassing 16 per cent.
(MUSIC)
XINHE: Artificial intelligence, especially generative AI, is gradually becoming a new engine for economic development, playing a key role in global technological innovation that is reshaping various industries. On 13th July 2023, China issued its first regulations on generative AI, the Interim Measures for the Administration of Generative AI Services.
RUI: Join us on 13th July, the first anniversary of the release of the Interim Measures, to hear experts, lawyers, consulting institutions and representatives from industries discuss in depth the challenges and future trends of the AI industry.
XINHE: Please note that the event will be held in Chinese with word translation service provided in English using Teams live captions.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- EU and China agree to talks on potential EV tariffs;
- China to limit low-end capacity in the solar industry;
- Foreign direct investment from January to May 2024;
- New measures to boost consumption;
From the Chamber’s side, the latest issue of EURObiz is released and available to download.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
EU and China agree to talks on potential EV tariffs
http://www.mofcom.gov.cn/article/xwfb/xwbldhd/202406/20240603518155.shtml
http://www.mofcom.gov.cn/article/xwfb/xwbldhd/202406/20240603518157.shtml
https://www.ft.com/content/9902c9f2-3664-4a23-a5a5-77bca4979d96
China to limit low-end capacity in the solar industry
http://www.nea.gov.cn/2024-06/20/c_1310779045.htm
https://www.caixinglobal.com/2024-06-24/china-to-limit-low-end-solar-manufacturing-capacity-102209345.html
January to May 2024 FDI (MOFCOM)
http://www.mofcom.gov.cn/article/xwfb/xwsjfzr/202406/20240603517966.shtml
New measures to boost consumption (NDRC)
https://www.ndrc.gov.cn/xwdt/tzgg/202406/t20240624_1391293_ext.html
EURObiz May/June 2024 edition:
https://www.europeanchamber.com.cn/en/eurobiz-magazine
Transcript:
XINHE: Hello and welcome to China ShortCuts,
RUI: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: This episode was recorded on 26th June 2024.
(MUSIC)
XINHE: China and the EU have agreed to start talks over planned tariffs of up to 48 per cent on electric vehicles exported from China into Europe. The talks were announced on the sidelines of German Vice Chancellor Robert Habeck’s three-day trip to China.
RUI: Habeck argued that the EU’s approach to tariffs was not a “take it or leave it” situation, but rather open to change through dialogue. At a press conference held on 22nd June, the vice chancellor referred to the potential escalation of tariffs and counter tariffs as a “dangerous development,” telling reporters, “I hope nobody in Europe wants the tariffs.”
Habeck also held separate meetings with the National Development and Reform Commission and the Ministry of Commerce. Commerce Minister Wang Wentao, while welcoming the EU’s offer for talks, called the tariffs a “typical protectionist measure” aimed at supressing the development of Chinese companies.
After the meeting, Wang Wentao and EU Commissioner Valdis Dombrovskis agreed to launch negotiations over the electric vehicle tariffs, according to an announcement on the Ministry of Commerce’s website.
(MUSIC)
XINHE: The National Energy Administration announced that it would take steps to limit low-end capacity in the solar energy industry following a call from a consortium of domestic companies for greater government involvement in the sector.
RUI: The surge in capacity has driven down the price of components and squeezed the profits of solar manufacturers, which could lead to bankruptcies in the industry. At a press conference on 20th June, the director of the new and renewable energy sources department at China’s energy regulator announced that the NEA will take several measures to guide the development of the solar industry. The measures include promoting the construction of a new energy infrastructure network and improving the grid’s ability to accept, configure and regulate electricity generated from new energy sources.
The European Chamber’s Business Confidence Survey shows that limited access to renewables is reported by 62% as the top challenge to decarbonising their operations in China. Its Energy Working Group noted that China’s west-east electricity transfer project is currently limited by the transmission line capacity. In addition, western provinces need to satisfy their own Renewable Portfolio Standard (RPS) first before delivering renewable electricity to eastern cities. The RPS mechanism sets mandatory renewable and non-hydro renewable consumption targets at the provincial level.
(MUSIC)
XINHE: Data disclosed by the Ministry of Commerce showed that China’s actual use of foreign direct investment in the first five months of 2024 fell more than 28 per cent year-on-year.
RUI: China attracted 412-billion-yuan worth of foreign direct investment from January to May 2024. The decline accelerated from the first four months of the year. A breakdown of the data indicated that over a quarter of FDI in the first five months of the year was utilised in the manufacturing sector. Actual foreign investment from Singapore increased by more than 16 per cent, while FDI from Germany increased by more than 24 per cent.
After releasing the data, the Ministry of Commerce explained that the decline was a result of the fact that FDI had fallen from a high baseline at the beginning of 2023. At the same time, the Ministry emphasised that China would continue to improve the business environment, including through implementation of the August 2023 24 measures, which are aimed at improving China’s ability to attract foreign investment.
The Ministry of Commerce further noted that over twenty-one thousand new foreign invested enterprises were set up in the first five months of the year, a 17.4 per cent increase from the same period in 2023.
(MUSIC)
XINHE: The National Development and Reform Commission (or, NDRC) released a series of measures to spur domestic consumption on 24th June.
RUI: The measures include policy adjustments across six areas, including catering, tourism, retail, bulk commodities, healthcare, and community convenience services. Among the adjustments related to tourism, the NDRC promoted several measures for making inbound tourism more convenient. Specific policies include optimising entry and exit procedures, promoting the acceptance of foreign bank cards, and making it easier for foreign nationals to purchase tickets and make hotel reservations.
As supply-side policies continue to contribute to the trade imbalances that China has accumulated with the EU and the US, the European Chamber has argued that stimulating consumption and providing support to the demand side is important for getting China’s economy back on track, while reducing tensions with its trade partners.
(MUSIC)
XINHE: The latest issue of the Chamber’s bimonthly magazine EURObiz explores a number of areas relevant to European businesses’ operations in China. Featured articles delve into topics such as the European Union’s risk management measures and the origins of the term “de-risking”.
RUI: The May/June edition of EURObiz is now available to download for free from the Chamber’s website.
(MUSIC)
XINHE: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- EU’s tariffs on battery electric vehicles imported from China;
- Retail sales and industrial production data in May;
- Consumer and producer prices in May;
- Group of Seven’s stance on trade relations with China.
From the Chamber’s side, a high-level meeting with vice minister of the State Administration for Market Regulation took place. Also, listeners are invited to join a midsummer business reception in Beijing on 27th June to connect with European business and diplomatic community while enjoying the elegant and relaxed atmosphere.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Commission’s pre-disclosure of provisional countervailing duties on Chinese BEVs
https://ec.europa.eu/commission/presscorner/detail/en/qanda_24_3232
MOFCOM announcement of anti-dumping probe into EU import of pork and pork byproducts
http://trb.mofcom.gov.cn/article/cs/202406/20240603516928.shtml
China June macroeconomic data (NBS)
https://www.stats.gov.cn/sj/zxfb/202406/t20240617_1954710.html
G7 Leaders’ Communiqué
https://www.consilium.europa.eu/media/fttjqncg/apulia-g7-leaders-communique.pdf
European Chamber meets SAMR vice-minister Tian Shihong
https://www.cfsn.cn/news/detail/22/251567.html
European Chamber Midsummer Business Reception
https://www.europeanchamber.com.cn/en/upcoming-events/26146/European_Chamber_Midsummer_Business_Reception_Connecting_European_Business_Minds
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 19th June 2024.
(MUSIC)
RUI: On 12th June, the European Commission announced provisional countervailing duties on battery electric vehicles imported from China, underlying the urgency of finding solutions to the imbalances in the commercial relationship between Europe and China.
MARIANN: The provisional tariffs, which range between 17.4 and 38.1 per cent, will be introduced on 4th July if discussions with the Chinese side do not lead to a solution to the matter. However, as the EU’s anti-subsidies investigation is just entering its provisional stage, definitive measures, if taken, will only be confirmed at the end of the year.
After the Commission’s announcement, China’s Ministry of Commerce said that China would take all necessary measures to defend the legitimate rights and interests of Chinese companies. Five days later, on 17th June, the ministry launched an anti-dumping investigation into pork and pork byproducts imported from the EU.
The European Chamber has been consistently advocating for fair competition and a level-playing field, and encourages both sides to take action to depoliticise the business environment and find ways to address underlying causes.
(MUSIC)
RUI: Data disclosed by the National Bureau of Statistics on 17th June showed that in China, retail sales and industrial production both continued to expand in May compared to the same period last year.
MARIANN: The total value of retail sales in China increased 3.7 per cent year-on-year in May. This was the strongest rate of year-on-year growth of the past three months. About 90 per cent of the total value was contributed by sales of goods, with the remaining 10 per cent accumulated through catering sales.
Production at larger industrial firms expanded 5.6 per cent compared to the same period last year. The rate of growth dropped more than one percentage point from the previous month, which was largely due to a relatively moderate increase in production in the mining industry and among utilities producers and providers.
The surveyed urban unemployment rate remained unchanged from April at 5 per cent.
(MUSIC)
RUI: Chinese consumer prices remained subdued, and even though the fall in producer prices slowed in May, deflationary pressures remain.
MARIANN: Consumer prices edged up 0.3 per cent year-on-year in May, as the drop in food prices was almost twice as much as the uptick in non-food prices.
Producer prices dropped 1.4 per cent year-on-year, which was the most moderate rate of decline recorded in 15 months. China’s producer price index has been indicating a continuous fall since September 2022.
(MUSIC)
RUI: Between 13th and 15th June, leaders of the Group of Seven—Italy, Canada, France, Germany, Japan, the United Kingdom, and the United States of America—held their annual summit in Italy, with the President of the European Council and the President of the European Commission representing the European Union at the event. A communique issued at the summit detailed the group’s stance on trade relations with China, reiterating that the group is de-risking and diversifying supply chains where necessary and appropriate and is acting together to foster economic resilience.
MARIANN: G7 leaders recognised the important role China occupies in the international community, and called cooperation with the country necessary to address global challenges, including climate change and pollution. They reiterated their commitment to advancing free and fair trade and called for strengthening the multilateral, rule-based trading system with the World Trade Organization at its core. While the communique stressed that the G7 group is not decoupling or turning inwards, they are concerned about some of China’s policies and practices that were described as “leading to global spillovers, market distortions and harmful overcapacity in a growing range of sectors”.
(MUSIC)
RUI: On 14th June, a European Chamber delegation led by Chamber President Jens Eskelund met with Tian Shihong, vice minister of the State Administration for Market Regulation and administrator of the Standardisation Administration of China.
MARIANN: The two sides had an in-depth exchange on economic and trade relations between Europe and China, as well as on standards and conformity assessment, testing and certification, intellectual property protection, anti-monopoly enforcement and food safety regulation. The vice minister recognised the Chamber’s role in promoting communication between the government and European business and vowed to listen to the Chamber’s views and work to create favourable conditions for European companies to invest in China.
(MUSIC)
RUI: Each year, the European Chamber’s signature Midsummer Business Reception provides a unique platform to connect and engage with the European business and diplomatic community.
MARIANN: Join our exclusive event on 27th June at the garden terrace of the Bulgari Hotel, which offers an oasis of calm and sophistication in the middle of bustling Beijing. Enjoy a delicious cocktail menu and a wide selection of refreshments while taking part in insightful discussions, exchange innovative ideas and uncover opportunities for collaboration.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- State Council adopted draft rules on implementing the management system for registered capital stipulated by the company law;
- Foreign trade data in May;
- China’s Provincial Business Environment Index 2023 Report
Also, listeners are invited to join an event in Beijing or online on 19th June on the European Parliament’s election results and its impact on EU-China relations.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
State Council executive meeting on 7th June
https://english.www.gov.cn/news/202406/07/content_WS66630e70c6d0868f4e8e7ea3.html
China foreign trade data, May (GACC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5917142/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5917217/index.html
China’s Provincial Business Environment Index 2023 Report
https://cmi.ssap.com.cn/newsDetail?id=43
European Chamber event: EU Elections 2024: How Will It Affect The International Landscape
https://www.europeanchamber.com.cn/en/upcoming-events/26134/_Hybrid_EU_Elections_2024_How_Will_It_Affect_the_International_Landscape_
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recoded on 12th June 2024.
(MUSIC)
RUI: At an executive meeting held on 7th June, the State Council adopted draft rules on implementing the management system for registered capital stipulated by the company law.
MARIANN: The meeting called for efforts to implement policies related to the registered capital management system. These include adjusting investment periods for existing companies and ensuring that shareholders fulfil their obligations for capital contributions.
The National People’s Congress Standing Committee passed a significantly revised version of the Company Law on 29th December 2023, which will enter into force on 1st July 2024.
The revised law offers new allowances with regard to supervisors and supervisory boards, as well as greater freedom to choose which personnel can serve as legal representative, which is a positive. However, it also reintroduces a five-year time limit on capital contributions, ending a ten-year period during which investors had the freedom to plan timelines for capital contributions based on their specific business needs.
The five-year time limit was likely intended to protect the interests of investors by combatting bad-faith actors who register unrealistically large sums of capital without the ability to fulfil the contributions. However, this limit applies to all limited liability companies and has a disproportionate impact on small- and medium enterprises that have limited resources to adapt to volatility. It is particularly unappealing to the China subsidiaries of European companies, which are increasingly reliant on re-investment of retained earnings in China instead of new capital injections from abroad for their operations in China.
(MUSIC)
RUI: China’s exports grew at the fastest pace in over a year in May, while the increase in imports slowed significantly after a strong rebound recorded in April.
MARIANN: In dollar-denominated terms, the total value of exports rose 7.6 per cent compared to the same period last year. In the first five months of 2024, the year-on-year export growth reached 2.7 per cent. China’s imports expanded 1.8 per cent year-on-year in May, with the total value reaching 219 billion US dollars – which was slightly more than two thirds of the country’s total value of exports in the same month. In the first five months of the year, imports grew at a somewhat faster rate than exports.
The European Union remained China’s second largest foreign trade partner after the Association of Southeast Asian Nations. The country’s total trade value with the EU reached 67 billion US dollars in May, with about two-thirds of this amount contributed by exports to the bloc.
(MUSIC)
RUI: On 5th June, the National Economic Research Institute released a report on the findings of its 2023 provincial business environment survey, identifying that private enterprises in China face more difficulties than their state-owned counterparts.
MARIANN: The survey, which was conducted in 2022 and 2023 among more than two thousand enterprises, found that in 23 out of 25 sub-indices, private companies scored significantly worse than SOEs. These included “legal environment for business operations” and “financial services and financing costs”. The Beijing-based think tank concluded that the findings indicated a certain degree of unequal competition between the two types of companies.
The report also highlighted the phenomenon of excessive competition, which it linked to overcapacity, and argued that overcapacity can lead to competition based purely on price. Other factors listed as potential causes behind excessive competition were past overinvestment and weak market demand.
(MUSIC)
RUI: At the beginning of June, the European Parliament held its once-every-five-year elections. Over 350 million citizens across the EU’s 27 member states cast their votes. According to provisional data, the European People’s Party is set to secure a quarter ofthe 720 members of the next European Parliament, and European Commission President Ursula von der Leyen has a strong chance of remaining in power during the next stage of the election process, when the new leaderships of the various EU institutions will be selected and appointed. The periodic elections and subsequent leadership appointments set the tone for political trends in Europe as well as the direction of the EU’s internal and external policies.
MARIANN: The 2019–2024 term saw remarkable developments on the EU’s views on and approach to China. An increasingly fraught trade and political relationship, together with emerging challenges and black swan events such as the COVID-19 pandemic and Russia’s invasion of Ukraine, have all contributed to a more assertive EU stance towards China, as well as a stronger political will to ensure reciprocity and reduce distortive practices in the European Single Market.
RUI: Join us in Beijing or online on 19th June for fresh insights from scholars and experts on the European Parliament’s election results, to learn what policy and leadership changes to expect, and how they will impact the outlook of EU-China relations.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- The State Council’s 2024-2025 Action Plan for Energy Conservation and Carbon Reduction;
- May’s Official Purchasing Managers’ Index (PMI) and the Caixin China General Manufacturing PMI;
- The International Monetary Fund’s revised economic growth projection for China.
Also, European Business Organisation’s Worldwide Network released its Position Paper on the European Union’s new Corporate Sustainability Due Diligence Directive, which is available to download.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
State Council’s 2024-2025 Action Plan for Energy Conservation and Carbon Reduction
https://www.gov.cn/zhengce/zhengceku/202405/content_6954323.htm
China official PMIs, May (NBS)
https://www.stats.gov.cn/sj/zxfb/202405/t20240530_1956234.html
Caixin China General Manufacturing PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/5094520663264f78b8f832c93c36efa4
IMF Staff Completes 2024 Article IV Mission to the People’s Republic of China
https://www.imf.org/en/News/Articles/2024/05/28/pr24184-china-imf-staff-completes-2024-art-iv-mission
European Chamber event: From Legislation to Action: Implementing CSRD/CS3D In Your Business
https://www.europeanchamber.com.cn/en/upcoming-events/26087/From_Legislation_to_Action_Implementing_CSRD_CS3D_in_Your_Business_
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recoded on 5th June 2024.
(MUSIC)
RUI: On 29th May, China’s State Council released an action plan, setting specific targets for reducing energy consumption and carbon dioxide emissions by about 2.5 per cent per unit of GDP in 2024, and 3.9 per cent in 2025.
MARIANN: The action plan also listed targets for the proportion of non-fossil energy use, which is to reach 18.9 per cent of the total energy consumption this year, and 20 per cent in 2025. The State Council described ten major actions focusing on specific, key sectors, including petrochemicals, construction and transportation. The plan also called for advancing green energy development and enhancing the grid’s capacity to absorb renewable energy.
The European Chamber’s Business Confidence Survey 2024 found that even though the majority of European companies operating in China are also pursuing carbon neutrality, they face barriers that could prevent them from both meeting their corporate pledges and contributing fully to China’s decarbonisation goals. More than 80 per cent of respondents reported that they are decarbonising their energy use as the primary means of achieving carbon neutrality, making access to green energy an imperative. However, two fifths ranked limited access to renewable energy as the key challenge they face in their decarbonisation efforts, highlighting it as an area where urgent improvement is needed.
(MUSIC)
RUI: Manufacturing activity in China contracted again in May, after only two consecutive months of expansion, according to data released by the National Bureau of Statistics on 31st May.
MARIANN: The official manufacturing purchasing managers’ index, or PMI, stood at 49.5 points in May. A reading below 50 points indicates contraction. A breakdown of the headline data by company size revealed that large manufacturing companies were able to expand activity in May, with the rate of expansion even accelerating from the previous month. At the same time, activity contracted at small- and medium size manufacturing firms.
Subindices showed that while production still increased, demand dropped, and manufacturing companies were still lowering their staffing levels in May.
The non-manufacturing PMI stayed above the 50-point benchmark for the 17th consecutive month in May, and decreased only slightly compared to April. The drop was triggered by a deceleration in the expansion of activity in the construction sector. Services activity, meanwhile, grew at a faster pace than in the previous month.
(MUSIC)
RUI: A private survey conducted by Caixin and S&P Global showed there has been growth in manufacturing activity due to improving business conditions. The discrepancy with the official data from the statistics bureau is primarily due to the different sample size of the two surveys.
MARIANN: The Caixin manufacturing PMI rose to 51.7 points in May, which was the highest rate of growth recorded in the past 23 months. Production increased at the fastest pace since June 2022 as domestic and foreign demand both expanded. Stronger demand was partly attributed to heightened interest for new products. Surveyed manufacturers reported increased cost pressures, as input price inflation rose to a seven-month high in May.
(MUSIC)
RUI: In a statement released on 28th May, the International Monetary Fund revised its projection for China’s economic growth for 2024 and 2025, raising both by 0.4 percentage points from the forecasts issued in April.
MARIANN: According to the new projection, China’s GDP growth is set to reach 5 per cent this year, and 4.5 per cent next year. The upward revisions were attributed to strong economic indicators in the first quarter and recent policy measures, including those promoting high-quality growth by supporting innovation, and others aimed at mitigating property and local government risks. The IMF’s expectation for the medium-term, however, is that growth would decelerate to 3.3 per cent by 2029 as a consequence of the country’s ageing population and relatively slow productivity growth.
(MUSIC)
RUI: On 24th May, the European Council formally adopted the corporate sustainability due diligence directive—or CSDDD—which will come into effect 20 days after its publication in the EU’s official journal. The directive will require large companies to establish due diligence processes in order to ensure their entire operations—both up and downstream—are in line with EU human rights and environmental standards.
MARIANN: On 3rd June, the European Business Organisation’s Worldwide Network released its Position Paper on the new directive. The European Chamber took the lead role in drafting the paper, which contains 18 recommendations on how to effectively implement the CSDDD and create clear pathways for compliance by working closely with companies and governments in thirds markets.
RUI: The Chamber will organise events both offline and online where experts and industry players will share their insights on the CSDDD’s implications for business and provide useful tips on what actions your company should take to comply with the new directive. Stay tuned for more.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China calling on hotels to accept foreign guests;
- Utilised foreign direct investment and industrial profits from January to April;
- The EU’s corporate sustainability due diligence directive.
Also, the European Chamber will hold a breakfast roundtable on June 6th in Beijing. Listeners are welcome to attend the event, where Dr Scott Rozelle will share his perspective on China’s latest human capital trends.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China tells hotels not to refuse foreign guests
https://www.gov.cn/hudong/202405/content_6952770.htm
China’s utilised FDI, January-April (MOFCOM)
http://www.mofcom.gov.cn/article/xwfb/xwsjfzr/202405/20240503512491.shtml
China industrial profits, January-April (NBS)
https://www.stats.gov.cn/sj/zxfb/202405/t20240527_1956067.html
European Council adopts CSDDD
https://www.consilium.europa.eu/en/press/press-releases/2024/05/24/corporate-sustainability-due-diligence-council-gives-its-final-approval/
European Chamber event:
https://www.europeanchamber.com.cn/en/upcoming-events/26014/_Member_only_Breakfast_Roundtable_with_Dr_Scott_Rozelle_Human_Capital_and_China_s_Future_Growth_From_Demographic_Dividend_to_Talent_Dividend
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recoded on 29th May 2024.
(MUSIC)
RUI: On 24th May, China’s National Immigration Administration, along with the Ministry of Public Security and the Ministry of Commerce, jointly issued a statement calling on hotels across the country to accept foreign guests.
MARIANN: The statement was issued in response to online complaints from foreign travellers who reported having been refused by hotels on the grounds that the hotels did not have the necessary qualification to provide accommodation to foreign nationals or simply did not know what the required procedure was. As a next step, the intention is to guide the hotel industry to improve their service offerings to foreign nationals. To this end, the Ministry of Commerce has instructed the China Hotel Association to issue a relevant proposal. Concrete areas highlighted in the statement where improvements should be made were to offer English-language and accommodation registration services.
(MUSIC)
RUI: China’s actual use of foreign direct investment fell almost 28 per cent year-on-year in the first four months of 2024, despite a steep rise in the number of new foreign-invested enterprises established in the country during the same period.
MARIANN: According to data released by China’s Ministry of Commerce on 24th May, utilised FDI amounted to 360 billion yuan in the January-April period, nearly 28 per cent lower than in the same period last year. This was the sharpest decrease in China’s actual use of FDI recorded since January 2009. The ministry attributed the steep drop to the record-high base from 2023. However, the utilisation of FDI in the first four months of 2024 stood at the lowest level of the past four years.
Almost one third of the total utilised FDI was injected into the manufacturing sector, with over 45 billion yuan invested into high-tech manufacturing.
At the same time, almost 17 thousand new, foreign-invested firms were established in China, over 19 per cent more than during the same period last year.
(MUSIC)
RUI: Profits at larger industrial firms in China grew 4.3 per cent year-on-year in the first four-months of 2024, with the rate of increase unchanged from the first three months.
MARIANN: Data released by the National Bureau of Statistics on 27th May showed that industrial companies above the designated size realised over 2 thousand billion yuan worth of profits. A breakdown by company ownership type showed that equity-owned firms reported the highest level of total profits, exceeding 1,550 billion yuan. Foreign-invested companies ranked last with over 528 billion yuan in profits, despite the fact that their profits increased at the fastest pace among all company types, rising almost 17 per cent compared to the same period last year.
(MUSIC)
RUI: On 24th May, the European Council formally adopted the corporate sustainability due diligence directive—or CSDDD—which will require large companies to establish due diligence processes in order to ensure their entire operations—both up and downstream—are in line with EU human rights and environmental standards.
MARIANN: The directive will be introduced gradually over a three-year period and will eventually apply to EU-based companies with more than 1,000 employees and a worldwide annual net turnover over EUR 450 million. Member states will be required to implement the relevant regulations and administrative processes within two years from the date of the directive taking effect.
The European Chamber’s Business Confidence Survey 2024 found that more than 40 per cent of respondents expect that their company’s China operations will be impacted by the upcoming directive.
(MUSIC)
RUI: According to the World Bank, human capital has contributed over 36 per cent to China’s economic growth, and the number is still on a rise. However, there are several demographic trends impacting human capital in China, including a continuous drop in the country’s birth rate, an ageing population and a high level of youth unemployment.
MARIANN: Tou counter these trends, China is shifting from a demographic dividend to a talent dividend. However, the largest share of its labour force still has a rural hukou and over two thirds of them—more than 400 million individuals—have not received high school education.
RUI: Join our breakfast roundtable on 6th June in Beijing, when Dr Scott Rozelle, a researcher affiliated to Stanford University, will share his perspective on the latest human capital trends in China, and delve into questions such as: “How should China cultivate a diversified and multilevel human resource that meet the needs of economic and social development?” and “How should companies better leverage the window of opportunity to foster talent dividend to drive business growth?”
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Release of cross-border data transfer list in Shanghai’s Lin-gang Special Area;
- Macroeconomic indicators in April;
- China anti-dumping probe into chemical imports from the EU, US, Japan, Taiwan; and
- Rhodium Group and Atlantic Council’s China Pathfinder Q1 2024 update.
Also, listeners are invited to join the Annual General Meeting 2024 on 30th May online or in Beijing if you are a member of the European Chamber.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Shanghai-Lingang Special Area issues cross-border data transfer list
https://www.lingang.gov.cn/html/website/lg/index/government/file/1791283594794135554.html
https://www.lingang.gov.cn/html/website/lg/index/government/file/1791283590130069505.html
https://www.lingang.gov.cn/html/website/lg/index/government/file/1791283592713760769.html
China macroeconomic indicators, April (NBS)
https://www.stats.gov.cn/sj/zxfb/202405/t20240517_1955759.html
https://www.stats.gov.cn/sj/zxfb/202405/t20240517_1955758.html
China anti-dumping probe into chemical imports from EU, US, Japan, Taiwan (MOFCOM)
http://www.mofcom.gov.cn/article/zwgk/gkzcfb/202405/20240503510608.shtml
Rhodium Group/Atlantic Council – China Pathfinder: Q1 2024 Update
https://rhg.com/research/china-pathfinder-q1-2024-update/
Chamber event: Annual General Meeting 2024
https://www.europeanchamber.com.cn/en/upcoming-events/25943/_Members_Only_European_Chamber_Annual_General_Meeting_2024
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recoded on 22nd May 2024.
(MUSIC)
RUI: On 17th May, Shanghai’s Lingang New Area issued three whitelists of general data for cross-border data transfers, enabling firms in three industries operating in the pilot free-trade zone to transfer data in the listed categories abroad without the need for regulatory approval for a 12-month trial period.
MARIANN: The three selected industries are intelligent connected vehicle manufacturing, biopharmaceuticals, and public fund management. The three lists together cover 64 data types and detail specific application scenarios. While the listed categories will be exempt from security checks, data handlers will still be required to register the data on the free-trade zone’s public service management platform and complete the relevant filing and certification processes.
(MUSIC)
RUI: April macroeconomic data released by China’s statistics bureau on 17th May showed that year-on-year growth in industrial production picked up speed from March, but retail sales expanded at the slowest pace recorded since December 2022.
MARIANN: Production at China’s larger industrial firms increased 6.7 per cent in April compared to the same period last year. Growth was recorded in 36 out of the 41 surveyed sectors. While supply side growth is showing signs of stabilisation, domestic demand still seems to be fluctuating. The total value of retail sales in April rose 2.3 per cent year-on-year, with the pace of growth decelerating for the fourth consecutive month and sinking to a sixteen-month low. The breakdown of the data indicated that the drop in the pace of expansion was true for both sales of goods and catering, but catering sales still increased at a pace that was more than double that of the growth in sales of goods.
(MUSIC)
RUI: On 19th May, China’s Ministry of Commerce announced an anti-dumping probe into imports of certain chemicals from the European Union, the United States, Japan and Taiwan. The listed chemicals are frequently used in industries such as automotives and consumer electronics.
MARIANN: The announcement came only days after the US increased tariffs on Chinese imports of goods from what they called “strategic sectors” including solar panels, steel and electric cars. For its part, the EU has also launched several investigations into Chinese imports recently. One of the most high-profile was the anti-subsidy probe directed at Chinese EVs, followed by investigations into Chinese solar panel manufacturers suspected of disproportionately benefitting from government subsidies. Just last week, the EU initiated two separate anti-dumping probes into Chinese tinplate steel and wood flooring imports as well.
(MUSIC)
RUI: According to the latest update to the Rhodium Group’s and the Atlantic Council’s joint initiative, China Pathfinder, in the first quarter of 2024, China’s economic system showed signs that it is moving away from market economy norms.
MARIANN: The report highlighted market competition and portfolio investment openness as the areas where this divergence was observed during the first quarter. Among the issues listed were the supply-side policies disproportionately boosting industrial production amid rising global concerns over Chinese industrial overcapacity. The report cited that government support provided for failing enterprises in the form of subsidies or credit forbearances led to the share of loss-making industrial firms rising from 15% in 2021 to 22% in 2023. The report stressed that rather than looking at China’s official economic data, foreign observers have been carefully watching China’s policy trends, and expect further growth in the country’s net exports as a result. Therefore, it warned that China’s trade partners are likely to employ more trade defence measures, especially in areas including EVs, green energy equipment, steel and chemicals manufacturing.
(MUSIC)
RUI: Every year, the European Chamber holds its Annual General Meeting to provide an overview of its advocacy activities and other services it provides for its members. This year’s meeting will be held on 30th May in Beijing, but members will also have the option to join online.
MARIANN: At the meeting, EU Ambassador to China and Honorary President of the European Chamber, Jorge Toledo Albiñana, will deliver a keynote speech. Afterwards, Chamber President Jens Eskelund will present the Chamber’s Annual Report showcasing the key moments and achievements from 2023. Chairs of the Chamber’s six local chapters will also provide an overview of their respective chapters’ key achievements.
RUI: In addition, members will have the opportunity to cast their vote on a proposed amendment to the Chamber’s Articles of Association. The goal of the proposed amendment, as put forward by the Chamber’s Executive Committee, is to fulfil a requirement by the Ministry of Finance and ensure the continuation of the Chamber’s non-profit status. We encourage all our members to participate in the voting, as this amendment can only pass if at least two-third of the Chamber’s members cast their votes.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- April’s foreign trade data, consumer price index and producer price index;
- Draft regulations on lithium batteries with comments from Ms Wang Pei, Chair of the Automotive Working Group; and
- China’s new agreements with Serbia and Hungary.
Also, listeners are invited to join the Cybersecurity Conference 2024 in Shanghai on 21st May.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China foreign trade data, April (GAC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5862423/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5862614/index.html
China price indices, April (NBS)
https://www.stats.gov.cn/sj/zxfb/202405/t20240511_1955441.html
https://www.stats.gov.cn/sj/zxfb/202405/t20240511_1955442.html
Draft regulations on lithium batteries (MIIT)
https://www.miit.gov.cn/gzcy/yjzj/art/2024/art_689082865a5d4a23b831be368c8034ba.html
China’s new agreements with Serbia, and Hungary
http://rs.mofcom.gov.cn/article/jmxw/202405/20240503508540.shtml
https://www.mfa.gov.cn/eng/zxxx_662805/202405/t20240510_11302186.html
European Chamber event: Cybersecurity Conference 2024
https://www.europeanchamber.com.cn/en/upcoming-events/25868/Beyond_Cybersecurity_Conference_2024_Navigating_the_Digital_Frontier
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recoded on 15th May 2024.
(MUSIC)
RUI: Data released by China’s Customs Administration on 9th May indicated a slight recovery of exports from the previous year for April, but a notable change in the destination of exports. At the same time, the value of imports grew at the fastest pace in over two years.
MARIANN: The value of exports in April increased 1.5 per cent year-on-year. This uptick comes after a sharp fall in March. The latest improvement could largely be attributed to a significant increase of China’s exports to developing countries. The cumulative value of exports to both Vietnam and Brazil in the first four months of 2024 increased by over twenty per cent compared to the same period in 2023. Meanwhile, the value of exports to the European Union decreased 4.8% year-on-year in the January-April period.
The value of imports expanded 8.4 per cent in April from a year ago, when a sharp drop was recorded. Imports from the EU contributed slightly over 10 per cent of China’s overall imports in April. The largest import source was the Association of Southeast Asian Nations, from where almost 15 per cent of China’s imports came in April.
(MUSIC)
RUI: On 8th May, the Ministry of Industry and Information Technology published draft rules on the lithium battery sector aimed at improving the sustainability of lithium batteries.
MARIANN: The draft rules attempt to increase the quality of lithium batteries produced by the booming sector by raising minimum standards for energy density, lifespan, and other specifications that affect the sustainability of lithium batteries.
RUI: Wang Pei, Chair of the European Chamber’s Automotive Working group commented on the announcement by highlighting that most standards listed in the new version of the guidelines are still lower than those already met by the majority of EV batteries available on the market. She also highlighted the focus on the sustainability of EV batteries.
Wang Pei: With the development of the NEV market, the government needs to upgrade the relevant basic requirements to keep pace with the NEV and battery development, and in order to address the climate changes and in response to the decarbonization targets, there is decarbonization requirement, for example, carbon footprint is mentioned in the new version of the directive. It is not a mandatory directive, but a guideline to the battery industry technology innovation and quality improvement.
(MUSIC)
RUI: Consumer prices continued to increase slightly in April, while the fall in producer prices slowed somewhat compared to the two previous months.
MARIANN: China’s consumer price index rose 0.3% year-on-year, which was higher than analysts had projected and also higher than the uptick recorded in the previous month. Over the past year, consumer prices have fluctuated between deflation and inflation. While the index showed a continuous increase in prices for the past three consecutive months, the year-on-year growth rate stayed below 1 per cent against a relatively low base from last year.
The producer price index declined 2.5 per cent from the same period last year. While the rate of decline was slightly lower than in the previous two months, it still indicated a somewhat steeper drop in prices than analysts had expected. Producer prices in China have been falling since October 2022.
(MUSIC)
RUI: Chinese President Xi Jinping concluded a 5-day trip to France, Serbia and Hungary on 10th May 2024.
MARIANN: This was the Chinese’s leader’s first trip to the European continent since 2019. The visit saw the signing of 28 and 18 new cooperation deals with Serbia and Hungary, respectively. Most of these cooperation deals for both countries covered agriculture, media, science and education, and tourism. China also signed new deals with Hungary to cooperate on infrastructure and nuclear energy. Chinese car manufacturer Great Wall Motors is reportedly considering building a factory in Hungary, following previous announcements by car manufacturer BYD and battery-maker CATL of plans to build factories in the country.
(MUSIC)
RUI: China has recently introduced key policies in the fields of cross-border data transfer, cybersecurity and Artificial Intelligence. For instance, unveiled in August 2023, the inaugural Generative Artificial Intelligence Service Management Interim Measures outline regulations governing AI services, including data training, manual annotation, and user information.
MARIANN: Released in December 2023, the draft Cybersecurity Incident Reporting Management Measures established reporting standards and guidelines for handling cybersecurity breaches. Most recently, the new rules for cross-border data transfer were launched in March.
RUI: Join us in Shanghai on 21st May for the European Chamber’s Cybersecurity Conference 2024, that will bring together professionals and experts to share their insights on the future of China’s data security landscape and possible solutions for foreign companies to adopt the right approaches to cybersecurity and compliance.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- President Xi’s visit to Europe;
- Labour Day outbound tourism;
- April manufacturing purchasing manager’s index;
- Industrial profits in the first quarter of 2024;
- Politburo’s measures to stimulate the economy;
Also, listeners are invited to join the Business Confidence Survey 2024 launch online on 10th May to find out how European companies perceive the business environment in China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
President Xi’s visit to Europe (France, Serbia, Hungary), French government strategic industry contract on electric vehicles
https://www.mfa.gov.cn/eng/zxxx_662805/202405/t20240507_11293738.html
https://ec.europa.eu/commission/presscorner/detail/en/statement_24_2464
https://www.bloomberg.com/news/articles/2024-05-05/france-ramps-up-electric-vehicle-ambition-as-xi-arrives-in-paris?srnd=homepage-asia
Labour Day tourism recovery
https://cn.chinadaily.com.cn/a/202405/02/WS6632df3da3109f7860ddc011.html?ivk_sa=1023197a
April Manufacturing PMI, Statistics Bureau and Caixin
https://www.stats.gov.cn/sj/zxfb/202404/t20240430_1955162.html
https://pmi.caixin.com/upload/CN_Manufacturing_ENG_2404_PR.pdf
Statistics Bureau reports industrial profits increase year on year in the first quarter of 2024, but fell year on year in March
https://www.stats.gov.cn/sj/zxfb/202404/t20240427_1955093.html
Politburo’s measures to stimulate the economy, setting date for third plenum
https://english.news.cn/20240430/1fb81d6afc8943e5985bb6c66c923804/c.html
European Chamber event: BCS 2024 launch
https://www.europeanchamber.com.cn/en/upcoming-events/25874/_Hybrid_European_Business_in_China_Business_Confidence_Survey_Launch_2024
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: China’s president Xi Jinping started his five-day trip to Europe on 5th May. During the trip, he is scheduled to visit leaders in France, Hungary and Serbia.
MARIANN: President Xi met with French President Emmanuel Macron and European Commission President Ursula von der Leyen on 6th May in Paris. During the meeting, President von der Leyen explained the EU’s motives behind de-risking, highlighting that the main goal of this strategy is to improve supply chain resilience by tackling excessive dependencies. She highlighted the need for reciprocal market access and called on the Chinese Government to address overcapacity in China’s manufacturing sector.
RUI: In September 2023, the European Commission launched a probe into electric vehicle imports from China. The probe is expected to conclude in the second half of this year. A day before Xi’s visit, French Finance Minister Bruno Le Maire signed a “strategic sector contract”, committing France to significantly increasing sales of EVs by 2027. Le Maire also said BYD and other Chinese automotive manufacturers were welcome to build factories in France.
(MUSIC)
RUI: Chinese outbound tourism showed signs of recovery during the five-day Labour Day holiday.
MARIANN: China Daily reported that overseas flight bookings on 1st May were 20% higher than 2019. While destinations in Asia saw the most recovery since before the pandemic, European destinations were close behind. Outbound trips from China to Spain, Croatia, Ireland, Hungary and the United Kingdom increased by over 10% from the same period in 2019. Mobile payment operator Alipay also reported a 77% increase in outbound payments during the holiday compared to last year.
(MUSIC)
RUI: China’s official manufacturing purchasing manager’s index (or PMI) indicated an increase in manufacturing activity during April, according to data released by the National Bureau of Statistics.
MARIANN: This was the second month in a row that manufacturing activity expanded, after contracting from October 2023 to February 2024. Subindices for production and new orders all surpassed the 50-point benchmark separating growth from contraction. However, the subindex for employment stayed under the 50-point benchmark for over a year, signalling that manufacturers have been continuing to reduce their staffing levels.
A private survey conducted by Caixin and S&P Global also showed growth in manufacturing activity, expanding at the fastest rate recorded in 14 months. The discrepancy between the two sets of data is primarily due to the different sample size of the two surveys.
(MUSIC)
RUI: Profits of larger industrial firms in China increased by 4.3% year-on-year in the first quarter of 2024.
MARIANN: Data released by China’s Statistics Bureau on 27th April revealed that while profits in the first quarter increased from the same period last year, March profits fell year-on-year. A breakdown of the data indicated that profits of electronics and automotive manufacturers had increased year-on-year in the first quarter by 82.5% and 32%, respectively. Coal producers’ profits fell by 33.5% year-on-year in the first quarter.
(MUSIC)
RUI: The Political Bureau of the CPC Central Committee, or the Politburo, China’s 24-member main decision-making body, met on the 30th of April to discuss China’s current economic situation.
MARIANN: In the meeting, members highlighted ongoing economic challenges, including insufficient demand and high operational costs. The members proposed several fiscal and monetary policies to improve the business environment, including issuing ultra-long-term bonds and adjusting interest rates and reserve requirement ratios. Measures to boost consumer demand were also addressed in the meeting, including initiating trade-ins of consumer goods and stimulating private investment.
A key outcome of the meeting was that the third plenary session of the CPC Central Committee was set for July 2024. This session, which is typically scheduled for the year after the appointment of a new central committee, has historically focused on broad-scale economic reforms. The session was expected to be held in late 2023 but was postponed without explanation.
(MUSIC)
RUI: Instead of the strong economic rebound that businesses had hoped for, China’s re-opening in 2023 brought more uncertainties for European firms operating in the country. Deeper structural issues like sluggish demand, high levels of local government debt, and continued challenges in the real estate sector, continue to weigh on both domestic and foreign companies’ prospects in China.
MARIANN: With optimism over the near- and medium-term outlook fading, some companies have already started to re-evaluate their engagement with the Chinese market. Some strategies that multinationals are pursuing, including cost-cutting and toning down expansion plans, could potentially add to China’s economic woes and set a negative cycle in motion. If China is to rebuild investor confidence, it needs to urgently address the regulatory and market access barriers preventing European companies from contributing fully to its economy.
RUI: Join us on 10th May online or in person in Beijing for the official launch of the Business Confidence Survey 2024 to find out how European companies perceive the business environment in China. European Chamber president Jens Eskelund will present the key findings of the survey. Following this, the chairs of the Chamber’s six regional chapters will provide an overview of business confidence among European companies in their respective localities.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s 2023 environmental targets;
- EU’s new regulation to ban products with forced labour;
- Foreign direct investment data for Q1;
- Capital market reforms;
Also, listeners are invited to join an event on 29th April in Beijing or online to understand Chinese overcapacity.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
2023 environmental targets (State Council)
https://english.www.gov.cn/news/202404/23/content_WS6627b2edc6d0868f4e8e658f.html
EU to ban products made with forced labour
https://www.europarl.europa.eu/news/en/press-room/20240419IPR20551/products-made-with-forced-labour-to-be-banned-from-eu-single-market#:~:text=Manufacturers%20of%20banned%20goods%20will%20have%20to%20withdraw,company%20eliminates%20forced%20labour%20from%20its%20supply%20chains
2024 Q1 FDI (MOFCOM)
http://www.mofcom.gov.cn/article/xwfb/xwrcxw/202404/20240403504349.shtml
Li Qiang on capital market reforms
https://english.www.gov.cn/news/202404/22/content_WS66265028c6d0868f4e8e64e2.html
European Chamber event: Bursting at the Seams – Understanding Chinese Overcapacity
https://www.europeanchamber.com.cn/en/upcoming-events/25799/_Hybrid_Bursting_at_the_Seams_Understanding_Chinese_Overcapacity
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: According to the State Council’s official report, China met all its annual targets for environmental indicators in 2023, as well as the relevant deadlines of the 14th Five-Year Plan.
MARIANN: Improvements were recorded in several key areas, including air and water quality. For instance, in the Beijing-Tianjin-Hebei region, the average concentration of PM2.5 dropped 2.3 per cent compared to 2022. Another positive highlight was that the water quality in the Yellow River Basin improved from good to excellent. The report acknowledged some of the key challenges ahead of China’s efforts at environmental protection, including the high energy consumption of its industries, which leads to high carbon emissions due to the predominance of coal in the country’s energy mix. The 2024 target for reducing carbon emissions per unit of GDP was set at about 3.9 per cent. The report pointed out that in order to reach China’s green targets, environmental legislation and enforcement of relevant regulations will both need to be strengthened.
RUI: The European Chamber has been actively highlighting that European companies operating in China are well-placed to contribute to China’s efforts at decarbonisation. This is partly due to their experience in reducing their carbon footprint in other markets, and partly because they have made globally binding pledges to achieve carbon neutrality well ahead of China’s 2060 deadline. However, European companies face a number challenges currently preventing them from greening their operations in China. These include limited access to renewable energy, a lack of clear policy guidance, a scarcity of necessary technology and issues related to China’s emissions trading system.
(MUSIC)
RUI: On 23rd April, the European Parliament voted in favour of a new regulation that allows the European Union to ban products from its Single Market that were made using forced labour.
MARIANN: According to the regulation, member state authorities and the European Commission will have the right to investigate goods, supply chains and manufacturers suspected of relying on forced labour, based on factual and verifiable information. If a product is deemed to have been made with forced labour it will no longer be permitted to be sold on the EU market but may be allowed back once the manufacturer has proved that it has eliminated forced labour from its supply chains.
The text of the regulation still has to be approved by the European Council before it is published in the EU’s Official Journal. Member states will then have to start enforcing it within three years of its publication.
(MUSIC)
RUI: In the first quarter of 2024, China’s actual use of foreign direct investment dropped more than 26 per cent year-on-year, amounting to over 300 billion yuan.
MARIANN: Data released by China’s Ministry of Commerce on 19th April revealed that while the year-on-year decrease in the actual use of FDI was still significant, the first quarter total showed an almost 42 per cent uptick compared to the final quarter of 2023. A breakdown of the data indicated that over a quarter of FDI in the first quarter—or more than 81 billion yuan—was utilised in the manufacturing sector. Almost half of this amount went into high-tech manufacturing. The Ministry’s statement highlighted that within high-tech manufacturing, utilisation of FDI in the medical equipment manufacturing sector increased almost 170 per cent year-on-year. However, the actual figures were not disclosed.
(MUSIC)
RUI: Chinese Premier Li Qiang called for strengthening oversight of the capital market, echoing the key points listed in a recent guideline issued by the State Council on the matter.
MARIANN: Li Qiang was presiding over a State Council study session on 22nd April, which focused on capital market reforms. The Premier called for efforts to accelerate steady and healthy development of the capital market, for instance through improving systems for listing, trading and delisting. He also highlighted the need to improve the quality of listed companies and to introduce stricter punishments for illegal and non-compliant activities.
(MUSIC)
RUI: Throughout the past several months, various actors have been sounding alarm bells over overcapacity in several key sectors in China. The issue has already prompted actions from some of China’s trade partners, including the investigation into Chinese-made electric vehicles launched by the European Commission in late 2023. In China, policymakers have, to some extent, already acknowledged that subsidisation and the current structural rebalancing in investments could have negative effects on manufacturing.
MARIANN: Despite this acknowledgement, in March, China’s National People’s Congress concluded with an explicit focus on industrial policy favouring high-tech industries, and very little fiscal support for household consumption. There are growing concerns that this policy mix could potentially exacerbate the growing imbalance between domestic supply and demand.
RUI: Join us on 29th April online or in person in Beijing to learn fresh insights from the Rhodium Group on China’s overcapacity outlook and its bearing on the country’s trade relations with its key partners. European industry representatives will also share their on-the-ground experience dealing with overcapacity in their respective sectors.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again after the Labour Day holiday.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Gross Domestic Product (GDP) and key economic indicators in the first quarter of 2024;
- Foreign trade data in March;
- Producer and consumer prices indices in March;
- German Chancellor Scholz’ visit to China
- New guidelines on strengthening capital market regulation.
From the Chamber’s side, the latest issue of EURObiz is released and available to download.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
2024 Q1 key economic indicators (NBS)
https://www.stats.gov.cn/sj/zxfb/202404/t20240416_1954591.html
Foreign trade data, March (GAC)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5810618/index.html
Official price indices, March (NBS)
https://www.stats.gov.cn/sj/zxfb/202404/t20240411_1954447.html
https://www.stats.gov.cn/sj/zxfb/202404/t20240411_1954446.html
Scholz-Xi meeting
http://www.chinatoday.com.cn/ctenglish/2018/zdtj/202404/t20240417_800363206.html
State Council’s new guidelines on strengthening capital market regulation
http://www.csrc.gov.cn/csrc/c100028/c7473562/content.shtml
EURObiz magazine March/April 2024
https://www.europeanchamber.com.cn/en/eurobiz-magazine
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: According to official data released by China’s National Bureau of Statistics on 16th April, the country’s economy expanded 5.3 per cent in the first quarter compared to the same period last year.
MARIANN: China’s gross domestic product totalled at 29.6 trillion yuan in the first three months of 2024, with the year-on-year growth outpacing economists’ forecasts. One key factor that helped the economy regain some momentum in the first quarter was a sharp uptick in exports in the January-February period. As external demand picked up, industrial production also expanded, growing over 6 per cent year-on-year in the first quarter. However, the March data showed a deceleration in industrial production growth, with the rate falling well below the expected level.
To ensure sustainable economic growth, China will need to address a list of structural issues, including weak domestic consumption. Retail sales data for March indicated a continued slowdown in growth in this area. At 3.1 per cent, the rate of growth was the lowest recorded since last July.
(MUSIC)
RUI: China’s March foreign trade data indicated year-on-year drops in both exports and imports.
MARIANN: In dollar denominated terms, the country’s total value of exports fell 7.5 per cent compared to the same period last year, which is the sharpest decline recorded since last August. The drop is partly due to the high base last year, as China’s export value surged almost 15 per cent year-on-year in March 2023. However, the rate of decline was more than twice that which analysts had projected.
The value of imports also dropped compared to a year ago, following two consecutive months of growth.
The European Union remained China’s second largest trade partner in the first quarter, however, the total trade value between the two fell 6.5 per cent year-on-year, with the value of China’s imports from the EU sinking at a faster pace than its exports to the bloc.
(MUSIC)
RUI: Producer prices in China continued their year-on-year decline for the 18th consecutive month in March, while the increase in consumer prices weakened substantially from the previous month.
MARIANN: Prices that producers charge their customers dropped 2.8 per cent compared to the same period last year. The rate of decrease accelerated to the fastest pace recorded since last November. Meanwhile, the year-on-year growth in customer prices dipped to 0.1 per cent, primarily due to a decrease in prices of food and travel-related services.
(MUSIC)
RUI: German Chancellor Olaf Scholz met with Chinese President Xi Jinping in Beijing on 16th April, during his three-day visit to China, and discussed key global and bilateral issues, as well as opportunities for strengthening cooperation in certain areas.
MARIANN: Scholz assured Xi of Germany’s willingness to contribute to the development of EU-China relations and stressed his country’s opposition to protectionism and its support for free trade. He highlighted several areas for advancing cooperation between the two sides, including people-to-people exchanges in education and culture, and the fight against climate change. Xi pointed out that the intertwined nature of their supply chains has led to an interdependence between the Chinese and German markets, therefore maintaining stable bilateral relations warrants continued cooperation between the two. He stressed that their mutually beneficial cooperation brings more opportunities for the future rather than risks.
(MUSIC)
RUI: On 12th April, the State Council issued a guideline aimed at strengthening the regulation as well as the resilience of China’s capital markets.
MARIANN: The document calls for strict oversight of the entry process through security issuance and listing, and tightened supervision of listed firms. The guidelines also highlight the need to intensify efforts to crack down on illegal activities such as fraudulent issuance or securities and futures malpractice.
(MUSIC)
RUI: The latest issue of the Chamber’s bimonthly magazine EURObiz explores a number of areas relevant to European businesses’ operations in China. Featured articles delve into topics such as how the EU’s Foreign Subsidies Regulation has not had the impact that many expected and how the bloc is taking a series of measures to protect its economic security.
MARIANN: The March/April edition of EURObiz is now available to download for free from the Chamber’s website.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- State Administration of Foreign Exchange circular on optimising the administration of foreign exchange business;
- US Treasury Secretary Yellen’s visit to China;
- SME development index in the first quarter of 2024;
- Qingming Festival holiday domestic tourism data.
From the Chamber’s side, on 9th April, a delegation met with Ana Gallego Torres, Director-General of the European Commission’s Directorate-General for Justice and Consumers in Hangzhou.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
SAFE circular on further optimising the Administration of Foreign Exchange Business
https://www.safe.gov.cn/safe/2024/0407/24204.html
US Treasury Secretary’s visit to China
https://english.www.gov.cn/news/202404/07/content_WS661266efc6d0868f4e8e5d21.html
2024 Q1 SME Development Index (China Association of Small and Medium Enterprises)
https://www.yicai.com/news/102058003.html
Qingming Festival holiday domestic tourism data (MCT)
https://www.mct.gov.cn/whzx/whyw/202404/t20240406_952075.htm
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 7th April, the State Administration of Foreign Exchange released a circular including six new measures aimed at optimising the administration of foreign exchange business.
MARIANN: The registration process for firms engaged in foreign currency trade will be simplified, as companies will be able to register directly through the bank handling their foreign exchange business, without having to have their registration approved by the State Administration of Foreign Exchange. Small and micro cross-border e-commerce enterprises may even be exempted from registration. The new measures will take effect on 1st June, and will also facilitate trade settlement and payment procedures for companies operating in areas under special customs supervision.
RUI: Commenting on the new measures is Mario Huang Yu, chair of the Chamber’s Banking and Securities Sub-working Group.
Mario Huang Yu: The new measure will take effect from 1st of June and will facilitate foreign trade business and settlement and related payment process. Overall, the new measure aims to encourage and facilitate foreign trade business between China and the rest of the world. Especially it aims to simplify the procedure for newly-founded trading companies.
(MUSIC)
RUI: US Treasury Secretary Janet Yellen held a series of meetings with Chinese top officials and business representatives during her four-day visit to China, and concluded that the US-China bilateral relationship is “on stronger footing” than a year ago.
MARIANN: While emphasising that the US does not seek to decouple from China, Secretary Yellen expressed concerns over the potential spillover effect that some of China’s macroeconomic challenges, such as weak household consumption and industrial overcapacity could have on both the American and the global economy. The Chinese side pushed back on allegations that government support is disproportionately provided to certain industrial sectors, including new energy, resulting in underpriced Chinese exports. Chinese Premier Li Qiang called on the US side to view the issue objectively, and emphasised the positive contributions that the Chinese new energy industry could provide for global decarbonisation efforts.
The European Chamber has also warned that China’s supply-side policies have been a contributor to the significant trade imbalances the country has accumulated with both the EU and the US. A step in the right direction would be if Chinese policymakers shifted their focus to providing support for the demand side, which could also help provide some momentum for China’s economic recovery.
(MUSIC)
RUI: The performance of small and medium-sized enterprises in China improved somewhat in the first quarter of 2024, with the SME development index reaching the highest level recorded since the first quarter of last year.
MARIANN: According to findings from a survey among 3,000 SMEs from eight major industries, while activity strengthened compared to the previous three quarters, the SME development index still remained below the 100-point critical value of prosperity. The China Association of Small and Medium Enterprises, which conducted the survey, attributed the uptick in part to an acceleration in production after the Chinese New Year holiday as well as to the positive impact of some of the policy announcements at the Two Sessions. Surveyed companies’ market expectations, business confidence and willingness to invest all showed improvements from the previous quarter. However, as costs and competitive pressure both increased, even as SMEs reported higher revenues, a rise in profits did not follow. Consequently, the subindex for efficiency remained at a historically low level, falling further compared to the previous quarter in five of the eight surveyed industries.
(MUSIC)
RUI: According to China’s Ministry of Culture and Tourism, domestic tourism during the three-day long Qingming or Tomb Sweeping Festival holiday surpassed pre-pandemic levels.
MARIANN: In the three days between 4th and 6th April, the number of domestic trips reached 119 million, which was 11.5 per cent higher than during the same period in 2019. Domestic tourists spent almost 54 billion yuan, up close to 13 per cent from the 2019 Qingming Festival holiday.
(MUSIC)
RUI: On 9th April, a European Chamber delegation led by Carlo d’Andrea, Chamber vice president and chair of the Shanghai Chapter, met with Ana Gallego Torres, Director-General of the European Commission’s Directorate-General for Justice and Consumers in Hangzhou.
MARIANN: The European Chamber’s delegates gave an overview of the business environment in China for European companies. The discussion primarily focussed on key issues related to corporate sustainability due diligence, cross-border data transfer and product safety. Representatives of six industries gave an update of recent regulatory developments in these areas and provided tangible examples of the improvements as well as the challenges that these developments have prompted.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s net foreign direct investment in 2023;
- China’s official purchasing managers index (PMI) in March;
- Caixin China general manufacturing PMI in March;
- Profits at larger industrial companies in China in January and February.
From the Chamber’s side, an advocacy success has been achieved in food industry. Packaging requirements for five special dietary food categories are optimised following the Chamber’s recommendations.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China 2023 net FDI (Balance of Payments), SAFE
https://www.safe.gov.cn/en/2024/0329/2192.html
China official PMI, March, NBS
https://www.stats.gov.cn/sj/zxfb/202403/t20240329_1954065.html
Caixin China General Manufacturing PMI, March
https://www.pmi.spglobal.com/Public/Home/PressRelease/1ed2224c655e44da9b2bbaa347a55475
Industrial profits, 2024 January-February, NBS
https://www.stats.gov.cn/sj/zxfb/202403/t20240327_1953907.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 29th March, the State Administration of Foreign Exchange released revised data on China’s net foreign direct investment in 2023.
MARIANN: While the data was revised up from the preliminary number published late February, at 42.7 billion US dollars, China’s net FDI in 2023 was still the lowest level recorded since China joined the World Trade Organization in the year 2000. By comparison, the 2022 figure was almost four and a half times higher. As net FDI calculated by the State Administration of Foreign Exchange also includes retained earnings by foreign enterprises in China, the actual figure for FDI inflows into the country could be even lower. However, some of the decline in FDI can be explained by the RMB’s depreciation and an increase in interest rates in Europe and the United States. The combined impact of these trends is that multinational companies with excess cash and return earnings in China have been increasingly transferring those funds overseas to earn a higher investment return compared to investments in China.
(MUSIC)
RUI: According to official data released by the National Bureau of Statistics on 31st March, manufacturing activity in China expanded for the first time in half a year.
MARIANN: The manufacturing purchasing managers index, or PMI, stood at 50.8 points in March. Readings above 50 points indicate growth. The uptick was primarily due to a sharp rebound in new orders, with an especially strong surge in new export orders. The rise in demand had a boosting effect on production. Despite these improvements, however, manufacturing firms remained cautious about hiring, with staffing levels in continuous decline for over a year.
Meanwhile, the non-manufacturing PMI indicated that growth in activity accelerated in May in the construction and services sectors. The breakdown of the data, however, showed that demand remained muted, and employment levels shrank further from February.
(MUSIC)
RUI: A private survey conducted by Caixin and S&P Global also showed growth in manufacturing activity in March.
MARIANN: The March reading marked the fifth consecutive month of improvement in operating conditions in the sector. Wang Zhe, senior economist at Caixin Insight Group, attributed the positive findings to the effect of policies introduced in early 2024 to stabilise growth. However, he warned that the economy still faces downward pressures primarily stemming from the persistence of subdued employment, low prices and insufficient demand.
(MUSIC)
RUI: Profits at larger industrial companies in China increased over 10 per cent during the first two months of 2024 compared to the same period last year.
MARIANN: Despite the year-on-year increase however, the actual figure of 914 billion yuan was the still the second lowest recorded for the January-February period since 2019. A breakdown of the data by ownership structure revealed that equity-owned industrial firms recorded the highest profits during the first two months of the year. Foreign-owned companies profits increased by over 30 per cent year-on-year, but even so, the total amount remained under the levels recorded during the same periods in 2022 and 2021.
(MUSIC)
RUI: To accelerate the promotion of green and low-carbon development, the State Administration for Market Regulation released a set of restrictions on excessive packaging for food and cosmetics products in 2021, which came into effect on 1st September 2023.These standards specify the allowed ratios for empty spaces within the packaging of all food and cosmetics commodity categories.
MARIANN: The set ratios were unrealistically small for the special dietary food category, which includes infant formula, food for special medical purpose and sport nutrition foods. While the technical requirements for the production and packaging of these products are exactly the same as those for ‘ordinary’ food products, they were given stricter parameters. For instance, the ratio for ordinary cookies was set at almost seven times higher than for cookies for infants and young children.
RUI: If manufacturers of special dietary foods had been compelled to follow these standards, they would have faced severe compliance costs, as well as difficulties being listed in online and offline markets. Furthermore, consumers who rely on certain products, especially due to existing medical conditions, would likely have lost access to these products.
MARIANN: The European Chamber has for a long time been engaging with the relevant authorities to highlight the risks and potential negative impacts of these requirements. On 29th March, the State Administration of Market Regulation issued an amendment to the relevant document, which, following the Chamber’s recommendations, optimised the requirements for five special dietary food categories.
(MUSIC)
RUI: Thanks for listening, and don’t forget to tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- Final version of the Provisions on Regulating and Promoting Cross-border Data Flows;
- Actual use of foreign direct investment in January and February;
- State Council’s action plan to attract foreign investment;
- China Development Forum 2024.
Also, listeners are invited to attend the half-day Sports Summit in Shanghai on 9th April, to analyse various aspects of the fast-developing sports landscape in China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
CAC: Facilitation and Specification of Regulations for Cross-border Data Flows
https://www.cac.gov.cn/2024-03/22/c_1712776611775634.htm
European Chamber Flash Survey on the Impact of China’s Data Regulations on European Business
https://www.europeanchamber.com.cn/en/publications-archive/1170/Flash_Survey_The_impact_of_China_s_data_regulations_on_European_business
MOFCOM: actual use of FDI, January-February
http://www.mofcom.gov.cn/article/xwfb/xwrcxw/202403/20240303485190.shtml
State Council’s action plan to attract foreign investment
https://english.news.cn/20240319/cf218662696c4f8f9e706ceb09139901/c.html
China Development Forum 2024
https://www.chinadaily.com.cn/a/202403/24/WS65ffba28a31082fc043be560.html
European Chamber event: 1st China-Europe Sports Summit ‘Moving Together’
https://www.europeanchamber.com.cn/en/upcoming-events/25504/The_1st_China_Europe_Sports_Summit_Moving_Together
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 22nd March, the Cyberspace Administration of China released the final version of its Provisions on Regulating and Promoting Cross-border Data Flows, which is expected to lessen the administrative burdens associated with cross-border data transfers.
MARIANN: This announcement was something that multinational companies were eagerly awaiting ever since the CAC issued the draft version of the document last September. The European Chamber had provided feedback on the draft version, and is pleased to see that some of our members’ recommendations were taken into consideration for the final document. These include the increase of the thresholds for signing standard contracts or applying for certification, and the list of exemptions to relevant obligations.
Building on this positive start, the European Chamber believes the next steps should be to narrowly define the scope of key terms, including ‘important data’, avoid an expansive interpretation of ‘sensitive personal information’, which is still subject to the old rules, and allow legitimate business needs to be taken into consideration in applying the various ‘necessity tests’ required by the provisions.
RUI: Last October, the European Chamber conducted a flash survey among its members to find out the extent to which they are impacted by China’s cross-border data transfer regulations and in which areas they are in need further improvements to the regulatory framework. The report summarising the findings can be downloaded for free from our website.
(MUSIC)
RUI: According to China’s Ministry of Commerce, in the first two months of 2024, China’s actual use of foreign direct investment dropped almost 20 per cent compared to the same period last year.
MARIANN: Utilised FDI in the January-February period amounted to 215 billion yuan. One third of it was invested into the high-tech sector, with high-tech manufacturing using 28 billion yuan of FDI in the first two months of the year. The Ministry’s data also suggested that during the same period, more than seven thousand new foreign-invested companies were set up around the country, a 35 per cent increase year-on-year.
(MUSIC)
RUI: On 19th March, the State Council released an action plan listing 24 measures aimed at boosting foreign investment.
MARIANN: The action plan came seven months after the State Council’s Opinions, which also contained 24 points on attracting foreign investment. The two documents overlap in certain areas and have discrepancies in others. For instance, the action plan includes points on facilitating the application and renewal processes for visas and residence permits, which was not mentioned in the Opinions. If implemented in a timely, coordinated and consistent manner, these sets of measures would go a long way to improving business confidence.
(MUSIC)
RUI: On 24th and 25th March, the annual China Development Forum was held in Beijing, providing a platform for international business leaders and high-level representatives of international organisations to meet with Chinese government officials.
MARIANN: Chinese Premier Li Qiang gave a keynote speech at the opening ceremony, highlighting the successes of 2023, while also acknowledging the challenges that the country has been facing in its economic recovery. While sobering, it is important that problems are not overlooked or ignored. Notably, a large part of the Premier’s speech was dedicated to addressing matters of concern to domestic and foreign enterprises, including the need to support consumption as a driver of the Chinese economy.
(MUSIC)
RUI: European sports companies in China are keen to support China’s community goals by promoting healthy lifestyles, sports activities and wellness to create a better life for all.
MARIANN: The 1st China-Europe Sports Summit will be held as a follow-up step to the signing of a Memorandum of Understanding between the European Chamber and China’s General Administration of Sports with the goal of building bridges between sports communities in Europe and China.
RUI: Join us in Shanghai on 9th April for the half-day summit will see experts analyse various aspects of the fast-developing sports landscape in China, with panel discussions featuring representatives from European sports companies, sports opinion leaders and government representatives. The event will delve deeper into trending topics of the industry, such as the development of the winter sports, youth sports and motorsports industries. Furthermore, participants will offer their views on the current landscape of the China market as well as the wider ecosystem of the sports industry.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
On 20th March, the European Chamber in partnership with China Macro Group published the report Riskful Thinking: Navigating the Politics of Economic Security. In the special edition, we have asked the European Chamber’s current president Jens Eskelund and three former presidents Joerg Wuttke, Mats Harborn and Davide Cucino to share their insights on the topic of risk management from the perspectives of business and policy.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Chamber report: Riskful Thinking: Navigating the Politics of Economic Security
https://www.europeanchamber.com.cn/en/riskful-thinking-report
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 20th March, the European Chamber in partnership with China Macro Group published the report Riskful Thinking: Navigating the Politics of Economic Security.Based on in-depth Chamber member interviews and extensive research, the report details the different approaches adopted by the European Union, China and the United States for managing perceived threats to their respective economies. It also looks into the actions that European businesses are taking to build resilience into their China operations and mitigate a growing number of risks.
MARIANN: For today’s special edition of the China ShortCuts podcast, we have asked the Chambers current and three former presidents to share their insights on the topic of risk management from the perspectives of business and policy.
RUI: We asked Chamber President Jens Eskelund to introduce the main risks that European companies are facing in China.
JENS:
MARIANN: Former President Joerg Wuttke explained some of the strategies European companies are adopting in order to mitigate risk and build resilience into their operations.
JOERG:
RUI: Former President Davide Cucino provided an overview of the purpose of the EU’s de-risking policy.
DAVIDE:
MARIANN: Former President Mats Harborn said, that despite China’s increased focus on economic security, there are still opportunities for European companies in the Chinese market.
RUI: To learn more about the topic, read our latest report, which is now available to download for free on the Chamber’s website.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- China’s foreign trade data in January and February;
- Visa-free travel trial to more European countries;
- Producer price index and consumer price index in February.
Also, listeners are invited to attend the launch of the Chamber’s latest publication, dedicated to the topic of risk management at both the political and corporate level, in Beijing on 20th March.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China foreign trade data, January-February
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5716196/index.html
China extends visa-free policy trial to six more European countries
https://english.news.cn/20240307/ff74fc0895df493ebb3f1de34453bdf5/c.html
China PPI and CPI, February
https://www.stats.gov.cn/sj/sjjd/202403/t20240309_1948280.html
European Chamber report launch: Navigating the Politics of Economic Security
https://www.europeanchamber.com.cn/en/upcoming-events/25555/_Offline_Only_European_Chamber_Report_Launch_Navigating_the_Politics_of_Economic_Security
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: China’s foreign trade in goods surged at an unexpected rate in the first two months of the year. As the value of exports grew over twice as fast as the value of imports, the country’s trade surplus rose over 125 billion US dollars. The General Administration of Customs announces the data from January and February combined each year to avoid potential distortions stemming from the moving date of the Chinese New Year holiday.
MARIANN: The data released on 7th March showed that in US dollar denominated terms, China’s exports rose 7.1 per cent year-on-year. This increase was in part driven by a strong uptick in demand for Chinese goods in Latin-America, Africa, and some South-East Asian countries. The value of China’s imports, meanwhile, increased 3.5 per cent from a year ago. The European Union remained China’s second largest trade partner overall, with the Association of Southeast Asian Nations ranking first. Notably, in terms of import value, the EU ranked third after ASEAN and Latin-America. Moreover, the value of China’s exports to the EU was more than twice the value of its imports from the bloc.
The European Chamber has been advocating for more demand-side policy support in China. This could help boost domestic consumption and offset the impact of supply-side policies, which have been a contributor to the significant trade imbalances the country has accumulated with both the EU and with the United States. The Chamber has emphasised that if left unaddressed, the growing trade imbalances would likely result in action being taken by overseas governments.
(MUSIC)
RUI: On 7th March, Chinese Foreign Minister Wang Yi announced that China will expand its visa-free policy trial to six more European countries.
MARIANN: Starting from 14th March, ordinary passport holders from Austria, Belgium, Hungary, Ireland, Luxembourg and Switzerland will be able to enter and stay in China for 15 consecutive days without a visa. The trial period will last until 30th November. This follows the announcement last November that citizens from France, Germany, Italy, the Netherlands and Spain would be permitted to travel to China visa-free on a year-long trial basis. European businesses see it as positive that the authorities are taking steps to facilitate people-to-people exchanges. The European Chamber hopes that the policy will be extended to all EU member states.
(MUSIC)
RUI: The year-on-year fall in China’s producer prices continued for the seventeenth month in a row in February. Consumer prices edged up slightly compared to a year ago, breaking a downward trend that lasted for four consecutive months.
MARIANN: In its statement the National Bureau of Statistics attributed the continued fall in producer prices to the impact of the Chinese New Year holiday, saying that this time of year is traditionally an off-season for industrial production. While still modest, the rise in consumer prices was the fastest recorded in eleven months. This was in large part due to an increase in prices of food and travel-related services, as demand surged because of the holiday.
(MUSIC)
RUI: The European Union, China and the United States have all been engaged in varying degrees of risk management and efforts to strengthen economic security for several years. However, the measures they each adopt, as well as their desired outcomes and the length of time each actor has been engaged in such activities, are quite distinct.
MARIANN: Meanwhile, at the company-level, the volume, complexity and severity of the risks businesses face have grown exponentially, as politics has slowly seeped into the business environment. Corporate planning is now skewed disproportionately towards risk management rather than cost saving, optimising efficiency or increasing market share.
RUI: Join us on 20th March in Beijing to attend the launch of the Chamber’s latest publication dedicated to the topic of risk management at both the political and corporate level, produced in partnership with China Macro Group. Following its launch, the report will be available on the Chamber’s website to download for free.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- the government work report 2024 on foreign investment;
- the purchasing managers’ index in February;
- EU-China trade in goods in 2023;
- the mobile payment limits for foreign visitors.
From the Chamber’s side, on 4th March, President Jens Eskelund met with Dutch Minister Geoffrey van Leeuwen for Foreign Trade and Development Cooperation.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Government work report 2024
https://npcobserver.com/wp-content/uploads/2024/03/2024-Government-Work-Report_EN.pdf
China official PMI, February
https://www.stats.gov.cn/sj/zxfb/202403/t20240301_1947971.html
EU-China trade in goods in 2023
https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20240304-2
Mobile payment limits for foreign visitors to be raised
https://english.www.gov.cn/news/202403/02/content_WS65e26742c6d0868f4e8e4881.html
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: At the annual meeting of the National People’s Congress, China set the target for economic growth in 2024 at around 5 per cent and pledged to ensure both a predictable policy environment and national treatment for foreign-invested enterprises.
MARIANN: In his speech introducing the annual government work report, Chinese Premier Li Qiang said that China would open more sectors for foreign investment. One way he noted this would be done is by further reducing the negative list for foreign investment; another is by easing market access restrictions in more sectors – the Premier here cited the medical and telecommunications industries as examples. He vowed that issues related to cross-border data transfers and public procurement would also be addressed. In addition, policymakers are expected to take steps to resolve liveability challenges for foreign nationals working or studying in China.
Premier Li also acknowledged difficulties with China’s economic recovery, and highlighted areas where efforts should be made to support growth. These include addressing local government debt and expanding domestic consumption. The European Chamber will continue to work with Chinese stakeholders and offer constructive recommendations on where concrete steps are needed to turn these pledges into the kind of actions that can improve business confidence among foreign companies.
(MUSIC)
RUI: Manufacturing activity in China dipped slightly lower in February compared to the previous month, while services activity expanded at a faster pace.
MARIANN: The official manufacturing purchasing managers’ index, or PMI, indicated contraction for the fifth consecutive month. The subindex for production sank below the 50-point benchmark separating growth from contraction for the first time in nine months, as demand remained weak. The fall in new export orders accelerated from the previous month.
Meanwhile, the non-manufacturing PMI, which reflects activity in the services and construction industries, showed the fastest pace of growth since last September. This was attributable to an uptick in services activity, with growth in construction activity slowing compared to the previous month.
(MUSIC)
RUI: According to data released by Eurostat on 4th March, the EU’s deficit with China in trade in goods fell 27 per cent year-on-year in 2023. A Euractiv article noted that imports from China fell 18 per cent while exports fell three per cent.
MARIANN: Despite the decrease in the deficit, which was a substantial 106 billion euros, the EU’s 2023 trade deficit with China was still the second highest since 2013. On the list of the most imported goods from China, telecommunications equipment, electrical machinery and apparatus and automatic data processing machines occupied the top 3 spots. It is also notable that the EU imported 3.5 billion euro’s worth of Chinese cars in 2023, a 36.7 per cent year-on-year increase.
According to Alicia García-Herrero, a senior fellow at Brussels-based think-tank Bruegel, who was cited in the Euractiv article, the EU’s decrease in exports is mainly due to China’s successful implementation of import-substitution measures, aimed at reducing its strategic dependence on the West.
(MUSIC)
RUI: China’s central bank said it would instruct mobile payment platforms to raise the caps on transactions made by foreign visitors.
MARIANN: Currently, the single mobile transaction limit for foreign visitors is set at 1,000 US dollars, while the annual mobile payment limit is 10,000 US dollars. These caps would be raised to 5,000 and 50,000 US dollars respectively, which are the limits set for domestic users. The central bank also vowed to make certain processes related to mobile payments, such as identity verification and card binding, easier for foreign users.
The European Chamber has been vocal about the inconveniences faced by overseas visitors travelling in China, and is pleased to see that the authorities are taking steps to address some of these issues. While China’s digitalisation of services and usage of mobile apps have greatly eased life for residents, many popular and essential apps do not support foreign credit/debit cards, or have English versions (or the English is not properly translated). Many processes—even things as simple as buying a metro ticket from a machine—cannot be completed using a passport as they require a Chinese resident ID card. The Chamber encourages the Chinese Government to ensure that all its systems, websites and platforms are available in English, and that foreigners can always use their passports in place of a Chinese resident ID card.
(MUSIC)
RUI: On 4th March, President Jens Eskelund and General Manager of the Shanghai Chapter Steven Basart, met with Geoffrey van Leeuwen, Minister for Foreign Trade and Development Cooperation of the Kingdom of the Netherlands.
MARIANN: President Eskelund provided an overview of the business environment in China as well as the key challenges facing European companies doing business in the country. He noted the importance of finding a balanced EU-China relationship, and also introduced the European Chamber’s upcoming report on de-risking.
RUI: Minister van Leeuwen debriefed the European Chamber on the priorities for Netherlands-China relations and gave his views on the impact of geopolitics on industry.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on:
- the recent State Council executive meeting on economic priorities for 2024;
- the twelfth EU-China Industrial Policy Dialogue;
- the 2023 report of Office of the United States Trade Representative on China’s WTO compliance and
- the revised Law on Guarding State Secrets.
From the Chamber’s side: join us on 7th March online or in person in Shanghai to hear influential business leaders’ insights on closing the gender gap and guidance to those seeking to advance in their careers.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
State Council meeting on economic priorities for the year ahead
https://english.www.gov.cn/news/202402/23/content_WS65d89513c6d0868f4e8e44c0.html
12th EU-China Industrial Policy Dialogue
https://wap.miit.gov.cn/xwdt/gxdt/ldhd/art/2024/art_9b78db1658c04b219da3c8c80557da6a.html
EU SME Centre Meeting with Director-General for DG GROW Kerstin Jorna
USTR 2023 Report to Congress on China’s WTO Compliance
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/february/ustr-releases-annual-report-chinas-wto-compliance
Revised Law on Guarding State Secrets
https://www.gov.cn/yaowen/liebiao/202402/content_6934648.htm
European Chamber event: Gender diversity – Empowering Female Leadership in Business
https://www.europeanchamber.com.cn/en/upcoming-events/25473/_Hybrid_Gender_Diversity_Empowering_Female_Leadership_in_Business
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 23rd February, the State Council held an executive meeting chaired by Chinese Premier Li Qiang, during which economic measures were proposed, including some aimed at better attracting foreign investment and mitigating risks associated with local government debt.
MARIANN: At the meeting, the State Council designated stabilising foreign investment as a focus for economic work in the year ahead, and pledged efforts to restore foreign investor confidence, create greater market access and level the playing field for foreign companies. State Councillors also vowed to find ways to relieve some of the inconvenience that foreign visitors experience with payment services in China.
(MUSIC)
RUI: The twelfth EU-China Industrial Policy Dialogue was held on 23rd February in Beijing, with vice minister of industry and information technology Xin Guobin jointly presiding over the annual dialogue with Kerstin Jorna, Director General of the European Union’s Directorate General for Internal Market, Industry, Entrepreneurship and SMEs.
MARIANN: According to a statement released by China’s Ministry of Industry and Information Technology, the meeting’s participants went over the progress in EU-China cooperation in areas including the automotive industry, green industrial development and the establishment of an early warning mechanism for key raw materials. The two sides confirmed their willingness to continue strengthening their practical cooperation in areas where it has already proved fruitful. One day before the dialogue took place, Director General Jorna and her team met with representatives of the EU SME Centre and the IP SME Helpdesk who provided them with an overview of their respective projects, as well as with an overview of the on-the-ground experiences of European SMEs. Later the same day, DG Jorna attended a dinner with representatives of the Chamber’s Advisory Council, led by Chamber Vice President Stefan Bernhardt. Vice president Bernhardt raised several issues relevant to European business in China, including the ongoing contradiction between China’s desire to attract foreign investment and its increasing focus on security; China’s economic slowdown; and the Chamber’s forthcoming report on de-risking.
(MUSIC)
RUI: Also on 23rd February, the Office of the United States Trade Representative released its annual report on China’s compliance with the terms of its World Trade Organization membership, calling the country the “biggest challenge to the international trading system established by the WTO”.
MARIANN: The report highlights that although China joined the organization 22 years ago, it still maintains a state-directed approach to the economy and trade, which only increased in the past decade. This approach is characterised as relying, quote, “heavily on interventions in the market by the Chinese government” unquote. Furthermore, the report finds that China’s central planning has increasingly been used to expand the market share of Chinese enterprises both in domestic and global markets, with the playing field becoming more and more skewed against foreign enterprises as a result.
(MUSIC)
RUI: On 27th February, the Standing Committee of the National People’s Congress passed a revised version of the Law on Guarding State Secrets, which will come into effect on 1st May.
MARIANN: The revised law introduced the concept of “work secrets” which it broadly defined as items that departments have access to as part of their normal operations, which do not belong to the category of state secrets but if leaked would cause an adverse impact. The law said that rules on the management of work secrets would be provided separately, but no timeline has been provided so far. The revised law was passed shortly after a series of new or revised national-security-focused legislation came into effect last year. The European Chamber has been vocal about the trend of China’s increasing focus on national security, highlighting that it is raising more uncertainty for business. The scope of issues deemed ‘sensitive’ seems to be constantly expanding, which makes it more difficult for companies to access information necessary for making investment decisions related to their China operations.
(MUSIC)
RUI: Gender equality is a business issue as much as it is a social issue. Numerous studies have consistently demonstrated that gender diversity in leadership leads to enhanced financial performance for companies and plays a crucial role in achieving sustainable development, peace and democracy in society.
MARIANN: In a world facing multiple crises that are putting immense pressure on communities, achieving gender equality is more vital than ever.
RUI: Join us online or in person in Shanghai on 7th March to hear influential business leaders’ insights on closing the gender gap and their guidance to those seeking to advance in their careers.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains segments on the latest forecasts by the IMF and the OECD for China’s GDP growth; on the State Council’s new, temporary regulations for carbon emmission trading and on the Rhodium Group’s note on the lack of clarity on China’s economic policymaking. From the Chamber’s side: a Chamber delegation led by President Eskelund met with Zhao Shitong, assistant minister of the International Department of the Communist Party of China; and a reminder for all our eligible members to complete the Business Confidence Survey 2024 before it closes on 9th February.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
IMF 2023 Article IV Consultation report on China
https://www.imf.org/en/Publications/CR/Issues/2024/02/01/People-s-Republic-of-China-2023-Article-IV-Consultation-Press-Release-Staff-Report-and-544379
OECD Economic Outlook, Interim Report February 2024
https://www.oecd-ilibrary.org/sites/0fd73462-en/index.html?itemId=/content/publication/0fd73462-en#section-d1e46-28b1e449af
New carbon emissions trading regulations
https://www.gov.cn/zhengce/content/202402/content_6930137.htm
Rhodium Group note on China’s policy ambiguity
Beijing’s Silence is Deafening
European Chamber meeting with IDCPC
https://www.europeanchamber.com.cn/en/lobby-actions/6939/Meeting_with_International_Department_of_the_Chinese_Communist_Party_
Business Confidence Survey 2024 closing soon
https://www.europeanchamber.com.cn/en/national-news/3590/the_european_business_in_china_business_confidence_survey_2024_officially_opened_on_monday_15th_january
Transcript:
KALINA: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
KALINA: The International Monetary Fund expects that China’s economic growth will slow to 4.6 per cent in 2024 and decelerate further in the coming years, dropping to 3.5 per cent by 2028.
MARIANN: In a fresh report published on 2nd February, the IMF highlighted continued weakness in the property sector and muted demand for China’s exports as the major factors hindering the country’s economy in 2024. For the medium term, the IMF projects that growth will slow further due to structural issues, such as low productivity and an ageing population. The report also underlined that while growth is expected to weaken, inflation is likely to increase over the coming year. However, the organisation stressed that China’s economy faces a very uncertain outlook, primarily due to the future trajectories of the real-estate sector and local government debt. It also listed a further weakening of external demand and heightened geopolitical tensions among additional risks, while suggesting that Chinese policymakers could take steps to improve confidence and create momentum for a rebound in private investment.
(MUSIC}
KALINA: On 5th February, the Organisation for Economic Cooperation and Development released its report on the interim economic outlook for 2024, projecting that China’s GDP growth will slow to 4.7 per cent in 2024, and to 4.2 per cent in 2025.
MARIANN: In its analysis, the OECD also cited the contraction of the property sector and weak consumption growth as the key challenges for China’s economy. As for global GDP, the OECD expects growth of 2.9 per cent in 2024, recovering to 3 per cent in 2025.
(MUSIC}
KALINA: On 4th February, China’s State Council released a set of new, temporary regulations for carbon emission trading.
MARIANN: The regulations, which will take effect on 1st May, aim to strengthen the legal framework for China’s national carbon market, and replace the existing, ministerial-level rules which were put in place in 2021. The new rules also clarify the division of duties related to the supervision and management of carbon emission trading and set out stricter penalties for non-compliance.
(MUSIC}
KALINA: In a note published on 2nd February, the Rhodium Group warned that markets are waiting for Chinese policymakers to take tangible action to address a growing number of economic challenges.
MARIANN: The note highlights that while in the past, economic technocrats would have concrete plans to manage challenges, market confidence is now being eroded due to a lack of clarity on economic policymaking. The Washington-based think tank stressed that by leaving issues such as local government debt unresolved, there is a growing risk that local government investment will slow further, which in turn will hinder economic growth. Other challenges highlighted in the note include subdued household consumption and persistent capital outflow, which the Rhodium Group expects to be a long-term issue for China’s financial system.
(MUSIC}
KALINA: On 29th January, a European Chamber delegation led by President Jens Eskelund met with Zhao Shitong, assistant minister of the International Department of the Communist Party of China, and exchanged views on EU-China relations, the broader geopolitical context, supply chain resilience and the business environment for foreign companies in China.
MARIANN: Senior representatives from the European Chamber introduced operational issues faced by the Chamber’s member companies in several sectors, including automotive, energy, environment and green technology and information and communication technology.
(MUSIC}
KALINA: Every year, the European Chamber conducts its Business Confidence Survey to provide a comprehensive analysis of China’s business environment.
MARIANN: This year, the online survey officially opened on 15th January, and the primary contacts of all eligible member companies were sent a link and unique access code.
KALINA: If you received a code but haven’t completed the survey yet, please make sure to do so before 9th February. Filling in the survey will add your company’s voice to the Chamber’s advocacy messaging for the year ahead. Additionally, by completing the survey, you will have the chance of winning one out of three amazing prizes: a stay at the Conrad Hotel in Shenyang, or one of two camping sets. All information received from members will be anonymised and remain strictly confidential. The results will be published in May and presented to Chinese and European officials, media and other organisations.
(MUSIC}
MARIANN: Thanks for listening, and don’t forget to tune in again after the Chinese New Year holiday!
KALINA: In the meantime, please find useful links in the episode notes. We wish you a peaceful holiday and a happy and prosperous Year of the Dragon!
This episode contains segments on an implementation plan for piloting the comprehensive reform of Shanghai’s Pudong New Area; on 2023 profits at China’s larger industrial firms; on China’s official manufacturing purchasing managers’ index in January 2024 and on a quarterly report by the National Institution for Finance and Development on China’s macro leverage ratio. From the Chamber’s side, on 24th January, the European Chamber co-hosted the first EU-Guangzhou Business Dialogue, which it organised jointly with Guangzhou Municipal Bureau of Commerce and Huangpu District Government of Guangzhou focussing on addressing issues related to the city’s most recent policies for foreign companies, as well as challenges faced by the Chamber’s member companies operating in the Greater Bay Area.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Implementation Plan for the Comprehensive Reform Pilot of Pudong New Area (2023-2027)
https://www.gov.cn/zhengce/202401/content_6927505.htm
China 2023 industrial profits
https://www.stats.gov.cn/sj/zxfb/202401/t20240126_1946914.html
China January official PMI
https://www.stats.gov.cn/sj/zxfb/202401/t20240131_1947009.html
NIFD report on China’s 2023 macro leverage ratio
http://www.nifd.cn/SeriesReport/Details/4132
1st EU-Guangzhou Business Dialogue
https://www.europeanchamber.com.cn/en/lobby-actions/6927/2024_EU_Guangzhou_Business_Dialogue_was_successfully_held_in_Guangzhou
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: On 22nd January, China’s State Council and the Central Committee of Chinese Communist Party jointly released an implementation plan for piloting the comprehensive reform of Shanghai’s Pudong New Area.
MARIANN: The plan aims to promote further reform and opening up. Under the framework of the pilot, digital yuan payments will be trialled in several areas, including e-commerce, carbon and green electricity trading. The plan also includes measures to support innovation, intellectual property protection and talent development.
XINHE: Commenting on the plan’s release is Carlo D’Andrea, vice president of the European Chamber and chair of the Chamber’s Shanghai Chapter:
CARLO D’ANDREA: The Shanghai Chapter welcomes the release of the Pudong pilot plan as it grants Shanghai more autonomy to explore its options for further opening-up of sectors including telecommunications, financial services and healthcare. However, in order to assess its potential impact, businesses need to see a clear roadmap on how the pilot plan will be implemented. We therefore would request that the government releases a detailed plan specifying the approach to be taken as well as the timeline. For its part, the European Chamber’s Shanghai Chapter will actively engage with the local authorities and provide members’ feedback and constructive recommendations based on the good cooperation and regular exchange that we have maintained with the Pudong authorities over the years.
(MUSIC}
XINHE: According to data released by the National Bureau of Statistics on 27th January, profits at China’s larger industrial firms dropped 2.3 per cent in 2023 compared to the previous year.
MARIANN: The year-end data showed the lowest rate of decrease all year, with the fall in industrial profits slowing month by month from a 22.9 per cent year-on-year drop recorded in February. A breakdown by ownership structure showed that equity-owned companies made the most profits last year in absolute terms, while foreign-owned enterprises made the least, with their profits also falling at the steepest rate. Privately-owned industrial firms were the only ones recording a year-on-year increase in their profits. The statistics bureau’s statement also revealed that foreign-invested companies were the only category that also experienced a year-on-year drop in their operating income.
(MUSIC}
XINHE: Manufacturing activity in China contracted for the fourth consecutive month in January, while services growth gained some momentum.
MARIANN: The official manufacturing purchasing managers’ index or PMI stayed below the 50-point benchmark separating growth from contraction, despite rising slightly from December. While production expanded further compared to the previous month, demand remained weak, which in turn led to more layoffs at manufacturing firms.
The non-manufacturing PMI indicated that growth in the sector accelerated to the highest pace since September, as services activity climbed just above the 50-point benchmark after two months of contraction.
(MUSIC}
XINHE: According to the 3 Finance and Development, a Chinese think tank, the ratio of China’s total debt to gross domestic product rose sharply in 2023.
MARIANN: In its quarterly report, released on 25th January, the institution said that the level of total debt in the real economy, that is in the corporate and residential sectors, remained relatively low, increasing less than 10 per cent year-on-year. However, the slowdown in nominal economic growth resulted in a sharp rise of the country’s macro leverage ratio, which is the ratio of total debt to GDP in the real economy. The ratio surpassed 280 per cent, climbing 13.5 per cent from 2022.
At the same time, the government’s leverage ratio also increased, with government debt growing 15.7 per cent from 2022 – faster than in the previous two years and surpassing the growth rate of household and corporate debt.
(MUSIC}
XINHE: On 24th January, the European Chamber co-hosted the first EU-Guangzhou Business Dialogue, which it organised jointly with Guangzhou Municipal Bureau of Commerce and Huangpu District Government of Guangzhou
MARIANN: The event focussed on addressing issues related to the city’s most recent policies for foreign companies, as well as challenges faced by the Chamber’s member companies operating in the Greater Bay Area.
XINHE: The event was attended by over 100 participants, including representatives from more than 70 European firms, the European Union’s Delegation in China, consuls generals from EU member states, as well as officials from various local government departments.
(MUSIC}
MARIANN: Thanks for listening, and don’t forget to tune in again next week!
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s 2023 inbound and outbound passenger flows and the number of its foreign residents; on China’s intention to extend its visa-free policy to two more European countries; on the country’s actual use of foreign direct investment in 2023; on the restart of trading of voluntary greenhouse gas emission reduction credits and on the declining number of privately-owned companies among of China’s top 100 listed firms. From the Chamber’s side: the Business Confidence Survey 2024 opened on 15th January to collect members’ feedback on China’s business environment.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China 2023 cross-border passenger flow and foreign resident data
https://www.nia.gov.cn/n741435/n1194535/n1625663/index.html
China 2023 actual use of FDI
http://www.mofcom.gov.cn/article/xwfb/xwrcxw/202401/20240103467642.shtml
CCER scheme restarted
https://english.www.gov.cn/news/202401/22/content_WS65ae4ffdc6d0868f4e8e35e0.html
PIIE tracker of China’s top 100 listed firms by ownership
https://www.piie.com/research/piie-charts/2024/share-chinas-top-companies-private-sector-continued-steadily-decline-2023
European Chamber: Business Confidence Survey 2024
https://www.europeanchamber.com.cn/en/national-news/3590/the_european_business_in_china_business_confidence_survey_2024_officially_opened_on_monday_15th_january
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: According to China’s National Immigration Administration, in 2023 the number of foreign nationals living in China recovered to 85 per cent of the level recorded at the end of 2019.
MARIANN: In response to media questions at a press conference held on 18th January, the immigration office said that it issued 711,000 residence permits to foreign nationals living in the country in 2023. Passenger flows at China’s borders have also showed significant increases since the country reopened at the beginning of last year. Overall, inbound and outbound passenger flows surged more than 260 per cent, surpassing 400 million. The steepest rise was recorded in the number of exits and entries made by foreign nationals, which at 35 million was almost eight times as high as the number recorded in 2022.
(MUSIC}
XINHE: During his official trip to Europe in mid-January, Chinese Premier Li Qiang announced that China would extend its visa-free policy to two more European countries.
MARIANN: Holders of Swiss and Irish passports will also be able to enter China without a visa. While the details of this unilateral move are yet to be clarified, it is likely that the policy will be similar to the waiving of visa requirements for nationals of six countries announced late last November. Since 30th November, citizens of France, Germany, Italy, Holland, Spain and Malaysia can stay in China visa-free for up to 15 days.
(MUSIC}
XINHE: Data released by China’s Ministry of Commerce on 19th January showed that the country’s actual use of foreign direct investment shrank 8 per cent year-on-year in 2023.
MARIANN: FDI utilisation experienced a decline for the seventh consecutive month according to year-end data, with the rate of decrease easing to the slowest pace recorded since August. At the same time, the number of newly-established foreign-invested firms rose almost 40 per cent compared to 2022, surpassing 53,000. The actual use of FDI in manufacturing dropped 1.8 per cent, while in services it fell 13.4 per cent year-on-year. However, overall the services sector received more than twice as much FDI as manufacturing.
(MUSIC}
XINHE: On 22nd January the government restarted national trading of China Certified Emissions Reduction credits, with the aim of helping to fund projects that can contribute to reducing greenhouse gas emissions.
MARIANN: The China Certified Emission Reduction scheme was first launched in 2012 but then suspended in 2017 as trading volumes remained relatively subdued. Last year, in preparation for relaunching the scheme, the Ministry of Ecology and Environment and the State Administration for Market regulation jointly issued a new set of measures to govern it. The national registration and trading systems are hosted online by the Beijing Green Exchange.
(MUSIC}
XINHE: According to analysis conducted by the Peterson Institute for International Economics, the number of private firms among China’s top 100 listed companies continued to fall in 2023.
MARIANN: The institute’s calculations show that while in mid-2021 more than half of China’s top 100 companies were privately-owned, by the end of 2023 that number had fallen below 37 per cent. Meanwhile, the share of majority-state owned enterprises in the top 100 surged from 31 per cent in mid-2021 to 50 per cent by the end of last year. The Peterson Institute argued that the shrinking share held by the private sector among the country’s top companies indicates that the Chinese government’s recent pledges to advance the development of the private sector have yet to be successful at restoring investor confidence.
(MUSIC}
XINHE: Every year, the European Chamber conducts its Business Confidence Survey to provide a comprehensive analysis of the Chinese business environment.
MARIANN: This year’s online survey officially opened on 15th January. All information received from members will be anonymised and remain strictly confidential. The results will be published in May and presented to Chinese and European officials, media and other organisations.
XINHE: Complete the survey before 9th February to add your company’s voice to the Chamber’s advocacy messaging for the year ahead.
(MUSIC}
MARIANN: Thanks for listening, and don’t forget to tune in again next week!
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on producer and consumer prices in China in December 2023; on China’s 2023 foreign trade data; on five measures announced by the National Immigration Administration to facilitate foreign nationals’ visits to China and on China’s 2023 GDP and other key economic indicators. From the Chamber’s side: the Business Confidence Survey 2024 officially opened online on 15th January, with a link to the survey and a unique access code sent to the primary contacts of all member companies. Complete the survey before 9th February to add your company’s voice to the Chamber’s advocacy messaging for the coming year.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China PPI and CPI, December
https://www.stats.gov.cn/sj/zxfb/202401/t20240112_1946466.html
China foreign trade data, December
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5624311/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5624307/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5624373/index.html
The National Immigration Administration’s five measures to facilitate foreign nationals’ entry into China
https://english.www.gov.cn/news/202401/12/content_WS65a09df7c6d0868f4e8e2fe6.html
2023 official economic data
https://www.stats.gov.cn/sj/zxfb/202401/t20240117_1946624.html
European Chamber Business Confidence Survey 2024
https://www.europeanchamber.com.cn/en/national-news/3590/the_european_business_in_china_business_confidence_survey_2024_officially_opened_on_monday_15th_january
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: Producer prices in China fell 2.7 per cent year-on-year in December, maintaining a downward trajectory for the fifteenth consecutive month, underscoring prolonged weak demand.
MARIANN: While the year-on-year drop slowed slightly from November, on a month-on-month basis, producer prices continued to slide at the same speed as recorded in the previous month. Overall, in 2023, prices producers charge their clients shrank 3 per cent compared to 2022.
Meanwhile, consumer prices fell for the third month in a row in December. However, the 0.3 per cent rate of year-on-year decrease was milder than the data from the previous month. In 2023, consumer prices edged up 0.2 per cent compared to 2022, staying well below the official target which aimed to cap annual inflation at 3 per cent.
(MUSIC}
XINHE: For the first time in seven years, the value of China’s full-year exports in US dollar-denominated terms fell in 2023 due to sluggish global demand and the depreciation of the renminbi.
MARIANN: The full-year foreign trade data showed a 4.6 per cent decline in exports and a 5.5 per cent drop in imports compared to 2022. This was despite a year-on-year uptick recorded both in the value of exports and imports in December. In fact, at 2.3 per cent, the growth in export value was the highest since April. The drop in the value of exports can at least be partly attributed to the depreciation of China’s currency, as in Chinese yuan terms the full-year export value showed a 0.6 per cent increase.
The European Union remained China’s second largest trade partner in 2023 after the Association of South-East Asian Nations, withthe United States the third largest.
(MUSIC}
XINHE: On 11th January, China’s National Immigration Administration introduced five measures to facilitate foreign nationals’ visits to China for the purposes of business, tourism or education.
MARIANN: The measures seem to bring some improvement, for instance by providing the option for foreign nationals who need to travel to China urgently to apply for a port visa on arrival. However, some do not appear to be completely new or are not expected to bring about significant changes for the majority of foreigners travelling to China. Further clarification on the implementation of a number of these measures is still needed.
(MUSIC}
XINHE: In a dataset released on 17th January, China’s statistics bureau announced that in 2023, the country’s gross domestic product, or GDP, grew 5.2 per cent from 2022, in line with the government’s target of “around 5 per cent”.
MARIANN: Other highlights of the dataset showed that industrial production increased 4.6 per cent year-on-year, while retail sales were up 7.2 per cent from the previous year. Surveyed urban unemployment stood at 5.2 per cent, 0.4 per cent lower than in 2022. Although last year the National Bureau of Statistics discontinued the monthly release of the unemployment data broken down to different age groups, it did provide the numbers for the whole year, 14.9 per cent of young people between the ages of 16 to 24 were out of a job in China’s larger cities last year. Meanwhile, China’s population decreased by over 2 million compared to 2022.
(MUSIC}
XINHE: Since its founding in 2001, the European Chamber has been conducting its Business Confidence Survey to provide an annual snapshot of how European business is faring in China. Based on the survey’s findings, the report presents both the hurdles that European companies are facing in the Chinese market, as well as the improvements that they have seen.
MARIANN: This year’s online survey officially opened on 15th January, with a link to the survey and a unique access code sent to the primary contacts of all member companies.
XINHE: By completing the survey before 9th February, your company will help to shape the Chamber’s advocacy messaging for the coming year. All information received from members will be anonymised and remain strictly confidential.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s official manufacturing and services activity in December; on the country’s actual use of foreign direct investment in January-November and on profits at larger industrial firms in China in the first eleven months of 2023. From the Chamber’s side: join us on 16th January online or in person in Beijing to hear economists and industry experts forecasts for the year ahead, and find out what potential risks and opportunities they think businesses and investors should be aware of in the evolving economic landscape of China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China official PMI, December
https://www.stats.gov.cn/sj/zxfb/202312/t20231229_1946102.html
Caixin China PMI, December
https://www.pmi.spglobal.com/Public/Home/PressRelease/5f52bb9bc3e34194aa5e6c367d284619
https://www.pmi.spglobal.com/Public/Home/PressRelease/e1e2f542d9e843a7b5b7b02492caaba7
China actual use of FDI, January-November
http://www.mofcom.gov.cn/article/xwfb/xwrcxw/202312/20231203462142.shtml
China industrial profits, January-November
https://www.stats.gov.cn/sj/zxfb/202312/t20231226_1945798.html
Chamber event: China Economic Outlook 2024
https://www.europeanchamber.com.cn/en/upcoming-events/25190/_Hybrid_China_Economic_Outlook_2024_Reflections_Following_the_Central_Economic_Work_Conference
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: Manufacturing activity in China dipped to a six-month low in December, while services activity increased slightly from November due to an uptick in construction.
MARIANN: The official manufacturing purchasing managers’ index or PMI fell to 49 points in November, remaining under the 50-point benchmark separating growth from contraction for the third month in a row. While production continued to expand, new orders fell at a steeper rate than in the previous two months, with export demand sinking to the lowest level recorded in 2023.
Meanwhile, the non-manufacturing PMI rose to 50.4 points in December, pushed by stronger construction activity. Activity in the service sector itself, however, continued to decline as demand stayed relatively weak.
(MUSIC}
XINHE: Caixin’s manufacturing and services PMI data, which are based on two private surveys indicated a slightly different picture, with manufacturing activity shown to be picking up for the second month in a row, and services activity expanding at a faster pace too in December.
MARIANN: The Caixin China General Manufacturing PMI suggested that the fall in new export business was softening and cost pressures continued to moderate at the end of 2023. However, the survey found that business confidence among manufacturing companies remained subdued, even though respondents expected that a rise in global demand would push production to increase in the year ahead.
Caixin’s services PMI showed services activity to expand at the quickest pace for five months in December due to a surge in new orders. Services companies increased their staffing levels as a result, and were generally optimistic about the upcoming 12 months, with the expectation that improving economic conditions will lead to a rise in client spending.
(MUSIC}
XINHE: China’s actual use of foreign direct investment or FDI fell 10 per cent year-on-year in the first eleven months of 2023.
MARIANN: According to data released by China’s Ministry of Commerce on 21st December, while the utilisation of FDI shrank, the number of new foreign-invested companies rose 36 per cent compared to the same period last year. The use of FDI in the manufacturing sector fell 2.1 per cent overall, but rose in certain subsectors. For instance, the use of FDI in the medical device manufacturing industry surged over 27 per cent year-on-year. In its statement, the ministry highlighted that the high-tech industries attracted over 37 per cent of the total use of FDI in the January-November period, which was a slight uptick from 2022.
(MUSIC}
XINHE: Profits at larger industrial firms in China dropped 4.4 per cent year on year in the January-November period.
MARIANN: The drop in profits moderated to the slowest rate recorded all year by the end of November. In the first eleven months of 2023, foreign-invested industrial firms reported the steepest losses to their profits compared to the same period in 2022, while profits at private-owned industrial companies grew slightly year-on-year. A sectoral breakdown showed that firms in mining and manufacturing saw their profits shrink, but utilities providers had their profits rise over 47 per cent during the same period.
(MUSIC}
XINHE: At the annual Central Economic Work Conference, held in December, China’s leadership reviewed key work that had taken place in 2023. While noting the country’s economic recovery and the progress made in high-quality development in 2023, some of the challenges China still faces were also highlighted.
MARIANN: These challenges include the lack of effective demand, overcapacity in some sectors, lacklustre social expectations, certain risks and hidden problems, bottlenecks in the domestic circulation, as well as rising complexity, severity, and uncertainty of the external environment.
XINHE: Join us on 16th January online or in person in Beijing to hear economists’ and industry experts’ forecasts for the year ahead, and find out what potential risks and opportunities they think businesses and investors should be aware of in China’s evolving economic landscape.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s November key economic indicators, including industrial production, retail sales, urban unemployment and fixed-asset investments; on a new research note by the Rhodium Group on how China’s slowing economic growth is likely to impact its spending on science and technology and on the State Council’s latest discussion on accelerating the establishment of a unified national market. From the Chamber’s side: the latest issue of EURObiz, which is now available to download for free, introduces the different challenges companies face in talent recruitment.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Chinese industrial production, November
https://www.stats.gov.cn/sj/zxfb/202312/t20231215_1945571.html
Chinese retail sales, November
https://www.stats.gov.cn/sj/zxfb/202312/t20231215_1945575.html
China key economic indicators, November
https://www.stats.gov.cn/sj/zxfb/202312/t20231215_1945570.html
Rhodium report on China’s science and technology spending
Spread Thin: China’s Science and Technology Spending in an Economic Slowdown | Rhodium Group (rhg.com)
State Council executive meeting
https://english.www.gov.cn/news/202312/18/content_WS65804c15c6d0868f4e8e24d7.html
EURObiz
www.eurobiz.com.cn
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: The growth of industrial production in China picked up speed in November.
MARIANN: Industrial production increased 6.6 per cent year-on-year, which was the steepest rate of growth recorded since March 2022. Out of the 41 sectors surveyed by China’s statistics bureau, production expanded in 28. One industry where production rebounded significantly in November was equipment manufacturing with a 9.8 per cent increase. A breakdown by companies’ ownership structure showed that production grew over 7 per cent compared to the same period last year at state-owned and equity-owned industrial firms. Meanwhile, foreign-invested and private companies recorded more modest year-on-year growth – at 4.4 per cent and 5.2 per cent respectively.
(MUSIC}
XINHE: Retail sales surged 10.1 per cent year-on-year, which was the highest rate of growth recorded since May.
MARIANN: The increase in Chinese retail sales accelerated for the fourth consecutive month in November. The rebound in sales was primarily focussed in catering sales, which grew almost 26 per cent in November. Sales of goods increased only 8 per cent year-on-year, but in total value it was more than 6 times higher than catering sales in November alone.
(MUSIC}
XINHE: Other highlights from China’s November key economic indicators, released by the National Bureau of Statistics on 15th December, included the country’s urban unemployment rate and data on fixed asset investments.
MARIANN: China’s urban unemployment rate stood at 5 per cent in November, remaining unchanged from the previous two months.
While fixed asset investments increased in the first eleven months of the year, compared to the same period in 2022, the rate of growth decelerated from a 5.5 per cent high in January-February to 2.9. per cent in the January-November period. Meanwhile, private investment in fixed assets shrank 0.5 per cent year-on-year.
(MUSIC}
XINHE: In a research note published on 15th December, the Rhodium Group predicts that China’s slowing economic growth might also put the breaks on its ambitions for technological self-reliance.
MARIANN: The Rhodium Group highlights that unlike in other technologically advanced economies, innovation in China relies heavily on government funding. Furthermore, about two-third of the total government spending on science and technology in 2022 came from local governments, many of which are facing increasing pressure due to high levels of debt. In the note, the Washington-based think tank opines that China could still make significant progress in technological innovation if it channels funding into a limited number of key areas. Among the areas most likely to be given priority, the note lists those labelled as core strategic sectors in the 2023 Government Work Report, including AI and high-end chips.
(MUSIC}
XINHE: On 18th December, at an executive meeting chaired by Chinese Premier Li Qiang, the State Council discussed accelerating the establishment of a unified national market.
MARIANN: Some of the relevant tasks listed at the meeting were the elimination of any obstacles such as market segmentation and local protectionism and the promotion of reforms in key areas. While the proposed establishment of a ‘unified national market’ was touted as a move towards the creation of an efficient, standardised and competitive market, it brings together under one umbrella many items that have been on China’s to-do list for quite some time, such as implementing free flow of labour and improving intellectual property rights protection.
(MUSIC}
XINHE: During the COVID-19 pandemic, as China closed its borders and implemented stringent prevention measures, many foreign nationals were either locked out of the country and unable to return, or moved back home or to other countries where they could see their families more easily.
MARIANN: When China reopened its borders, it was hoped that this trend would quickly reverse. However, many European Chamber member companies are still struggling to attract and retain staff, which demonstrates that zero-COVID was not the only problem.
XINHE: Read the November/December edition of the Chamber’s bimonthly magazine EURObiz to find out more about the different challenges companies face in talent recruitment. You can access all articles for free on the EURObiz website.
(MUSIC}
MARIANN: Thanks for listening. Tune in again in January, when we will be back with new episodes.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on the total value of China’s exports and imports in November; on the 24th EU-China Summit; on China’s producer and consumer prices in November; on the annual Central Economic Work Conference held in Beijing and on key takeaways from the European Chamber’s Annual Conference held on 12th December.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s foreign trade data, November
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5549282/index.html
24th EU-China Summit
https://www.consilium.europa.eu/en/press/press-releases/2023/12/07/24th-eu-china-summit-engaging-to-promote-our-values-and-defend-our-interests/?utm_source=dsms-auto&utm_medium=email&utm_campaign=24th+EU-China+Summit%3a+engaging+to+promote+our+values+and+defend+our+interests
https://www.gov.cn/yaowen/liebiao/202312/content_6918908.htm
https://www.gov.cn/yaowen/liebiao/202312/content_6919032.htm
China price indices, November
https://www.stats.gov.cn/sj/zxfb/202312/t20231209_1945395.html
Central Economic Work Conference
https://english.www.gov.cn/news/202312/12/content_WS657860aec6d0868f4e8e21c2.html
Transcript:
LEXIE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
LEXIE: China’s exports bounced back after six consecutive months of decline, while imports dropped slightly again in November after a short-lived increase the previous month.
MARIANN: According to customs data released on 7th December, the total value of China’s exports climbed 0.5 per cent year-on-year. At the same time, the value of imports shrank 0.6 per cent, with the unexpected surge in October that broke an eleven-month-long decline failing to change the overall trend.
As China’s economic recovery is facing severe challenges, falling back on exports presents an obvious way to reignite economic growth. However, overreliance on supply-side policies comes with risks, as these have been a contributor to both the significant trade imbalances China has accumulated with the European Union, and overcapacity in some industries¾something European politicians cite among the key grievances in its relationship with China.
(MUSIC}
LEXIE: On 7th December, the European Union and China held their 24th summit in Beijing. European Commission President Ursula von der Leyen and European Council President Charles Michel held meetings with Chinese President Xi Jinping and Chinese Premier Li Qiang.
MARIANN: The summit was held in person for the first time since the outbreak of the global COVID-19 pandemic, providing a platform for a candid exchange on hot-button trade and political issues. For instance, EU representatives raised the issue of the imbalance in the bilateral trade relationship – highlighting the trade deficit and issues with Chinese overcapacity and reiterating the importance of progress in addressing issues related to market access barriers and a lack of a level-playing field for European companies in China. The Chinese side raised the EU probe on Chinese electric vehicle exports and urged the EU to be prudent when introducing restrictive economic and trade policies. Both sides reaffirmed their commitment to not ‘decouple’, with the EU side reiterating that de-risking is aimed at reducing critical dependencies.
The European Chamber remains committed to supporting a constructive bilateral EU-China relationship and is continuing to provide on-the-ground feedback to EU counterparts in preparation for upcoming exchanges between the two sides, as it had done prior to the summit.
(MUSIC}
LEXIE: The year-on-year fall in China’s producer and consumer prices both picked up speed in November, heightening concerns over deflation.
MARIANN: The prices producers charge their buyers dropped 3 per cent compared to the same period last year. China’s statistics bureau attributed this primarily to factors including a decrease in international oil prices and a weakening market demand for certain industrial products.
The fall in consumer prices was more moderate at 0.5 per cent and explained mainly with the drop in energy prices.
(MUSIC}
LEXIE: China’s leaders convened in Beijing on 11th and 12th December to outline the targets for the country’s economic work in 2024 at the annual Central Economic Work Conference.
MARIANN: Some of the challenges that China’s economic recovery is facing, such as lacklustre consumer demand and overcapacity in some sectors, were acknowledged during the conference. However, the meeting struck a positive tone overall, with China’s leaders expressing confidence about the long-term prospects for the country’s economy. Some of the priorities set out for 2024 were to strengthen the focus on sci-tech innovation, take further efforts to boost domestic demand and expand high-standard opening up.
(MUSIC}
LEXIE: The European Chamber held its Annual Conference on the 12th December in Beijing focusing on the theme of Regaining Economic Momentum in an Environment of De-risking.
MARIANN: Some of the key takeaways from panel discussions at the event were that some challenges European businesses were facing in China throughout 2023 look set to stay in 2024. These include uncertainties over the country’s economic rebound and future growth, and a lack of clarity on what kind of relationship China wants to have with foreign businesses due to mixed messaging from the Chinese government. While panellists attributed some of the issues, such as the drop in consumer confidence, to the lingering impact of the COVID-19 pandemic and related restrictions, others were seen to be largely stemming from China’s increasing focus on national security and its push for self-reliance in various areas.
LEXIE: Among reasons for optimism for the year ahead, speakers mentioned some positive signals from the Chinese Government for foreign businesses, including the State Council’s 24 points for optimising the business environment and a recent letter released by China’s Ministry of Commerce expressing an intent to eliminate differentiated treatment of foreign-invested enterprises. In addition, as the EU’s de-risking strategy is described as precise and expected to be narrow in scope, it still leaves room for bilateral cooperation in areas where cooperation can be fruitful for both sides.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
LEXIE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s November official purchasing managers’ indices; on Moody’s affirming China’s A1 credit rating but changing the outlook from stable to negative; on China’s focus on boosting employment opportunities for students who will graduate from university in 2024 and on the roll out of a new version of permanent resident ID cards for foreigners in China. From the Chamber’s side: join us in Beijing on 12th December at this year’s Annual Conference, to hear from a host of experts—from the policy, business and advisory worlds—on China’s economic outlook for 2024, and to understand what factors are most likely to shape the business relationship between the EU and China in the coming year.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China official PMI, November (in Chinese)
https://www.stats.gov.cn/sj/zxfb/202311/t20231130_1945018.html
Moody’s affirms China’s A1 rating, changes outlook to negative from stable
https://www.moodys.com/research/Moodys-affirms-Chinas-A1-rating-changes-outlook-to-negative-from–PR_481753?cy=can⟨=en
New guidelines to boost employment opportunities for China’s university graduates
http://www.moe.gov.cn/jyb_zzjg/huodong/202312/t20231205_1093287.html
European Chamber event: Annual Conference 2023
https://www.europeanchamber.com.cn/en/upcoming-events/24973/_Offline_Only_European_Chamber_Annual_Conference_2023_Regaining_Economic_Momentum_in_an_Environment_of_De_Risking
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: Manufacturing activity in China dipped slightly further in November and services activity contracted for the first time since the country abolished its stringent COVID-19 related restrictions in January.
MARIANN: The official manufacturing purchasing managers’ index or PMI slid slightly further below the 50-point benchmark separating growth from contraction. While the subindex for production remained in the growth territory, new orders continued to shrink. A breakdown according to company size showed that activity only expanded at larger manufacturing companies in November, with small- and medium-sized firms reporting contraction.
The non-manufacturing PMI remained above the 50-point benchmark, but the pace of growth slowed for the second month in a row in November. The loss of momentum was due to a contraction in services activity, which contrasted with an uptick in construction.
(MUSIC}
XINHE: On 5th December, the global integrated risk assessment firm Moody’s affirmed China’s A1 credit rating but changed the outlook on its rating from stable to negative.
MARIANN: Moody’s attributed the change in the outlook primarily to a rising likelihood that China’s central government will have to provide financial support to debt-ridden regional and local governments. It also cited increasing risks stemming from the downsizing of the property sector and lower medium-term growth, estimating that China’s economic growth would slow to 4 per cent in the next two years. On the positive side, the credit rating agency noted that the Chinese economy retained its high shock-absorption capacity.
(MUSIC}
XINHE: On 5th December, China’s Ministry of Education and Ministry of Human Resources held a video conference to discuss ways of boosting employment opportunities for students who will graduate from university in 2024.
MARIANN: The Ministry of Education expects that 11.79 million students will graduate from China’s universities in 2024, 210 thousand more than this year. The guidelines issued by the Ministry listed several areas where efforts should be stepped up to secure jobs for fresh graduates. These included Chinese university leaders strengthening their corporate engagements, universities hosting recruitment events on campus, and local governments recruiting more graduates in Party and government positions. The Ministry of Education also called for programmes for university graduates to find employment in Western China, as well as rural areas.
(MUSIC}
XINHE: Starting from 1st December, China introduced a new version of permanent resident ID cards for foreigners.
MARIANN: Apart from the new design, which features the five stars of the country’s national flag, the new version of the card offers improved personal information protection and information storage. Cardholders will be able to board trains and planes, check in to hotels and use financial and other services without the need to show a foreign passport. The identification number used for the new version of the card was adjusted to the same number of digits as the Chinese resident identity card. This will allow cardholders to benefit from online and other services that require online identity authentication.
(MUSIC}
XINHE: The normalisation of life in China after COVID management controls were lifted 12 months ago led many to think that a robust and swift economic recovery would follow.
MARIANN: However, while it looks like the government’s official 2023 target of achieving around a five per cent growth rate will be met, a combination of economic challenges and policy developments have cast a shadow over the potential for a stronger economy in 2024 and beyond.
XINHE: Join us in Beijing on 12th December at this year’s Annual Conference, to hear from a host of experts—from the policy, business and advisory worlds—on China’s economic outlook for 2024, and to understand what factors are most likely to shape the business relationship between the EU and China in the coming year.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s decision to grant visa-free entry for citizens of five European countries and Malaysia; on profits of larger industrial firms in China in the first ten months of 2023; on the first China International Supply Chain Expo; on the central bank’s notice of pledging more financial support for private companies. From the Chamber’s side: join us in Shanghai on 5th December for the China Outlook Conference 2024, where prominent business executives and experts will share their insights on the prospects for the Chinese market and provide a deeper understanding of the shifting dynamics of doing business in China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China waives visa-requirement for travellers from six countries
https://www.fmprc.gov.cn/eng/xwfw_665399/s2510_665401/2511_665403/202311/t20231124_11186670.htmlChina industrial profits, January-October (in Chinese)
http://www.stats.gov.cn/sj/sjjd/202311/t20231127_1944915.html
First China International Supply Chain Expo
https://en.cisce.org.cn/PBOC and seven other departments pledge more financial support for private sector
https://www.gov.cn/lianbo/bumen/202311/content_6917268.htmEuropean Chamber event: China Outlook Conference 2024
https://www.europeanchamber.com.cn/en/upcoming-events/24826/China_Outlook_Conference_2024_Restoring_Confidence_in_the_Chinese_MarketTranscript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: Starting from 30th November, China will grant visa-free entry for citizens of five European countries and Malaysia, and allow them to stay in the country for up to 15 days.
MARIANN: The five European countries that are included in the newly announced visa exemption policy are France, Germany, Italy, Holland and Spain. The European Chamber welcomes the announcement and hopes to see more European nations added to this list soon. It is positive that the authorities are taking steps to facilitate people-to-people exchanges, something that is necessary if China is to regain its allure as an investment destination and boost business confidence.
(MUSIC}
XINHE: Profits of larger industrial firms in China dropped by 7.8 per cent year-on-year in the first ten months of 2023. The data released by the National Bureau of Statistics on 27th November showed that the fall in industrial profits have been slowing since February.
MARIANN: Industrial firms above the designated size have made over RMB 6 trillion in the period from January to October. This number is lower than the same data from the previous two years, however, it is almost RMB 1 trillion higher than industrial profits gained in the first ten months of 2019, just before the COVID-19 pandemic. Out of the three sectors of mining, manufacturing and utilities, only utility providers were able to increase their profits compared to the same period last year. In its statement, the statistics bureau highlighted that October was the third month in a row when industrial profits increased year-on-year.
(MUSIC}
XINHE: The first China International Supply Chain Expo opened on 28th November, with over 500 enterprises showcasing their portfolios to potential collaborators.
MARIANN: According to the organisers, 26 per cent of the exhibitors are foreign companies, with a number of European Chamber members among them. There is an expectation that the expo will provide more clarity on how China sees its role in global supply chains, as well as how some of the pressing issues in trade and globalisation can be addressed. Businesses also expect that the opportunities China can provide for strengthening global supply chains will be showcased.
Increasing supply chain resilience is a top priority for European businesses in China. More than three quarters of respondents to the Business Confidence Survey 2023 reported they have reviewed their supply chain strategies over the past two years as their fragility was exposed due to a number of disruptions.
(MUSIC}
XINHE: On 27th November, China’s central bank and seven other departments jointly issued a notice, pledging more financial support for private companies.
MARIANN: According to the Notice, financial support for private businesses will be increased through setting annual targets for financial institutions about providing services to private companies. At the same time, the proportion of loans granted for private enterprises will also be increased. Support for key areas including scientific and technological innovation and green and low-carbon development will also be boosted. While the Notice mentions that support will be provided for private companies to go global, it does not specify whether foreign-invested private companies will also benefit from the relevant measures.
(MUSIC}
XINHE: In recent years, confidence in the Chinese market has experienced a significant decline. Government policies have increasingly prioritised ideology over economic concerns. This shift has cast doubts on the reliability, predictability, and efficiency that were once pillars of China’s economic success.
MARIANN: Despite the enormous size and untapped potential of the Chinese market, European businesses have become more cautious. Except for the largest corporations, most have placed their planned investments in China on hold. Headquarters are now primarily focused on bolstering supply chain resilience and mitigating various risks. Many companies have opted to localise and silo their China operations, often at significant costs.
XINHE: Join us in Shanghai on 5th December, where prominent business executives and experts will share their insights on the prospects for the Chinese market and provide a deeper understanding of the shifting dynamics of doing business in China.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s actual use of FDI in the first ten months of 2023; on the rise in industrial production and retail sales in October; on European Commission President Ursula von der Leyen’s speech on EU-China relations and on China’s record-breaking electric vehicle export to the EU in October. From the Chamber’s side: join us in Shanghai on 29th November for this year’s Compliance Conference, which will focus on the themes of data security and the Anti-Unfair Competition Law and explore the challenges and opportunities of balancing compliance with business operations in China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China January-October FDI (in Chinese)
http://www.mofcom.gov.cn/article/xwfb/xwsjfzr/202311/20231103454591.shtml
China industrial production, October (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202311/t20231115_1944531.html
China retail sales, October (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202311/t20231115_1944530.html
EU Commission President Ursula von der Leyen’s speech at the European China Conference 2023
https://ec.europa.eu/commission/presscorner/detail/en/speech_23_5851
China’s EV exports to EU record high in October
https://www.scmp.com/news/china/diplomacy/article/3242225/chinas-electric-vehicle-imports-eu-hit-record-level-amid-brussels-subsidy-probe
European Chamber event: Compliance Conference 2023
https://www.europeanchamber.com.cn/en/upcoming-events/24839/Compliance_Conference_2023_Navigating_the_Evolving_Regulatory_Landscape_of_Data_Security_and_Anti_Unfair_Competition_Law
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: According to data released on 17th November by China’s Ministry of Commerce, the actual use of foreign direct investment in the country in the first ten months of 2023 fell 9.4 per cent year-on-year.
MARIANN: China’s total use of FDI in the January-October period amounted to RMB 987 billion. The utilisation of foreign investment in manufacturing rose 1.9 per cent year-on-year but was still less than half of the actual use of FDI in services. The Ministry’s statement also highlighted that investment inflows from Canada, the United Kingdom and France all increased by at least 90 per cent respectively, however, the statement did not specify the amount of FDI from any of the listed countries.
(MUSIC}
XINHE: Production at larger industrial firms operating in China increased in October compared to the same period a year ago, with manufacturing production expanding at the fastest pace.
MARIANN: Overall, industrial production rose 4.6 per cent, which was the highest rate of increase recorded since April. Of the 41 industrial sectors surveyed by the National Bureau of Statistics, 28 boosted their production in October. A breakdown according to ownership structure showed that the increase was most significant at equity-owned companies, followed by state-owned enterprises, while production at foreign-invested firms picked up the least, rising 0.9 per cent year-on-year.
(MUSIC}
XINHE: Retail sales in China expanded significantly in October, as the October 1st national day holiday and the deals promoted in the lead up to the annual Singles’ Day shopping festival had a warming effect on consumption.
MARIANN: Retail sales grew 7.6 per cent year-on-year, which was the highest reading since May. The increase in sales of goods and catering services both accelerated compared to the previous four months.
As part of the same dataset, the statistics bureau also revealed that the surveyed urban unemployment rate remained unchanged from September, standing at 5 per cent.
(MUSIC}
XINHE: On 16th November, European Commission President Ursula von der Leyen delivered a speech at the European China Conference 2023, highlighting the need to raise concerns while at the same time leaving space for a discussion on the development of the EU-China relationship to the benefit of both sides.
MARIANN: The European Commission President stressed that achieving a level playing field in the EU’s trade relationship with China will be at the centre of the upcoming bilateral summit, which will take place early December. She elaborated on the EU’s de-risking strategy by saying that it stands on three pillars, which are: protecting the EU’s legitimate interests, dialogue to address differences and diversification with partners. Speaking on the key issues of the EU-China relationship, von der Leyen mentioned the imbalance in trade, with China’s trade surplus with the EU breaking a historic record in 2022. She also warned that China’s overcapacities in protected industries could undermine the EU’s industrial base if released onto global markets.
XINHE: According to the South China Morning Post’s calculations based on export data released by China’s customs authorities on 20th November, China’s electric vehicle exports to the EU reached a record high in October.
MARIANN: Rising 32 per cent year-on-year, the total value of EV exports from China to the EU surpassed USD 2 billion, while the European Union is conducting a probe into Chinese government subsidies provided for EV makers.
(MUSIC}
XINHE: The regulatory landscape in China is constantly evolving, making it challenging for businesses to stay compliant. Recent years have seen the introduction of several laws and regulations to address data security concerns, all of which have significant implications for businesses operating in China.
MARIANN: Similarly, complying with the Anti-Unfair Competition Law is critical for foreign businesses. The Supreme People’s Court issued a guideline on the interpretation of some issues concerning its application last March, and revisions to the law are continuing.
XINHE: Join us in Shanghai on 29th November for this year’s Compliance Conference, which will focus on the themes of data security and the Anti-Unfair Competition Law and explore the challenges and opportunities of balancing compliance with business operations in China.
(MUSIC}
XINHE: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s Ministry of Commerce signalling its intention to clean up unreasonable differential treatment between domestic and foreign investors; on China’s October consumer and producer indices; on a recent analysis that expects China’s carbon emissions to fall in 2024; and on the latest EU officials’ visits to China. From the Chamber’s side: on 30th November, join us online or in person in Beijing for the 2023 edition of the European Chamber’s annual Cybersecurity Conference.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
MOFCOM issues letter on the Special Clearance Work on Unreasonable Differential Treatment between Domestic and Foreign Investors
https://www.europeanchamber.com.cn/en/national-news/3572/european_chamber_statement_on_mofcom_clean_up_of_unreasonable_differential_treatment_between_domestic_and_foreign_investors
China price indices, October (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202311/t20231109_1944382.html
http://www.stats.gov.cn/sj/zxfb/202311/t20231109_1944383.html
http://www.stats.gov.cn/sj/sjjd/202311/t20231109_1944384.html
Carbon Brief: China’s carbon emissions set to decline in 2024
Analysis: China’s emissions set to fall in 2024 after record growth in clean energy
Thierry Breton’s visit to China
https://ec.europa.eu/commission/presscorner/detail/en/speech_23_5684
https://www.europeanchamber.com.cn/en/past-events-gallery/24840
European Chamber event: Cybersecurity Conference 2023
https://www.europeanchamber.com.cn/en/upcoming-events/24864/_Hybrid_Cybersecurity_Conference_2023_2023_
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: On 8th November, China’s Ministry of Commerce released a letter, announcing its intention to remove some of the barriers that currently prevent foreign-invested enterprises from competing with Chinese companies on an even footing.
MARIANN: The areas that have been outlined for reform in the Ministry’s letter reflect many of the Chamber’s recommendations put forward in its recently published Position Paper 2023/2024. Among the barriers that would be targeted, the letter listed examples such as standardising application processes for administrative licences and removing certain limitations on companies’ ownership structure in procurement activities. The level of detail in the examples shows that the Chamber’s recommendations are being carefully read and taken into consideration. The European Chamber will monitor developments and continue to work closely with the Ministry of Commerce to optimise the operating environment for all companies in China.
(MUSIC}
XINHE: China’s consumer and producer prices both fell in October, heightening concerns over deflation.
MARIANN: Prices that producers in China charge their customers fell 2.6 per cent year-on-year, and at a slightly higher rate than in September. The decrease in producer prices continued for the thirteenth consecutive month. The National Bureau of Statistics highlighted that the drop was at least partly attributable to factors such as international crude oil and non-ferrous metal prices. Consumer prices decreased for the second time this year in October, dropping 0.2 per cent form the same period a year ago. The statistics bureau explained this with a sharp drop in food prices, pointing out that at the same time, prices paid for services, including tourism related services, edged up.
(MUSIC}
XINHE: According to a new analysis conducted by the Centre for Research on Energy and Clean Air and published by the UK-based Carbon Brief, China’s carbon emissions are expected to fall in 2024.
MARIANN: Key findings of the analysis show that while China’s reopening at the beginning of 2023 led to a rebound in carbon-dioxide emissions, this also coincided with record installations of low-carbon electricity generating capacity. Although coal power capacity is also still in expansion, the jump in low-carbon energy capacity is creating an interest group that could have an increasing impact on China’s energy scene going forward. Taking these developments into account, the analysis forecasts that China’s carbon emissions could peak this year before entering a structural decline starting in 2024.
(MUSIC}
XINHE: High-level meetings between the European Union and China continued in November, with European Commissioner for the Internal Market Thierry Breton visiting Beijing.
MARIANN: The Commissioner met with Chinese Vice Premier Zhang Guoqing on 10th November and held discussions on the potential areas where cooperation could be strengthened between the two sides, as well as de-risking. At a lunch the same day with members of the European Chamber, the Commissioner highlighted three priorities in the bilateral relationship: the need to rebalance the relationship, the need to de-risk the two economies and societies, and the need to address global challenges together. The next EU official to visit China will be EU Climate Commissioner Wopke Hoekstra, who will travel to Beijing for talks with China’s Special Envoy for Climate Change, Xie Zhenhua.
(MUSIC}
XINHE: The European Chamber has organised its annual Cybersecurity Conference for six consecutive years since 2016. Due to its focus on legislative developments and interpretation of relevant regulations, the conference has become a well-recognised industry event on cybersecurity and data compliance for foreign companies operating in the Chinese market.
MARIANN: The upcoming, 2023 edition of the Cybersecurity Conference will bring together industry experts, academics and lawyers to analyse and discuss the latest regulatory and policy developments and help businesses find the best ways to establish a comprehensive compliance framework for their operations.
XINHE: Join us online or in person in Beijing on 30th November for expert insights on the three cross-border data transfer mechanisms, and on other issues related to data and personal information protection compliance.
(MUSIC}
XINHE: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s October foreign trade data; the opening of the sixth China International Import Expo and the Hongqiao International Economic Forum; the next EU-China summit that is to take place in December and the IMF’s latest growth forecast for China. From the Chamber’s side: on 10th November, European Commissioner for Internal Market Thierry Breton will join a lunch meeting with the European Chamber’s members and share his insights on EU de-risking in the context of the bloc’s industrial strategy.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China foreign trade data, October (in Chinese)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5473873/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5474072/index.html
Sixth China International Import Expo (CIIE) and the Hongqiao International Economic Forum
https://english.www.gov.cn/news/202311/05/content_WS65476a1dc6d0868f4e8e0fe0.html
Chamber event: Lunch meeting with Commissioner Thierry Breton – De-risking, digitalising and decarbonising European industry
https://www.europeanchamber.com.cn/en/upcoming-events/24840/_Member_Only_Lunch_meeting_with_Commissioner_Thierry_Breton_De_risking_Digitalising_and_Decarbonising_European_Industry
IMF 2023 Article IV Mission to the People’s Republic of China
https://www.imf.org/en/News/Articles/2023/11/07/pr23380-imf-staff-completes-2023-article-iv-mission-to-the-peoples-republic-of-china
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: In value terms, China’s exports continued to fall, while imports unexpectedly rebounded in October.
MARIANN: In dollar-denominated terms, the total value of China’s exports dropped 6.4 per cent year-on-year. The rate of decrease was more pronounced than analysts’ forecasts, and showed a slight acceleration from the previous month. The value of Chinese exports shrank for the sixth month in a row in October. Meanwhile, the total value of imports surged 3 per cent compared to the same period last year, which came as a surprise, as analysts expected the 11-month-long trend of decline to continue. The October reading marked the strongest increase in the value of imports since May 2022. In the first ten months of 2023, China’s exports to the European Union dropped 10.6 per cent, while its imports from the EU fell 1.3 per cent year-on-year. Nevertheless, the total value of China’s imports from the EU was still only slightly more than half of the value of its exports to the European Union.
(MUSIC}
XINHE: The sixth China International Import Expo and the Hongqiao International Economic Forum opened on 5th November in Shanghai.
MARIANN: In his keynote speech delivered at the opening ceremony, Chinese Premier Li Qiang called the expo a big platform full of opportunities and added that this year’s event attracted over 3,400 exhibitors. The Premier vowed that China would continue opening up its market, and highlighted the opportunities the country’s large population could bring to international players in terms of consumer demand. He also echoed President Xi’s pledge at the opening of the Belt and Road Forum in October, when he said China would remove all restrictions on foreign investment in the manufacturing sector.
(MUSIC}
XINHE: At an annual conference of EU diplomats held in Brussels on 6th November, European Commission President Ursula von der Leyen announced that the next EU-China summit is to take place in December.
MARIANN: President von der Leyen will be accompanied by European Council President Charles Michel to the first EU-China summit in four years to be held in person. The last round of EU-China summit was held via videoconference on 1st April 2022. Following the summit, President Michel visited Beijing in December and held meetings with Chinese President Xi Jinping and then Premier Li Keqiang. For her part, Ursula von der Leyen visited Beijing in early April this year. On both occasions, the European Chamber held meetings with the two European leaders and briefed them about the business environment in China ahead of their high-level meetings.
(MUSIC}
XINHE: The International Monetary Fund upgraded its growth forecast for China, but highlighted some problem areas—such as risks related to the property sector, local government debts, and financial stability—where further action is needed.
MARIANN: In a report released on 7th November, the IMF said it expects China’s gross domestic product to grow 5.4 per cent in 2023, upgrading its earlier forecast by 0.4 per cent. Pointing at a continued weakness in the country’s real estate market and faltering external demand, however, the IMF predicts that China’s GDP growth will slow to 4.6 per cent in 2024. Among the areas where the IMF recommended further policy action was support for the readjustment of China’s property sector and structural reforms aimed at addressing local government debt.
(MUSIC}
XINHE: The European Chamber has launched an event series on the ongoing global race in industrial strategy, in order to decode its implications on the outlook for both geopolitics and trade, as well as how it may impact the corporate strategies of multinational companies.
MARIANN: As the culmination of this event series, on 10th November, European Commissioner for Internal Market Thierry Breton will join a lunch meeting with the European Chamber’s members and share his insights on EU de-risking in the context of the bloc’s industrial strategy.
(MUSIC}
XINHE: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on the European Chamber’s second EU Tour of 2023, the Chamber’s statement on Li Keqiang’s passing, China’s manufacturing and services activity in October and the drop in profits at China’s larger industrial firms. From the Chamber’s side: join us on 3rd November online or in person in Beijing for the third event of Battling it out – Decoding the Global Industrial Strategy Race event series, during which experts will conduct a detailed examination of the EU’s, China’s and the US’ approach to developing clean technologies and becoming world leaders in this area through their respective industrial policy initiatives.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Official PMI, October (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202310/t20231031_1944037.html
Industrial profits, January-July (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202310/t20231027_1943958.html
European Chamber event
Battling it out – Decoding the Global Industrial Strategy Race: Clean Tech and Low Carbon Future
https://www.europeanchamber.com.cn/en/upcoming-events/24831/_Hybrid_Battling_it_out_Decoding_the_Global_Industrial_Strategy_Race_Episode_III_Clean_Tech_and_Low_Carbon_Future
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: On 26th October, the European Chamber co-hosted an event in Brussels with the China Chamber of Commerce to the EU, with the two sides exchanging views on the future of EU-China cooperation.
MARIANN: The event, which was the second roundtable dialogue that the two chambers co-hosted, was attended by about eighty guests from business and politics. Industry representatives from both sides presented the issues they are facing in the respective markets they operate in, and discussed potential areas where cooperation can be enhanced in the future. The event was organised as part of the European Chamber’s second EU tour of 2023. During the last week of October, 27 delegates from the European Chamber conducted over 50 meetings with stakeholders from the European Parliament, the European Commission as well as Brussels-based think tanks, partners and media. Following the trip to Brussels, Chamber President Jens Eskelund and other Chamber representatives also held meetings in several other European capitals, including Berlin and Paris.
(MUSIC}
XINHE: China’s former Premier Li Keqiang passed away on 26th October in Shanghai, at the age of 68. He served as the Premier of China’s State Council between 2013 and 2023.
MARIANN: The European Chamber is deeply saddened by the passing of former Premier Li Keqiang, who was an important interlocutor for the foreign business community. He was a pragmatic, forward-thinking man who placed great importance on the reform and opening of China’s economy. On the occasions that the European Chamber had the privilege to meet with him, he always paid close attention to the concerns of European companies operating in China.
(MUSIC}
XINHE: The rebound of China’s manufacturing activity did not prove to be long-lasting, as after only one month of increase, the official manufacturing purchasing manager’s index or PMI indicated contraction again in October.
MARIANN: Data released by China’s statistics bureau on 31st October revealed that despite expectations that the recovery in manufacturing activity would continue in October, the PMI dipped under the 50-point benchmark separating growth from contraction. A breakdown of the data based on company size showed that activity weakened at companies of all sizes, with only large manufacturing firms still able to maintain growth in October. Subindices showed that while production still expanded, new orders faltered.
The non-manufacturing PMI remained in expansion territory but indicated the weakest growth of the year thus far. Activity in the construction sector increased at a much slower pace than in September, but still maintained more momentum than the growth in services activity, which was the most modest recorded since China’s reopening in January.
(MUSIC}
XINHE: Profits at China’s larger industrial firms dropped 9 per cent year-on-year in the January-September period, according to data published by the National Bureau of Statistics on 30th October.
MARIANN: The rate of decline was not as pronounced as in the first eight months of 2023, and it was the most moderate all year. A breakdown of the data based on companies’ ownership structure showed that in the first nine months of the year, equity owned industrial firms have made the most profits in absolute terms, and the profits of state-owned industrial companies fell the most compared to last year.
(MUSIC}
XINHE: Faced with an increasingly unstable geopolitical and economic environment, industrial policy has become a core component on the agenda for the world’s three largest economies – the United States, China and the European Union. Their strategies and regulations on renewable and low-carbon energy technologies, raw materials and technologies of the future are likely to result in profound implications for global supply and value chains while reshaping industries, especially high-technology sectors such as semiconductors.
MARIANN: The European Chamber has launched an event series on the ongoing global race in industrial strategy, in order to decode its implications on the outlook for both geopolitics and trade, as well as how it may impact the corporate strategies of multinational companies.
XINHE: Join us on 3rd November online or in person in Beijing for the third event of this series, during which experts will conduct a detailed examination of the EU’s, China’s and the US’ approach to developing clean technologies and becoming world leaders in this area through their respective industrial policy initiatives.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s actual use of foreign investment in the first three quarters of 2023; on the newly announced export control on graphite; on China’s economic recovery showing signs of improvement in September and on the State Councils’ planned inspection into issues inhibiting the country’s swift economic rebound. From the Chamber’s side: at this year’s Carbon Neutrality Conference, on 30th October in Shanghai, participants will discuss the complexities of China’s journey towards a green future, while providing actionable insights and innovative solutions for sustainable business.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
MOFCOM on China’s Q3 FDI data (in Chinese)
http://www.mofcom.gov.cn/article/xwfb/xwfyrth/202310/20231003447557.shtml
Export control to be imposed on graphite (in Chinese)
http://www.mofcom.gov.cn/article/zwgk/gkzcfb/202310/20231003447368.shtml
September macroeconomic data (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202310/t20231018_1943655.html
http://www.stats.gov.cn/sj/zxfb/202310/t20231018_1943658.html
http://www.stats.gov.cn/sj/zxfb/202310/t20231018_1943654.html
State Council to inspect a host of issues impeding economic development
https://www.gov.cn/yaowen/liebiao/202310/content_6911139.htm
European Chamber event: 2023 Carbon Neutrality Conference
https://www.europeanchamber.com.cn/en/upcoming-events/24771/Carbon_Neutrality_Conference_2023_Revolutionising_Energy_Efficiency_and_Green_Energy_Procurement
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: In the first three quarters of 2023, China’s actual use of foreign investment decreased 8.4 per cent year-on-year, sinking slightly under RMB 920 billion.
MARIANN: In a written statement posted on its website, China’s Ministry of Commerce argued that the drop in FDI was in line with weak global economic recovery. It highlighted that in the first nine months of 2022, the actual use of FDI in China reached a record high, surging above RMB 1 trillion for the first time, therefore, even after a drop this year, the number was still relatively high compared to a historic average. The statement also pointed out that the structure of foreign investment has been changing, as for instance the amount of foreign capital injected into the manufacturing sector has been increasing. At the opening ceremony of the third Belt and Road Forum, held in Beijing on 18th October, Chinese President Xi Jinping announced the abolishment of any restrictions on foreign investment in China’s manufacturing sector.
(MUSIC}
XINHE: Starting from 1st December, China is imposing export controls on a three types of graphite materials and products made of these materials.
MARIANN: According to an announcement jointly issued by China’s Ministry of Commerce and the General Administration of Customs on 20th October, only holders of special permits will be allowed to export the listed materials. Among other industrial applications, graphite is used for making carbon fibre and electrodes.
The announcement came only a few days after the US further tightened its curbs on the export of AI chips and equipment used in semiconductor manufacturing to China.
(MUSIC}
XINHE: Official macroeconomic data from September indicated an improvement in China’s economic recovery.
MARIANN: Industrial production at larger firms increased 4.5 per cent year-on-year in September. Growth was recorded in 26 of the 41 surveyed sectors. Retail sales were up 5.5. per cent compared to the same period last year, expanding at the fastest pace since May. The rate of growth in sales of products and catering sales both inched up compared to August. Surveyed urban unemployment shrank to 5 per cent, which was the lowest level recorded in almost two years.
(MUSIC}
XINHE: China’s State Council will launch an inspection into issues inhibiting the country’s swift economic rebound, including problems related to the development of the private economy and the expansion of domestic demand.
MARIANN: In a statement issued on 23rd October, the State Council said it would initiate an investigation in sixteen cities and provinces of China and asked the public to provide information on related problems. For instance, among the issues impeding the development of private enterprises the statement listed arbitrary fines and the abuse of other punishment measures, the lack of uniformity in local standards and discriminatory treatment that favours state-owned firms.
The International Monetary Fund’s 2023 report on China identified the advancement of the public sector as a key factor weakening China’s productivity growth. The IMF’s report also highlights that, as state-owned enterprises tend to be less productive than their privately-owned counterparts, their continued prioritisation might further increase the productivity gap between China and advanced economies.
(MUSIC}
XINHE: As part of its 30/60 carbon neutrality goals, China set a goal for renewable energy to exceed fossil fuel capacity by 2025, a target that has already been reached two years ahead of schedule. Renewable energy sources, as China defines them, now make up over half of the country’s power capacity.
MARIANN: However, China’s energy consumption mix remains heavily reliant on fossil fuels, with China’s coal usage exceeding the rest of the world combined in 2022. With climate change-induced power shortages and extreme weather conditions becoming more frequent, the path towards carbon neutrality will be crucial for China to maintain its competitiveness as a global manufacturing powerhouse.
XINHE: Join us on 30th October in Shanghai at this year’s Carbon Neutrality Conference, where participants will discuss the complexities of China’s journey towards a green future, while providing actionable insights and innovative solutions for sustainable business.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s Q3 GDP growth; on the EU-China Strategic Dialogue; on China’s price indices in September and on the sharp fall of total value of China’s exports and imports in September. From the Chamber’s side: a flash survey was launched on 16th October to gauge the impact of China’s data regulations on European. A link and a password to the online questionnaire have been sent to primary contacts of member companies via email. By taking the survey, you can add your voice to our advocacy efforts on the topic.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China Q3 GDP (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202310/t20231018_1943654.html
EU-China High-level Strategic Dialogue
https://www.eeas.europa.eu/eeas/china-high-representativevice-president-josep-borrell-holds-12th-eu-china-strategic-dialogue_en
China official PPI/CPI September (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202310/t20231013_1943549.html
http://www.stats.gov.cn/sj/zxfb/202310/t20231013_1943548.html
China September foreign trade data (in Chinese)
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5427538/index.html
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5427627/index.html
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: China’s gross domestic product grew 4.9 per cent in the third quarter of 2023, compared to the same period last year, according to data released by China’s statistics bureau on 18th October.
MARIANN: China’s GDP growth in the third quarter decelerated form the previous quarter but its pace was faster than what analysts had expected. Quarter-on-quarter, China’s GDP increased 1.3 per cent.
(MUSIC}
XINHE: On 12th October, the European Union’s foreign policy chief Josep Borrell arrived to China for his first visit since the pandemic.
MARIANN: During his visit the EU’s high representative for foreign affairs and security policy co-chaired the EU-China Strategic Dialogue together with Chinese foreign minister Wang Yi in preparation for the next bilateral summit that is to take place before the end of the year. During their discussion, the two sides reviewed developments in the EU-China relations, with both sides expressing their will to maintain a stable relationship.
During his visit to Shanghai, a Chamber delegation hosted High Representative Borrell for a luncheon meeting, where they presented to him the Chamber’s Position Paper with the key recommendations for improving the business environment for European business in China.
(MUSIC}
XINHE: According to data released by the National Bureau of Statistics on 13th October, the drop in producer prices in China continued to slow in September, while consumer prices stagnated as consumption remained weak.
MARIANN: The prices producers charge their clients decreased 2.5 per cent year-on-year in September. The main reason behind this was a drop in raw material prices. While on a year-on-year basis, producer prices have been in decline for the twelfth consecutive month in September, the rate of decrease has been gradually slowing since June.
Consumer prices remained unchanged from a year ago in September, as food prices continued to drop, while prices for services – including in areas such as education, culture and entertainment – rose at a relatively fast pace.
(MUSIC}
XINHE: The total value of China’s exports and imports both fell sharply in September, although the rate of decrease showed some easing compared to the previous months.
MARIANN: According to data published by the China’s General Administration of Customs on 13th October, the total value of Chinas exports decreased 6.2 per cent year-on-year in dollar terms. This was the mildest drop recorded in the past five months, and significantly less than analysts’ forecasts. The total value of imports also fell 6.2 per cent compared to the same period last year, and for the eleventh month in a row.
In the first nine months of 2023, the value of China’s exports to the EU reached over USD382 billion, which indicated a year-on-year drop of 10.6 per cent. Meanwhile, China’s imports from the EU fell 2.1 per cent to USD212 billion. The EU remained China’s second largest trading partner behind the countries of the Association of Southeast Asian Nations, and followed by the US.
(MUSIC}
XINHE: On 16th October, the European Chamber launched a flash survey to gauge the impact of China’s data regulations on European business. A link and a password to the online questionnaire have been sent to primary contacts of member companies. At some companies, the best suited respondent would be the Data Protection Officer. All information received from members will be anonymised and kept strictly confidential.
MARIANN: The aim of the flash survey is to better understand the impact of China’s existing, and proposed data regulations on European business, identify what improvements are still needed on top of the proposed ones, and determine how to best assist in advocating on this issue.
XINHE: Members of the European Chamber’s Shanghai Chapter received invitations to participate in two surveys this week, as the Shanghai Chapter launched a local flash survey dedicated to the topic of the China International Import Expo.
MARIANN: Surveys like these are instrumental to our work as a Chamber, and help us to leverage the findings from our members into actionable advocacy points with our stakeholders in both China and Europe. We hope you take the brief time to answer our questions and add your voice to these efforts.
(MUSIC}
XINHE: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.
This episode contains segments on a draft regulation issued by the Cyberspace Administration of China; on manufacturing and services activity in China in September; on the key findings of a joint report by the Rhodium Group and the Atlantic Council on China’s economic reform progress and on China’s Q3 SME Development Index. From the Chamber’s side: join us on 19th October in Nanjing or online to hear experts’ insights on ESG in the China market and find out their recommendations for designing a fitting strategy both for their ESG compliance and for asserting their intellectual property rights in the context of ESG.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
CAC’s draft regulation on cross-border data flows
https://mp.weixin.qq.com/s/HUKJDuZz_lHg-K7CtL7fUw
China official PMI (September)
http://www.stats.gov.cn/sj/sjjd/202309/t20230928_1943292.html
Rhodium Group/Atlantic Council’s GeoEconomics Center China Pathfinder 2022
Running Out of Road: China Pathfinder Annual Scorecard
Q3 SME Development Index
http://english.news.cn/20231010/784bc60757c34dc6adf6ddd61671b6c2/c.html
European Chamber event: Managing ESG in China: new compliance trends and IP considerations
https://www.europeanchamber.com.cn/en/upcoming-events/24734/Managing_ESG_in_China_new_compliance_trends_and_IP_considerations
Transcript:
KALINA: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
KALINA: On 28th September, the Cyberspace Administration of China issued a call for comments on a draft regulation aimed at standardising and promoting cross-border data flows.
MARIANN: The draft regulation relieves companies of some of the difficulties with cross-border data transfer and personal information protection partly by specifying a list of exemptions to relevant obligations and partly by providing more clarity on how data handlers can verify what is qualified by authorities as ‘important data’. The release of the draft is seen as a signal from the Chinese Government that it is listening to businesses’ concerns and is ready to take steps to address them, which is a positive. The European Chamber will continue its engagements with the relevant authorities to provide constructive recommendations for the optimisation of the data regulations.
(MUSIC}
KALINA: According to the National Bureau of Statistics, manufacturing activity in China expanded again in September, ending a contraction streak that lasted for five consecutive months.
MARIANN: The official manufacturing purchasing manager’s index or PMI stood slightly above the 50-point benchmark separating growth from contraction. A growth in activity was registered in 11 out of the 21 surveyed sectors. Subindexes showed that supply and demand both expanded at a slightly faster pace than in August. A breakdown of the data according to company size indicated that while the growth in activity accelerated at larger manufacturing firms, the subindexes for small and medium size companies still remained below the 50-point benchmark.
The official non-manufacturing PMI picked up further in September, with services and construction activity both expanding faster than in August.
(MUSIC}
KALINA: According to the Rhodium Group’s and the Atlantic Council’s joint initiative, China Pathfinder, China’s annual economic benchmarks indicated that in 2022 the country made some progress on reform. However, without a change in course, China’s economic growth is bound to slow further.
MARIANN: Key findings of the report indicated that while China has made significant progress in the openness of its trade, and to some extent of its financial system too, in other areas, such as market competition and innovation, it moved farther away from market norms. The report argued that Chinese policymakers should change trajectory in order to break away from the trend of economic slowdown. As examples of recommended positive changes they listed abandoning the practice of setting a GDP target, and rebalancing fiscal burdens to alleviate some pressure on local governments.
(MUSIC}
KALINA: The performance of small and medium-sized enterprises in China improved slightly in the third quarter of 2023, according to a survey among 3000 SMEs from eight major industries.
MARIANN: Data from the China Association of Small and Medium Enterprises’ survey indicated that while activity increased, the SME development index still remained below 100-point critical value of prosperity. The association conducting the survey highlighted that while SMEs in a number of sectors were able to reverse a previous downward trend, the recovery in activity is still lacking solid foundations.
The European Chamber’s Business Confidence Survey 2023 showed that SMEs were substantially impacted by pandemic-related containment measures in 2022, with 36 per cent reporting y-o-y decreases in their bottom lines. In comparison, only 11 per cent of large European companies with over 1000 employees reported that their revenues decreased in 2022.
(MUSIC}
KALINA: With ever-comprehensive policy guidelines and developing new trends, ESG has become a hot topic in China that companies, big or small, cannot afford to ignore.
MARIANN: A comprehensive ESG strategy that takes into account the newest reporting requirements and trends while also meeting not only the sustainability targets but also profit margins of companies is a must.
KALINA: Join us on 19th October in Nanjing or online to hear experts’ insights on ESG in the China market and find out their recommendations for designing a fitting strategy both for their ESG compliance and for asserting their intellectual property rights in the context of ESG.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
KALINA: In the meantime, please find useful links in the episode notes.
This episode contains segments on the 10th EU-China High-level Economic and Trade Dialogue; on a series of high-level dialogues held between the EU and China in areas including digital policies and the circular economy and on China’s pledge to promote the green development of the Belt and Road Initiative. From the Chamber’s side: join us on 11th October to explore the current landscape of data sharing for enterprises.
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
10th EU-China High-level Economic and Trade Dialogue (HED)
https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4609
1st EU-China High Level Policy Dialogue on Circular Economy
https://www.eeas.europa.eu/delegations/china/european-commissioner-sinkevi%C4%8Dius-co-chairs-1st-eu-china-high-level-policy-dialogue-circular-economy_en?s=166
2nd EU-China High-level Digital Dialogue
https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4488
China’s pledge to promote the green development of its BRI
https://english.www.gov.cn/news/202309/26/content_WS6512845dc6d0868f4e8dfc3b.html
Chamber event: Battling it out – Decoding the Global Industrial Strategy Race, Episode 3: Data Sharing in the Automotive Industry and Beyond
https://www.europeanchamber.com.cn/en/upcoming-events/24736/Battling_it_out_Decoding_the_Global_Industrial_Strategy_Race_Episode_III_Data_sharing_in_the_automotive_industry_and_beyond
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: The 10th EU-China High-level Economic and Trade Dialogue or HED took place on 25th September in Beijing. The two sides discussed a range of economic and financial issues with relevance to their trade and investment cooperation.
MARIANN: The dialogue was co-chaired by European Commission Executive Vice President Valdis Dombrovskis and Vice Premier of the State Council He Lifeng. The European Chamber has been in close and regular contact with both the EU Delegation and the Commission in the preparatory stages for this dialogue. In this context, it has provided input on some of the key challenges experienced by European industry in China – both from a cross-sectoral and a sector-specific perspective. The Chamber welcomes commitments made by the Chinese side to investigate issues that have created market access barriers for European companies in China, and hopes to see tangible steps being taken to address them. In this light, the agreement to ensure easier cross-border flows of non-personal data was seen as a positive.
As EVP Dombrovskis highlighted, the EU-China relationship is at a crossroads. The Chamber hopes that through continued engagement the two sides can navigate a path between mitigating risks where really necessary and strengthening cooperation in areas where it makes sense.
(MUSIC}
XINHE: The EU and China also held a series of other high-level dialogues in late September on areas including the circular economy, digital issues and water policy.
MARIANN: At the digital dialogue, exchanges were focused on artificial Intelligence and ICT standards as well as challenges experienced by European businesses in the digital field. The two sides signed an action plan to advance the safety of non-food consumer products that are sold online.
At the policy dialogue on the circular economy, the two sides discussed the topics of plastics, batteries and remanufacturing with a view to potentially enhance cooperation in these areas both on the bilateral and on a multilateral level.
(MUSIC}
XINHE: In a white paper released on 26th September, China pledged to continue advancing the green development of its Belt and Road Initiative or BRI. The pledge came ahead of the 10-year anniversary of China launching the initiative with the stated aim of improving global connectivity and delivering economic benefits through infrastructure development.
MARIANN: The white paper published by the State Council’s Information Office focussed on China’s proposals for the shared future of the global community. In this context, the Chinese Government emphasised its commitment to promote the green development of the BRI in a way that it is aligns with the UN’s agenda for sustainable development.
(MUSIC}
XINHE: Faced with an increasingly unstable geopolitical and economic environment, industrial policy has become a core component on the agenda for the world’s three largest economies – the United States, China and the European Union. Their strategies and regulations on renewable and low-carbon energy technologies, raw materials and technologies of the future are likely to result in profound implications for global supply and value chains while reshaping industries, especially high-technology sectors such as semiconductors.
MARIANN: The European Chamber has launched an event series on the ongoing global race in industrial strategy, in order to decode its implications on the outlook for both geopolitics and trade, as well as how it may impact the corporate strategies of multinational companies.
XINHE: Join us on 11th October online or in person in Beijing for the third event of the series, which will focus on the EU’s cutting-edge strategies and regulations for data-sharing. Experts will explore how the automotive industry can overcome data sharing challenges and provide a comprehensive analysis and invaluable insights into the current landscape of data sharing for enterprises.
(MUSIC}
MARIANN: Thanks for listening. We will be back with new episodes after the Golden Week holiday.
XINHE: We wish you a happy Mid-Autumn Festival and National Day Holiday. In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s August macroeconomic data that indicated a slight improvement in the country’s economic performance; on the European Commission’s announcement regarding an anti-subsidy investigation into Chinese electric vehicles; on the Rhodium Group’s newly published research note on the challenges of diversifying away from the Chinese market and on China’s gradually increasing R&D expenditure. From the Chamber’s side: the European Chamber published its European Business in China Position Paper 2023/2024 on 20th September. The report details the challenges faced by European companies operating in China and provides more than 1,000 constructive recommendations to the Chinese Government on how they can be resolved.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China official macroeconomic data, August (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202309/t20230915_1942848.html
2023 State of the Union Address by President von der Leyen
https://neighbourhood-enlargement.ec.europa.eu/news/2023-state-union-address-president-von-der-leyen-2023-09-13_en
Rhodium Group research note on diversification away from China
https://rhg.com/research/irrational-expectations-long-term-challenges-of-diversification-away-from-china/
NBS statement on China’s 2022 R&D spending
http://www.stats.gov.cn/sj/sjjd/202309/t20230918_1942919.html
European Business in China Position Paper 2023/2024 download for free
https://www.europeanchamber.com.cn/en/publications-position-paper
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: August macroeconomic data indicated some warming in China’s economic performance as industrial production and retail sales both expanded at a faster pace than expected.
MARIANN: Industrial activity for larger companies grew 4.5 per cent year-on-year, which was the strongest pace of growth recorded in the past four months. Production picked up at an especially strong rate in the manufacturing sector. Retail sales also fared better than in the previous two months, expanding 4.6 per cent year-on-year in August. The sales of goods improved from the previous month, and grew at the fastest pace since May. At the same time, the rate of expansion of catering sales—while still higher than the sales of goods—has been on a decline for four months in a row. China’s surveyed urban unemployment rate stood at 5.2 per cent in August, which was slightly milder than in the previous month.
(MUSIC}
XINHE: On 13th September, European Commission President Ursula von der Leyen announced an anti-subsidy investigation into Chinese electric vehicles.
MARIANN: In her annual state of the Union address to EU lawmakers, von der Leyen highlighted concerns about the distorting impact state subsidies can have on fair competition. The European Chamber has been consistently advocating for fair competition and a level-playing field and believes that subsidies, if and when used, should be done in a limited capacity and should be transparently and fairly applied so that they are available to all players in a given industry. As free and open markets depend on rules-based trade practices, the Chamber expects that the EU’s investigation will be fact based, with the aim of ensuring that these principles remain intact.
(MUSIC}
XINHE: In a research note published on 13th September, the Rhodium Group finds that even though several companies have already begun diversifying away from China, this is a challenging endeavour even in the long-term.
MARIANN: The New York-based research provider found that as China is deeply intertwined with global value chains, diversifying away from the country might not result in reduced reliance on Chinese inputs and suppliers in the short- to medium term. Even if companies shift a significant proportion of their production out of China, given its dominant manufacturing sector, the country’s share of global exports, manufacturing or supply chains is not expected to suffer a substantial blow. Therefore, the Rhodium Group warned that it will take years for advanced economies to achieve the objectives behind their ‘de-risking’ policies, and policymakers should adjust their timeframes for reducing dependencies accordingly.
(MUSIC}
XINHE: According to China’s statistics bureau, the country spent over 3 billion yuan on research and development in 2022, up 10 per cent from the previous year.
MARIANN: In its push for high-quality development, China has been gradually increasing its R&D expenditure. At constant prices—which are adjusted to take into account the effect of inflation—R&D spending edged up 7.7 per cent year-on-year, which is above the annual growth target rate of 7 per cent set out in the 14th five-year plan. The total innovation expenditure in 2022 was equivalent to 2.54 per cent of China’s GDP. While the largest amount of money was channeled towards experimental development, funding of basic research increased at the fastest pace in 2022.
(MUSIC}
XINHE: On 20th September, the European Chamber published its European Business in China Position Paper 2023/2024. The report details the challenges faced by European companies operating in China and provides more than 1,000 constructive recommendations to the Chinese Government on how they can be resolved.
MARIANN: It provides a blueprint for attracting and retaining foreign investment in China, while also addressing many of the structural issues that are hindering the country’s economic development.
XINHE: You can download the full report from the Chamber’s website for free.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s slowing decline in exports and imports in August; on a moderate increase in consumer prices that worked towards easing deflation worries and on a slight improvement in the performance of SMEs in August. From the Chamber’s side: the European Chamber will publish its European Business in China Position Paper […]
This episode contains segments on the extension of China’s IIT policy for foreign nationals; on China’s manufacturing activity that continued to decline in August; on the slowing decline of the profits of China’s larger industrial firms; on China’s newly established bureau that is to promote the development of the country’s private economy. From the Chamber’s side: join us online or in person in Beijing on 13th September to hear prominent experts discuss issues related to FDI in China.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Announcement on the Continuation of the Implementation of Non-taxable Allowances of Individual Income Tax Policies for Foreign National individuals
http://szs.mof.gov.cn/zhengcefabu/202308/t20230828_3904329.htm
China Official Manufacturing and Services PMI, August (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202308/t20230831_1942429.html
China Industrial Profits, January-July (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202308/t20230827_1942335.html
New bureau set up to promote the development of China’s private economy
https://english.www.gov.cn/news/202309/04/content_WS64f56d99c6d0868f4e8df14a.html
Chamber event: Explore the new landscape of foreign direct investment in China
https://www.europeanchamber.com.cn/en/upcoming-events/24542/_Hybrid_Explore_the_new_landscape_of_foreign_direct_investment_in_China
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
XINHE: On 29th August, China’s State Council and the State Taxation Administration jointly announced that they would extend the current individual income tax regime for foreign nationals, under which certain expenses—including housing, children’s education and language training—are treated as non-taxable.
MARIANN: This is positive news for the foreign business community, as the extension can help to stem the outflow of foreign talent that has taken place over the last few years. Announced on the margins of the start of the new school year, it is especially welcome news for families that have made the decision either to come to or remain in China. However, it is likely that more policies that can attract new talent will still be needed.
(MUSIC}
XINHE: Manufacturing activity in China continued to decline in August, while the rate of expansion in services activity sank to the lowest level recorded all year thus far.
MARIANN: China’s official manufacturing purchasing managers’ index or PMI climbed to the highest level of the past five months, but it still remained slightly under the 50-point benchmark separating growth from contraction. Activity at larger manufacturing firms expanded in August, but continued to shrink at small- and medium-sized companies. The increase in production accelerated from July, and new orders also expanded after an extended period of decline. At the same time, however, manufacturing firms seemed to have stayed cautious about hiring, as employment levels dipped slightly further in August.
Meanwhile, the non-manufacturing PMI showed a weakened rate of growth in August, compared to data from the previous seven months. Activity in the construction sector strengthened from July, but grew at the slowest pace since the beginning of 2023 in the services sector, primarily due to a significant drop in demand.
(MUSIC}
XINHE: The year-on-year fall in profits at larger industrial firms in China slowed further in the January-July period compared to the first six months of 2023, but was still significant at 15.5 per cent.
MARIANN: Out of the 41 sectors surveyed by China’s National Bureau of Statistics, 28 recorded a year-on-year drop in profits in the first seven months. While energy producers and electrical machinery and equipment manufacturers saw their profits rise sharply, firms in the ferrous metal smelting and rolling processing industry, as well as in the coal and other fuel processing industries continued to suffer stark losses to their profits compared to the same period last year.
(MUSIC}
XINHE: On 4th September, China’s top economic planner, the National Development and Reform Commission announced the establishment of a new bureau that is to promote the development of the country’s private economy.
MARIANN: The bureau will work under the Commission, and it will be responsible for formulating policies to advance the growth of private investment, for strengthening policy coordination and for ensuring that relevant measures get implemented in a timely and efficient manner. The new bureau’s stated aim of helping to improve the international competitiveness of private companies raises a question as to whether this initiative will include foreign enterprises.
(MUSIC}
XINHE: As Beijing has been trying to balance the priorities of national security and economic growth, Chinese policymakers have given mixed signals to foreign investors so far in 2023. On one side there are regulatory efforts, such as the newly introduced Anti-espionage Law and tightened supervision over data, that could negatively impact foreign companies’ investment decisions. On the other, the State Council has released a guideline to optimise the business environment for foreign investors.
MARIANN: This complex context has led to discussions on whether China is still an attractive investment destination, especially amid the ongoing global trend of supply chain diversification prompted by the COVID-19 pandemic as well as geopolitical factors.
XINHE: Join us online or in person in Beijing on 13th September to hear prominent experts discuss issues related to FDI in China and explore questions, such as what strategic and tactical approaches should multinationals have in place to manage risks and realise opportunities in the Chinese market.
(MUSIC}
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode contains segments on China’s FDI that dropped at the fastest rate recorded in over three years during the first seven months of 2023; on Chinese Premier Li Qiang’s emphasis on advancing the country’s digital economy as a means to support its economic recovery and high-quality development; on China’s central bank hinting at possible […]
This episode contains segments on the State Council’s newly released document aimed at improving the environment for foreign investment; on the decline in China’s producer and consumer price indices; on the latest development index of SMEs and on China’s slower-than-expected industrial production growth in July as well as the lowest expansion in retail sales this year. From […]
This episode contains segments on the accelerating decline of China’s foreign trade; on the phone call between High Representative of the EU for Foreign Affairs and Security Policy, Josep Borrell and Chinese Foreign Minister Wang Yi with the former invited to visit Beijing this autumn; on the 26 new measures announced by China’s Ministry of […]
This episode contains segments on China’s new policy incentives to encourage domestic consumption; on China’s official manufacturing PMI that contracted in July amid weak demand with the employment subindex dropping to the lowest level since January; on profits at larger industrial firms in China that dropped 16.8 per cent in the first half of 2023 […]
This episode contains segments on China’s recent pledges to promote the development of private businesses and private investment; a briefing session for the foreign business community on recent laws and policies, including cross-border data transfer, the Anti-Espionage Law and export controls organised by China’s Ministry of Commerce and the announcements by Chinese mobile payment platforms […]
This episode contains segments on China’s Q2 GDP growth data and other economic indicators, such as industrial production, retail sales and foreign trade data from the first half of 2023 and June. China’s industrial production expanded 4.4% in June but the increase in retail sales dropped; the total value of China’s exports fell at the […]
This episode contains roundtable discussion with foreign companies in healthcare-related industries held by the Ministry of Commerce, with comments from Annie Yin, chair of the European Chamber’s Healthcare Equipment working group; the fourth China-EU High Level Dialogue on Environment and Climate in Beijing; China’s producer and consumer price index in June; and a symposium on […]
This episode contains the European Council conclusions on the EU’s relations with China; the newly adopted Law on Foreign Relations of the People’s Republic of China; the official purchasing managers’ index (PMI) and the Caixin China General Manufacturing PMI in June. From the Chamber side, join the next session in the Insight China series on […]
This episode covers the tourism data during the Dragon Boat Festival; Chinese Premier Li Qiang’s visit to German and France; profits of China’s larger industrial firms in the first five months of 2023; and heat waves putting pressure on China’s power supply. From the Chamber side, the latest issue of EURObiz on Environmental, Social and […]
This episode covers industrial production, retail sales and unemployment data in May; foreign direct investment (FDI) in China in the first five months of 2023; and Chinese Premier Li Qiang’s visit to Germany. From the Chamber side, the Business Confidence Survey 2023 was released on 21st June and is available to download here. Contact: We’d […]
This episode covers China’s producer and consumer prices indexes in May; a European Council on Foreign Relations report on where European member states’ stand in a potential US-China conflict; installed capacity of non-fossil fuel energy sources in China; and a new series of measures on reducing costs for companies. From the Chamber side, join the […]
This episode contains China’s import and export data in May; China-European Business Forum organised by the Tianjin Municipal Government, with comments from Christoph Schrempp, chair of the European Chamber’s Tianjin Chapter; manufacturing and services activity data in May released by Caixin; and Rhodium Group’s report on local government debt and China’s economic growth prospect. From […]
This episode covers the Chamber’s newly elected executive committee; manufacturing and services activity in May; and profits of China’s larger industrial firms in the first four months of 2023. From the Chamber side, join the first episode of a new event series on global industrial strategies on 8th June, focussing on the United States’ Chips Act and the global semiconductor ecosystem.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Chamber AGM:
https://www.europeanchamber.com.cn/en/national-news/3522
Official PMI May (in Chinese):
http://www.stats.gov.cn/sj/zxfb/202305/t20230531_1940267.html
China’s January-April industrial profits (in Chinese):
http://www.stats.gov.cn/sj/zxfb/202305/t20230526_1940198.html
European Chamber event series: Battling it out – Decoding the Global Industrial Strategy Race
https://www.europeanchamber.com.cn/en/upcoming-events/24120
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
XINHE: On 24th May, the European Chamber held its Annual General Meeting in Beijing, during which the Chamber’s leadership was elected for the next two years.
MARIANN: Jens Eskelund was elected to serve as Chamber president. He will be accompanied by vice presidents Stefan Bernhart, Miguel Montoya and Bruno Weill at the helm of the Chamber. Members of the Shanghai, South China and Southwest China chapters had previously elected Carlo D’Andrea, Klaus Zenkel and Massimo Bagnasco as their respective chairs, all of whom will also serve as national vice presidents. Xiaobo Zhang was elected for a second consecutive term as treasurer. In his first address to the members, President Eskelund noted that with the diversity of industries and experience that the newly elected executive committee brings to the table, he feels assured that they will continue to deliver high-level services to members.
(MUSIC)
XINHE: Manufacturing activity in China continued to shrink in May, with the rate of contraction picking up speed from the previous month, contrary to analysts’ expectations that had forecast renewed growth.
MARIANN: The official manufacturing purchasing manager’s index, or PMI, dropped to the lowest level since December, and signalled contraction for the second month in a row. Supply and demand both continued to fall in May, and at a faster pace than in April, with the decrease in new orders steeper than in production. The decline in activity also impacted staffing levels, with manufacturing firms shedding jobs as a result. Despite the worse-than-expected data, companies surveyed by the National Bureau of Statistics reported growing optimism about the business outlook for the year ahead.
While services activity maintained growth in May, the rate of expansion slowed from April, and was slightly below analysts’ forecasts.
(MUSIC)
XINHE: According to data released by the National Bureau of Statistics on 27th May, profits of China’s larger industrial firms continued to fall in the first four months of the year amid weak demand and decreasing producers’ prices.
MARIANN: While the rate of decrease narrowed compared to the first quarter, the January-April data still showed the third steepest decline in two years, signalling a 20.6 per cent drop year-on-year. The breakdown of the data indicated that profits fell at an especially steep rate in the private sector and among equity-owned industrial companies. Among the 41 surveyed sectors, profits shrank for 27, with ferrous metal smelting and rolling processing firms taking the biggest hit: a more than 99 per cent year-on-year plunge in profits.
(MUSIC)
XINHE: Faced with an increasingly unstable geopolitical and economic environment, industrial policy has become a core component on the agendas of the world’s largest three economies – the United States, China, and the European Union. Their strategies and regulations on renewable and low-carbon energy technologies, raw materials and technologies of the future are expected to have profound implications on the global supply and value chains.
MARIANN: The European Chamber is launching an event series under the title ‘Battling it out – Decoding the Global Industrial Strategy Race’, to provide a comprehensive understanding on the industrial strategies being adopted by the world’s three largest economic superpowers and their implications on both state and industry players.
XINHE: Join the first event of the series online on 8th June to find out what implications the US’ CHIPS Act—which was signed into law in August 2022—may have on the global semiconductor ecosystem. Guest speakers will also provide insights on the US-China technology war from the perspective of the EU and European industry, and market analysis.
(MUSIC)
MARIANN: Thanks for listening. Tune in again next week.
XINHE: In the meantime, please find useful links in the episode notes.
This episode covers the resumption of international cruises, with comments from Tiger Young, chair of the European Chamber’s Maritime Manufacturing and Industrial Services Working Group; government plans for establishing a unified national market; and foreign direct investment into China in the first four months of 2023. From the Chamber side, the inaugural Government Affairs Conference will be held on 7th June in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Resumption of international cruise transport (in Chinese):
https://www.chinanews.com.cn/cj/2023/05-17/10009130.shtml
January-April official FDI data (in Chinese):
http://www.mofcom.gov.cn/article/xwfb/xwsjfzr/202305/20230503410374.shtml
Rhodium Group report on European FDI in China:
https://rhg.com/research/the-chosen-few/
State Council meeting on plan to establish unified national market:
https://english.www.gov.cn/news/202305/20/content_WS64680365c6d03ffcca6ed336.html
Government Affairs Conference 2023: Rebuilding Trust for Collaboration
https://www.europeanchamber.com.cn/en/upcoming-events/24002
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 15th May, the Shanghai Municipal Government approved a plan aimed at resuming international cruises from Shanghai’s ports after cruise transport was shut down for more than three years due to the COVID-19 pandemic.
MARIANN: An original pilot plan for the resumption of international cruise activities was issued by the Ministry of Transport at the end of March, with Shanghai and Shenzhen selected to trial the reopening of cruise routes. The newly approved plan details the next stage of restarting international cruises. The Shanghai government also emphasised the need to further develop destination ports, and pledged to build a world-class cruise ship design and manufacturing assembly lane, as well as an Asia-Pacific distribution centre for cruise ship materials in Shanghai.
RUI: Commenting on the resumption of international cruise transport is Tiger Young, chair of the European Chamber’s Maritime Manufacturing and Industrial Services working group.
TIGER YOUNG: In the end of March the government announced the restart plan for the Chinese cruise market, which is of course good news for the whole industry. Right now, they have only two to three Chinese companies that announced their itinerary from Shanghai and Shenzhen to neighbouring countries. For international companies, we might take six to ten months of preparation before bringing our ships back to China. Right now, there are still two major changes lying ahead. The first one: group travel to South Korea and Japan is still not allowed. Number two: online and offline travel agencies are still not permitted to sell the cruise tickets. So, we still need further dialogue with policymakers on such issues.
(MUSIC)
RUI: At an executive meeting held on 19th May and chaired by Premier Li Qiang, China’s State Council discussed the plan for establishing a unified national market.
MARIANN: The plan entails building a ‘highly efficient, rules-based’ unified national market that seeks to break down local protectionism and market segmentation. While it has been on the table for over a year, the plan has so far only been broadly outlined. Many listed items relate to longstanding issues that had been on Chinese planners’ agenda already and were simply brought together this time under one umbrella.
The State Council meeting highlighted the need for deepening reform and further optimising the protection of property rights, market access and fair competition. These are all welcome intentions, however, the plan has to be followed by concrete action, as that will be key to boosting China’s economic efficiency and attractiveness as an investment destination for international companies.
(MUSIC)
RUI: According to data released by China’s Ministry of Commerce on 17th May, in RMB terms, the actual use of foreign direct investment grew at the slowest pace in almost three years in the first four months of the year compared to the same period last year.
MARIANN: While the RMB-denominated data showed a 2.2 per cent increase in foreign-direct investment, in dollar terms, FDI actually shrank 3.3 per cent in the January-April period, year-on-year, amounting to 73.5 billion dollars. Without providing the amounts or a comparison, the ministry’s statement also highlighted that investment from France surged to more than five and a half times year-on-year in the first four months of 2023, while investments from the United Kingdom more than tripled in the same period. According to a 2022 report from the Rhodium Group, France and the UK are both among the four countries that made up the vast majority of European investment to China in recent years. In 2021, France contributed 10 per cent, while the UK made up 20 per cent of all European investment into China.
(MUSIC)
RUI: On 7th June, the European Chamber will be hosting its first Government Affairs Conference, with the theme ‘Rebuilding Trust for Collaboration’.
MARIANN: The conference will provide a platform for exchanging insights and discussing the values and practices of government affairs in China. It will also provide attendees with analysis on current economic and political trends, and explore the challenges and opportunities that foreign enterprises are facing in the China market.
RUI: Join our event to get a better understanding of the broader state of EU-China relations and China’s economic recovery strategy following its reopening earlier this year. Experienced government affairs professionals and senior executives from a variety of industries will share their observations on navigating the current complex political environment and how to advise European corporate headquarters on the best China strategy for business development.
(MUSIC)
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode covers China’s carbon emissions in the first quarter of 2023, with comments from Clement Lix, vice chair of the European Chamber’s Energy Working Group; producer and consumer prices in April; industrial production activity, retail sales and urban unemployment data in April. From the Chamber side, South China Chapter attended a meeting with the Guangdong governor.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s CO2 emissions hit Q1 record high after 4% rise in early 2023
https://www.carbonbrief.org/analysis-chinas-co2-emissions-hit-q1-record-high-after-4-rise-in-early-2023/April official CPI/PPI (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202305/t20230511_1939347.html
April official macroeconomic data (in Chinese):
http://www.stats.gov.cn/sj/zxfb/202305/t20230516_1939486.html
Meeting with Governor Wang Weizhong of Guangdong Province:
https://www.europeanchamber.com.cn/en/lobby-actions/6343
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: A new analysis by the Center for Research on Energy and Clean Air, published by Carbon Brief on 12th May found that China’s carbon emissions reached a record high for the first quarter of 2023 as the government put the focus on economic recovery.
MARIANN: While the analysis expects this trend to continue in the rest of the year, it also sees the possibility for emissions to peak and enter into a structural decline, as China is increasing its capacity of electricity generation from non-fossil sources.
RUI: Commenting on the key findings of the analysis and the trends looking ahead is Clement Lix, vice chair of the European Chamber’s Energy working group.
CLÉMENT LIX: Power production is a major contributor to China’s emissions. With a focus on energy security and stability, it is still largely based on coal with a recent increase of new coal power plants authorisation. Besides, we see interesting trends, as for the first time the non-fossil power capacity and building nuclear and all types of renewable [capacities], surpasses fossil one thanks to a tremendous pace of solar and wind installation. There will be growing need for energy storage, where battery, hydro, liquid air storage or hydrogen production are areas for collaboration with European companies. Electricity markets are going through the regulation. European companies are willing to engage with the Chinese energy ecosystem with their experience in the field and their digital solutions for energy efficiency and virtual power plants.
(MUSIC)
RUI: Producer price deflation continued in April, while consumer prices only moderately increased compared to the same period last year, according to data released on 11th May by the National Bureau of Statistics.
MARIANN: On a year-on-year basis, prices paid by wholesalers shrank at the fastest pace in almost three years, and for the seventh month in a row. The contraction was only moderate month-on-month, but even in a monthly comparison, factory gate prices have not increased since last November.
The year-on-year rise in consumer prices slowed for the fourth consecutive month in April, shrinking to the lowest level since early 2021. On a monthly basis, the drop in prices continued the slowing trend of the previous two months.
(MUSIC)
RUI: Macroeconomic data released by China’s National Bureau of Statistics on 16th May suggests an uneven recovery in production and consumption, with youth unemployment hitting a record high in April.
MARIANN: The rate of expansion of production activity at larger industrial firms further accelerated in April compared to the same period last year. However, the year-on-year comparison might distort the picture about this year’s recovery trend, as in April 2022, the disruptive impact of Shanghai’s lockdown sent industrial production to contract for the first time since the initial onset of the COVID-19 pandemic in China. Therefore, the month-on-month data might provide a better indication of China’s current economic recovery. Compared to the previous month, industrial production shrank 0.47 per cent, following a slight month-on-month increase in March, indicating a slowing trend overall.
Similarly, retail sales data also showed some discrepancy: while the year-on-year data signaled the fastest expansion recorded in over two years, on a month-on-month basis, the rate of growth was only the second fastest this year.
The surveyed urban unemployment rate dropped slightly from March. However, youth unemployment hit record high in April, with 20.4 per cent of people between the ages of 16 and 24 out of a job in China’s big cities.
(MUSIC)
RUI: On 11th May, Fabian Blake, vice chair of the European Chamber’s South China Chapter, attended a roundtable meeting with Wang Weizhong, governor of Guangdong Province.
MARIANN: At the event, Mr Blake explained the Chamber’s concerns regarding various factors impacting member companies, including the latest updates to the Greater Bay Area Preferential Individual Income Tax policy, as well as government support for SMEs and the decarbonisation roadmap for companies.
RUI: The governor expressed his hope that the Chamber’s member companies would increase their investments in Guangdong and pledged efforts to provide logistics support and high-quality services to companies wishing to develop their operations in the province.
(MUSIC)
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode contains manufacturing activity in April; the direction of China’s economy in the first quarter of 2023 outlined in a third-party report; signals from April Politburo meeting on China’s economy; and foreign trade data in April. From the Chamber side, recent high-level engagements with key interlocutors were introduced.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Official April PMI (in Chinese):
http://www.stats.gov.cn/sj/sjjd/202304/t20230429_1939137.html
Caixin China General Manufacturing PMI, April:
https://www.pmi.spglobal.com/Public/Home/PressRelease/7e8810a9a4d946edb9598772c75d9701
China Pathfinder: Q1 2023 Update (Rhodium Group, Atlantic Council):
https://rhg.com/research/china-pathfinder-q1-2023-update/Politburo meeting on 28th April:
https://english.www.gov.cn/news/202304/28/content_WS644b7517c6d03ffcca6ecba3.html
April foreign trade data:
http://www.customs.gov.cn/customs/xwfb34/302425/5013316/index.html
European Chamber meetings with Chinese government interlocutors:
https://www.europeanchamber.com.cn/en/lobby-actions/6333/Meeting_with_Shanghai_Vice_Mayor_Hua_Yuan
https://www.europeanchamber.com.cn/en/lobby-actions/6332
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: Official and private survey data both showed that after a rebound in the first quarter, China’s manufacturing activity shrank again in April.
MARIANN: The official purchasing managers’ index, or PMI, that focusses more on larger, state-owned companies, signalled a contraction in manufacturing activity for the first time this year. China’s National Bureau of Statistics pointed at insufficient demand in April and a relatively strong recovery in the first quarter as the reasons behind the month-on-month drop in activity. The Caixin General Manufacturing PMI showed a similar picture, identifying weak domestic demand as the main factor weighing on the sector’s performance. Despite some worrying signs about the sustainability of China’s economic recovery, surveyed manufacturers were highly optimistic that demand would pick up and propel growth in the year ahead.
(MUSIC)
RUI: According to the latest update to the Rhodium Group’s and the Atlantic Council’s joint initiative, China Pathfinder, in the first quarter of 2023, China’s economic system showed signs that it is moving away from market economy norms.
MARIANN: The report pointed out that while China made pledges to promote foreign investment, there was no meaningful shift in policy to ease concerns about the direction of China’s economy. First quarter economic indices have shown a positive momentum in areas such as service sector activity and consumption, but the damage inflicted by almost three years of strict pandemic controls on income growth, employment and business confidence is expected to last. The report also noted that recent cases in which investigations have been instigated on foreign consultancies, due diligence providers and others is further eroding business confidence. At the same time, long-term structural problems are predicted to continue weighing on growth, with geopolitical tensions further dampening the outlook.
(MUSIC)
RUI: On 28th April, the Politburo, China’s top decision-making body, held its monthly meeting, with discussions focussing on the economy.
MARIANN: The meeting sent mixed signals: while the importance of attracting foreign investment was emphasised, policymakers also called for efforts to consolidate the foundation of self-reliance and strength in science and technology. It was also acknowledged at the meeting that China’s economic recovery is facing various headwinds, and the management of local government debt was mentioned among the areas where strengthened efforts are needed.
(MUSIC)
RUI: According to data released by the General Administration of Customs on 9th May, China’s foreign trade continued its lopsided recovery in April, with the value of exports expanding, while the value of imports dropped sharply.
MARIANN: In dollar terms, the value of exports grew at the second fastest pace year-on-year since last July, expanding for the second month in a row. Meanwhile, the value of imports continued its decline, which was uninterrupted for the past half a year. The rate of contraction was the second fastest this year, exceeding analysts’ expectations. The dataset also revealed, that in the first four months of 2023, China’s exports to and imports from the European Union, its second largest trade partner, both expanded in yuan-denominated terms. The value of China’s exports to the EU was almost twice that of its imports from the bloc during this period, according to China’s customs authorities.
(MUSIC)
RUI: As part of its efforts to maintain fruitful engagement with key interlocutors, the European Chamber held several meetings across China in recent weeks.
MARIANN: In late April, Chamber President Joerg Wuttke and other Chamber representatives met Shanghai vice mayor Hua Yuan, and discussed recent developments in EU-China trade and investment, among other areas of common interest.
RUI: In Shenyang, a Chamber delegation led by President Wuttke met Provincial Party Secretary Hao Peng and Liaoning Governor Li Lecheng. The two parties exchanged views on broader topics such as EU-China economic and trade relations, as well as on topics related to the business environment in Liaoning and Shenyang.
(MUSIC)
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.
This episode covers the Shanghai International Automotive Industry Exhibition, with comments from Mr Zhang Hongzhuo, chair of the Automotive Working Group; China’s foreign direct investment in the first quarter of 2023; a high-level meeting between the European Union and China; and measures aimed at stabilising foreign trade. From the Chamber side, a new report and a new issue of EURObiz magazine on research and development in China are introduced.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
20th Shanghai International Automobile Industry Exhibition
https://autoshanghai.auto-fairs.com/en/
Ministry of Commerce press conference – Q1 FDI (in Chinese)
http://www.mofcom.gov.cn/xwfbh/20230420.shtml
EVP Dombrovskis meeting Minister Wang Wentao
https://policy.trade.ec.europa.eu/news/read-out-bilateral-meeting-between-executive-vice-president-valdis-dombrovskis-and-minister-wang-2023-04-24_en
Measures to stabilise foreign trade
https://english.www.gov.cn/news/202304/24/content_WS6445dc13c6d03ffcca6ec939.html
EURObiz
https://www.eurobiz.com.cn/
EURObiz magazine in PDF format download
https://www.europeanchamber.com.cn/en/publications-archive/1078
European Chamber/MERICS joint report – China’s Innovation Ecosystem: The localisation dilemma
https://www.europeanchamber.com.cn/en/publications-innovation-report
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: The 20th Shanghai International Automobile Industry Exhibition officially opened after a two-year gap due to the coronavirus pandemic.
MARIANN: Featuring over 1,000 exhibitors and more than 100 new cars, the Shanghai motor show is showcasing the cutting edge of car manufacturing from leading domestic and international brands. For European firms operating in the sector, China is offering a highly competitive market, with consumer demands increasingly focussing on digital and new energy solutions.
RUI: Commenting on the motor show’s comeback is Mr Zhang Hongzhuo, chair of the Automotive working group.
ZHANG HONGZHUO: 2023 Shanghai international auto show takes place from April 18th. The latest model and concept cars are displayed in this ten- day gala. Apparently, Chinese automakers are speeding up their electrification from the strategy to products. This is encouraged by new energy vehicle sales booming last year and a great expectation for the following years. In their views, the market trend is irreversible, the imperative is to scramble for a great share of the market as soon as possible, even if profits are not immediately seen. With a stark contrast, European automobile makers are more careful to introduce their full spectrum of electric cars because their battery electric vehicles entered China market before are not as successful as internal combustion engines. Conventional vehicles could still be a cash cow for them today, even in the short-term. How to attract Chinese customers to their battery electric vehicles seems to be a hard nut to crack. The race of battery electric vehicles and internal combustion engine is becoming more intense than ever before to the segment where European cars are dominant. Whether or not they are able to hold their ground remains to be seen.
(MUSIC)
RUI: According to official data released by China’s Ministry of Commerce on 20th April, the country’s actual use of foreign direct investment or FDI grew at the slowest pace in more than two years in the first quarter of 2023.
MARIANN: FDI inflows expanded 4.9 per cent compared to the same period last year, which was the lowest rate of growth recorded since February 2021. At the same time, the ministry highlighted that the number of newly established foreign-invested enterprises increased by more than 25 per cent year-on-year in the first three months of 2023, as over ten thousand new foreign-invested firms set up operations in China. Furthermore, in the first quarter, almost 40 per cent of FDI into China was directed towards high-tech supply chains.
(MUSIC)
RUI: While leaders of the European Union are preparing to discuss the bloc’s ties with China during their next summit coming up in June, another high-level meeting took place in Brussels between the two sides.
MARIANN: On 24th April, the European Commission’s executive vice president and commissioner for trade Valdis Dombrovskis met Chinese Minister of Commerce Wang Wentao. According to the European Commission’s readout of the meeting, EVP Dombrovskis said it was necessary to rebalance the EU-China trade and investment relationship, and raised concerns about the lack of a level playing field for European companies in China. He highlighted that market access barriers are impacting the agriculture and food, medical devices and cosmetics industries, among others. The two sides also discussed the next High-Level Dialogue for Economy and Trade, after Commission President Ursula von der Leyen and Chinese President Xi Jinping had agreed to hold it when they met in early April. The Chinese side have announced that Vice Premier He Lifeng will co-chair the meeting.
(MUSIC)
RUI: On 23rd April, China’s vice minister of commerce Wang Shouwen announced measures aimed at stabilising foreign trade.
MARIANN: The minister said that China would take action to create more trade opportunities. He mentioned resuming offline trade fairs and facilitating the resumption of more international passenger flights and improving the efficiency of customs clearance among the planned steps. Wang added that foreign trade financing services available to medium, small and micro enterprises would also be improved, and that the authorities would guide companies to benefit more from cross-border e-commerce retail export-related tax policies.
(MUSIC)
RUI: The European Chamber recently launched a new joint report with the Mercator Institute for China Studies, highlighting the complexity of engaging in research and development in China. The report, China’s Innovation Ecosystem: The Localisation dilemma,found that while there are many benefits to conducting R&D in China, such as the speed of commercialising new projects or the size of the market, long-lasting challenges deter many European companies from engaging in cutting-edge innovation activities within China’s borders.
MARIANN: The March/April issue of the Chamber’s bimonthly magazine EURObiz delves into the topic of research and development through articles on the speed of commercialising R&D results in China, the intellectual property rights issues that companies need to consider before starting innovation projects, or the tax incentives that China offers for promoting innovation.
RUI: You can find these articles and many more by following the link provided in the show notes or by downloading the EURObiz in pdf format.
(MUSIC)
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers China’s first quarter Gross Domestic Product (GDP) growth, macroeconomics indexes and foreign trade data in March. From the Chamber side, join the Nanjing Position Paper 2023/2024 launch on 27th April to learn more about the Chamber’s recommendations on improving Jiangsu’s business environment.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China’s Q1 GDP and March macroeconomic data (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202304/t20230418_1938706.html
March foreign trade data
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/index.html
Nanjing Position Paper 2023/2024 Launch
https://www.europeanchamber.com.cn/en/upcoming-events/23502
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: China’s GDP expanded 4.5 per cent in the first quarter of 2023 as the country has been pushing for a speedy recovery after the impact of pandemic control measures left the economy in shambles in 2022.
MARIANN: First quarter GDP growth exceeded market expectations and showed a strong momentum from the previous quarter, when China’s GDP expanded only 2.9 per cent. In March, the Chinese Government set the country’s GDP growth target at around 5 per cent for 2023. While the GDP growth target set seems achievable, the European Chamber believes that the focus should be on promoting high-quality, sustainable growth, rather than growth at all costs. To this end, policy focus should be given to high-technology industries, and especially to promoting technological innovation. China also has a host of domestic challenges to address, including a fading demographic dividend and spiralling debt.
(MUSIC)
RUI: The National Bureau of Statistics also released a host of macroeconomic indexes, showing that consumption propelled growth in March.
MARIANN: Retail sales expanded at the fastest pace in almost two years, jumping 10.6 per cent in March from a year ago. One of the largest surges were seen in catering sales, which was up more than 26 per cent year-on-year. The real estate sector showed mixed signs in March, with home sales by areas still in decline, but sales by value up in March, suggesting a recovery in prices. At the same time, the warming seen in consumption did not translate into a strong recovery in investment sentiment in the private sector, with fixed asset investment by privately-owned enterprises still subdued and lagging far behind the rate of growth in state sector investment. While in March, surveyed urban unemployment decreased overall, youth unemployment surged to 19.6 per cent.
(MUSIC)
RUI: China’s official March foreign trade data showed a strong rebound in exports, and a softening of the decrease in imports.
MARIANN: The total value of exports jumped 14.8 per cent in March from a year ago in dollar terms, ending a period of contraction that lasted five months. Imports, however, continued to decrease in March, although at the lowest rate since last October. The European Union was again China’s second largest trade partner in March, as well as in the first quarter of 2023. However, a trade imbalance continues to exist between the two. China’s exports to the EU totaled 126 billion dollars during the first three months of 2023, while imports to China from the EU reached 68 billion dollars.
(MUSIC)
RUI: On 27th April, the European Chamber is launching the Nanjing Position Paper 2023/2024, its third local paper aimed at improving market conditions for all businesses operating in the region.
MARIANN: Following China’s zero-COVID policy ending, Jiangsu is at a crossroads. The province is well placed to rebuild its viability as an international investment destination, but it must act if it is to do so.
RUI: Join our event to learn more about the European Chamber’s recommendations on how to improve Jiangsu’s business environment by making it more appealing to foreign nationals, optimising green energy adoption and developing an efficient environmental, health and safety inspection system.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers European Commission President Ursula Von der Leyen’s visit to Beijing, China’s manufacturing and services activity in March, and policies and measures to stabilising China’s exports growth and employment.
From the Chamber side, the second report on China’s innovation system will launch on 21st April, focusing on the localisation dilemma that European companies face.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Chamber meeting with European Commission President Von der Leyen
https://www.europeanchamber.com.cn/en/national-news/3510
Official March PMI (in Chinese)
http://www.stats.gov.cn/sj/zxfb/202303/t20230331_1938271.html
Support for foreign trade, youth employment
https://english.www.gov.cn/news/202304/08/content_WS64309e91c6d03ffcca6ec1fc.html
European Chamber report launch – China’s Innovation Ecosystem: the localisation dilemma
https://www.europeanchamber.com.cn/en/upcoming-events/23792
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: A series of high-level meetings took place recently between European and Chinese officials, with the Spanish Prime Minister, the French President and the European Commission chief travelling to China in a short timeframe.
MARIANN: At the start of European Commission President Ursula Von der Leyen’s visit to Beijing, a European Chamber delegation led by President Joerg Wuttke briefed her on the business environment in China. The Chamber’s delegation highlighted the significant potential that still exists in the Chinese market, while also pointing out the many long-standing challenges that European companies continue to face, including barriers that prevent companies from contributing to China’s green transition, the lack of access to procurement bids and de facto hurdles in the financial services sector.
President von der Leyen stressed that the EU is not looking to decouple from China, but rather to de-risk and rebalance the relationship. She added that the EU remains open to work together with Chinese stakeholders to address global challenges and other areas of common interest.
The European Commission chief’s visit to Beijing will be followed by EU High Representative for Foreign Affairs and Security Policy Josep Borrell, who will travel to China next week.
(MUSIC)
RUI: China’s manufacturing and services activity both continued to expand for the third consecutive month in March, with the country’s economy riding on a recovery momentum following the abandonment of its zero-COVID policy.
MARIANN: The official purchasing managers’ index, or PMI, indicated that manufacturing activity grew at a slightly slower rate than in the previous month. However, out of the 21 surveyed sectors, growth expanded further from February in 13. While both supply and demand continued increasing, the employment subindex dipped under the 50-point mark separating growth from contraction, with manufacturing companies decreasing staffing levels in March. At the same time, the rebound in activity continued to strengthen in both the construction and services sectors, with the retail and transportation sectors recording significant expansion in March, indicating warming consumption.
(MUSIC)
RUI: At an executive meeting of the State Council held on 7th April, China’s new premier Li Qiang called for policies and measures to promote the stable growth of China’s exports, highlighting the important role foreign trade plays in stabilising economic growth and employment.
MARIANN: The premier vowed to address practical problems in different fields and help exporters secure more overseas orders using a combination of adjusted policies. Further efforts will be devoted to stabilise Chinese exports to developed economies and to tap more into the opportunities offered by developing and regional markets, including the Association of Southeast Asian Nations, which is already China’s largest trading partner.
Among other topics discussed at the meeting, the issue of youth unemployment was also raised, with China’s State Council pledging to offer more policy and financial support for firms providing job opportunities for large numbers of college graduates.
(MUSIC)
RUI: China’s abandonment of its zero-COVID policy has seen a gradual resumption of people-to-people exchanges between Europe and China, which is a very positive development for business. However, this is taking place against the backdrop of the steady escalation of the US-China struggle for technological supremacy, all while geopolitical factors, such as the war in Ukraine, are making the situation even more complex.
MARIANN: In light of this complex situation, European companies that engage in research and development in China, are deploying a wide spectrum of strategies to mitigate risks and maximise their competitiveness. Some firms have opted to increasingly integrate their China R&D with global efforts, while a host of risks are deterring others from engaging in innovation in China at all.
RUI: Join us on 21st April for the launch of the European Chamber’s second report, compiled in partnership with the Mercator Institute for China Studies, and find out more about the localisation dilemma that European companies face in China’s innovation ecosystem.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers new measures for further optimising the management of cosmetics raw material safety information, with comments from Jacky Zhang, chair of the Cosmetics Working Group; reported profits of large industrial companies in China in January and February; and Shanghai’s Hongqiao Airport resumption of international flight services. Join our event on China’s economic recovery beyond the Two Sessions in Beijing on 31st March.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
NMPA notice on the management of safety information of raw materials used in cosmetics (in Chinese)
https://www.nmpa.gov.cn/xxgk/ggtg/qtggtg/20230327145218196.html
China industrial profits January-February official data (in Chinese):
http://www.stats.gov.cn/sj/sjjd/202303/t20230327_1937984.html
Shanghai Hongqiao airport resuming international flights
https://www.shine.cn/news/metro/2303261228/
Event: How will China’s Economic Recovery Play Out Beyond the Two Sessions?
https://www.europeanchamber.com.cn/en/upcoming-events/23684
European Chamber membership
https://www.europeanchamber.com.cn/en/become-a-member
Transcript:
RUI: Hello and welcome to China Shortcuts,
ROBBIE: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 27th March, China’s National Medical Products Administration announced new measures for further optimising the management of cosmetics raw material safety information (RMSI). This is seen as a welcome step by the industry, since the new measures are aimed at solving hurdles regarding the submission of raw materials’ safety information.
ROBBIE: The European Chamber’s Cosmetics working group has been advocating for the optimisation of the safety information submission management, as challenges and inconsistencies related to obtaining the required data from suppliers posed potential compliance risks related to product registration and notification. The working group conducted two separate surveys about the challenges its member companies faced due to this issue and provided data to the relevant authorities to help highlight the areas where improvement was needed.
RUI: When asked about the newly released notice, Jacky Zhang, chair of the European Chamber’s Cosmetics Working Group pointed out that member companies share the NMPA’s objective of protecting consumer safety, and expressed appreciation for the authority’s willingness to listen to industry feedback. He pointed out that, among other improvements, the grace period for the registration of raw material safety informationhas been extended, and companies can now provide required data themselves instead of having to rely on their suppliers to provide it, as was previously the case.
ROBBIE: The chair said that the working group is looking forward to continuing to work with the authorities to help build a fair, transparent and modernised regulatory environment for the cosmetics industry in China.
(MUSIC)
RUI: Profits of large industrial companies in China fell sharply in the first two months of 2023, as demand was still subdued while costs remained relatively high.
ROBBIE: According to the National Bureau of Statistics, industrial profits dropped nearly 23 per cent year-on-year, which was the largest decline recorded in almost three years. The bureau pointed at the uneven recovery of supply and demand when explaining the data, adding that revenues were shrinking at a faster rate than costs in the first two months of the year. Profit losses were especially high in the raw materials and packaging sectors. At the same time, manufacturers of new energy batteries and equipment saw steep increases in profits, while the consumer goods industry also showed signs of recovery, with gains falling at a slower pace than at the end of last year.
(MUSIC)
RUI: Shanghai’s Hongqiao airport resumed international flight services on 26th March, after a three-year suspension due to COVID-19 travel restrictions.
ROBBIE: International flights started operating again from Shanghai’s second largest airport, further facilitating travel between China and the rest of the world. The airport is expected to operate more than 300 flights on routes connecting China’s mainland to international destinations and its special administrative regions. In the upcoming flight season, Shanghai’s two airports are planning to handle over 2,200 flights daily, which would amount to about 80 per cent of the flight volume during the same period in 2019.
(MUSIC)
RUI: Following a year in which business activity in China experienced numerous ups-and-downs, together with low GDP growth, questions persist over the country’s ability to get its economy back on track in 2023.
ROBBIE: Although the world’s second largest economy is finally emerging from the pandemic and setting a course for the future, numerous overlapping crises are making for an uncertain global outlook. China can be a positive force in the world economy, but it will need to overcome significant headwinds, such as subdued overseas demand and ongoing geopolitical tensions.
RUI: Join us in Beijing on 31st March for a special event, co-organised by the China Europe International Business School and the European Chamber, to understand more about the road ahead. Please note that this event is only open to members of the Chamber, so if you are not a member yet, learn how you can become one by following the link provided in the show notes.
ROBBIE: Thanks for listening. Tune in again on 12th April.
RUI: In the meantime, find useful links in the episode notes.
This episode covers China lowering its required reserve ratio; a report on China-US trade decoupling; and foreign direct investment in China in January and February.
Join the Chamber’s Human Capital Conference on 27th March in Beijing, to learn more about integrating environmental, social and corporate governance into your company’s human resources strategy.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
PBOC reserve requirement ratio (in Chinese)
http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4821841/index.html
Overview of RRR cuts since 2018 (in Chinese)
http://www.pbc.gov.cn/rmyh/4027845/index.html
PIIE report on US-China trade decoupling
https://www.piie.com/blogs/realtime-economics/five-years-trade-war-china-continues-its-slow-decoupling-us-exports
Official January-February FDI data (in Chinese)
2023年1-2月全国吸收外资2684.4亿元人民币，同比增长6.1% (mofcom.gov.cn)
Chamber event: Human Capital Conference¾ESG In Human Capital Strategy Development
https://www.europeanchamber.com.cn/en/upcoming-events/23635
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC)
RUI: On 17th March, China’s central bank announced that it would lower the amount that banks are required to keep in reserve for deposits in order to maintain sufficient liquidity in the interbank system.
MARIANN: The decision to cut the reserve requirement ratio for banks by 25 basis points will take effect on 27th March, and is expected to inject about 500 billion yuan worth of liquidity into the market. This in turn will provide lenders with more cash to pay out loans, and open up the possibility for reducing lending rates. According to data from the central bank, since 2018, the reserve requirement ratio has been lowered 14 times already, with the average ratio decreasing from 14.9 per cent to 7.8 per cent by the end of last year.
(MUSIC)
RUI: According to a new report published on 16th March by the Peterson Institute for International Economics, China has continued to decouple from US exports amid tense bilateral relations.
MARIANN: The Washington-based research organisation highlighted that as both sides fear that the other would suddenly weaponise trade flows in the name of security, to mitigate risks, they are attempting to diversify. The report points at 2022 data showing that US exports are falling farther and farther behind foreign peers also selling into the Chinese market. This trend is seen in all key areas: US manufacturing exports have for the most part disappeared, semiconductor sales dwindled and may not return due to new US export control policy, while services exports that were tarnished by the pandemic have not made a comeback. The report stressed that worrying signs have emerged even in the field of agriculture, where US sales to China hit record highs in 2022. According to the Peterson Institute, the uptick in US farm sales to China was largely due to higher prices and concerns over global food security in light of the war in Ukraine. As for the other side, the report says that US imports from China tell a similar story, and concludes that the two economies are becoming less directly interdependent through trade.
(MUSIC)
RUI: According to a note published by the Ministry of Commerce on 17th March, actual use of foreign direct investment increased 6.1 per cent in yuan terms in the first two months of 2023, compared to the same period a year ago.
MARIANN: The ministry highlighted that FDI in high-tech manufacturing picked up sharply, expanding almost 69 per cent year-on-year, while the service industry also saw a substantial increase in FDI inflow. The overall data, however, shows some slowing from January, when actual use of FDI grew 14.5 per cent year-on-year. Furthermore, the ministry’s note points out that investment from Belt and Road countries and the Association of Southeast Asian Nations increased more than 10 per cent in January-February. However, without a clear breakdown of the data, it is difficult to gauge foreign investors’ sentiment, especially since the official FDI data also includes investments from Hong Kong or tax havens like the Cayman Islands, even if the money comes from subsidiaries of Chinese companies – a phenomenon known as round-tripping investment.
(MUSIC)
RUI: Environmental, social and corporate governance or ESG is fast becoming the global standard for investors seeking responsible investment opportunities. This framework requires companies to provide data on several aspects of their operations, such as carbon emissions, employee health and safety, diversity and business ethics. More and more companies are embedding ESG in their corporate strategy to pursue sustainable development. At the same time, younger generations entering the workforce are highly motivated by an employer’s ability to demonstrate the purpose and value of its social impact.
MARIANN: It is therefore important for companies to understand how to integrate ESG into their corporate human resources strategy, and how to develop talent with ESG skills.
RUI: Join this year’s Human Capital Conference on 27th March to hear CEOs and HR leaders from top-tier companies discuss the latest trends and best practices in ESG.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers China’s top leadership new line-up; the resumption of all types of Chinese visas issuance; production and retail sales data in January and February; as well as producer and consumer prices and urban unemployment rate in February. From the Chamber side, join our events on the implications of the Two Sessions on 22nd March in Shanghai and 31st March in Beijing.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Announcement on the resumption of issuing visas (in Chinese):
https://mp.weixin.qq.com/s/Xn9l4JB2221NaSEog0blCg
January-February official macroeconomic data (in Chinese)
http://www.stats.gov.cn/tjsj/zxfb/202303/t20230315_1937161.html
Official February CPI/PPI (in Chinese)
http://www.stats.gov.cn/tjsj/sjjd/202303/t20230309_1936941.html
European Chamber events on Two Sessions outcomes
Shanghai:
https://www.europeanchamber.com.cn/en/upcoming-events/23400
Beijing:
https://www.europeanchamber.com.cn/en/upcoming-events/23684
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
(MUSIC}
RUI:The annual meetings of China’s top legislative and advisory bodies, referred to as the ‘Two Sessions’, concluded on 13th March, with the new line-up of China’s top leadership being announced.
MARIANN: As expected, Li Qiang, the former Communist Party chief of Shanghai, succeeded Li Keqiang in the role of China’s premier. He has promised renewed support for private businesses and pledged greater opening up of China’s economy. Several leading officials, including the ministers for finance, commerce, industry and technology, as well as the governor of the central bank, retained their positions. Such continuity is especially important at a time when the country is faced by a host of domestic headwinds, and with geopolitical tensions running high. Many signals have been given as to what can be expected in the next five years, but European businesses are focussed on tangible actions taken by the new Chinese cabinet.
(MUSIC}
RUI: On 15th March, China resumed the issuance of all types of visas to foreigners, ending the almost three-year long suspension of people-to-people exchanges.
MARIANN: The decision was announced just a day ahead of it taking effect by the Chinese Foreign Ministry’s Department of Consular Affairs. Visa-free entry for certain groups has also resumed, including for foreigners travelling in groups from Hong Kong and Macao to neighbouring Guangdong Province.
(MUSIC}
RUI: In January-February, China’s large industrial firms logged a 2.4 per cent increase in their production compared to the same period last year, and retail sales also showed sharp improvement.
MARIANN: According to the breakdown based on ownership, foreign companies’ productivity was still in decline in the first two months of this year. Out of the 41 surveyed sectors, production increased in 22, with manufacturers of transportation equipment registering significant improvement. Meanwhile, retail sales grew for the first time since last September, and at the fastest pace since August. Increased demand was especially noticeable in the catering industry, where sales rose 9.4 per cent in the first two months of 2023 after a 14.1 per cent drop in December.
(MUSIC}
RUI: China’s producer prices dipped further, while consumer prices increased at a slower pace year-on-year in February, according to fresh data released on 9th March by the National Bureau of Statistics.
MARIANN: The producer price index showed the sharpest decline recorded since November 2020, although the statistics bureau pointed to the high base from last year as the main factor behind the 1.4 per cent drop. On a monthly basis, factory prices remained unchanged from January. The slower growth of consumer prices was largely due to the impact of the Chinese New Year holiday’s changing date: while last year it fell in February, this year its stimulating effect on consumption pulled prices up in January. The surveyed urban unemployment rate stood at 5.6 per cent in January-February, with 18.1 per cent of young people between the ages of 16 and 24 out of a job in China’s big cities.
(MUSIC}
RUI: At this year’s Two Sessions, delegates and party members discussed key political issues and made central decisions that will set the agenda for the year ahead.
MARIANN: Some of the key outcomes of the meetings included setting the economic targets for 2023 as well as the decision to advance the reform of State Council institutions, including restructuring financial industry regulators.
RUI: For in-depth analysis and insights into the implications of the Two Sessions on businesses, the economy and the future of China, join our events on 22nd March in Shanghai and on 31st March in Beijing.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers China’s 2023 Lianghui (‘Two Sessions’), with comments from Jens Eskelund, vice president of the European Chamber; manufacturing and services activity in February; and imports and exports in January and February. From the Chamber side, the Tianjin Position Paper will launch and be available to download on 10th March.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Full text of the 2023 Government Work Report:
Full text of Chinese government work report
China’s Official February PMI data (in Chinese):
http://www.stats.gov.cn/tjsj/sjjd/202303/t20230301_1919035.html
Official foreign trade data January-February (in Chinese):
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/9f806879-1.html
European Chamber Tianjin Position Paper launch:
https://www.europeanchamber.com.cn/en/upcoming-events/23194
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI:China’s 2023 Lianghui, the annual sessions of the country’s national legislature and top political advisory body, opened on 4th March. During the Two Sessions, major policy priorities are outlined, legislation is ratified and key personnel changes within the government are confirmed.
MARIANN: China’s outgoing premier, Li Keqiang delivered the government’s annual work report on 5th March, reviewing the progress made on the government’s development plans from last year and setting out the key priorities for the coming year. The GDP target for 2023 was set at around 5 per cent, and his presentation emphasised economic recovery and stability for the year ahead. Premier Li reiterated China’s drive for self-reliance in some strategic areas, including science and technology, and pledged that the country would continue its transition to sustainable green development.
RUI: Commenting on the business community’s reception of the newly announced economic targets is Jens Eskelund, vice president of the European Chamber.
Jens Eskelund: The economic targets announced for 2023 confirm to us what we have been able to see on the streets of China over the past few months. We have put COVID behind us, economic activity is picking up and we are confident that for many of us 2023 would be a good year. It’s important now when we have a little bit of tailwind that this opportunity is being used in the right way to make changes that will allow us all to go sustainable in the future. There’s still work to do in terms of opening markets, levelling playing fields, growing domestic consumption and promoting high-quality and sustainable growth. We hope that that also would be a big part of the deliberations at the NPC.
(MUSIC)
RUI: China’s manufacturing and services activity both continued to recover in February, with the pace of expansion exceeding expectations as business operations were getting back on track after a decrease in the number of COVID-infections across the country.
MARIANN: According to the National Bureau of Statistics, factory activity increased at the fastest pace recorded in almost eleven years, with 18 out of the 21 surveyed sectors registering expansion. While the largest expansion was seen among large enterprises, small and medium-sized companies registered the steepest rebounds last month, with their activity recovering to expansion territory after several months of decline. Services activity also continued to strengthen in February, with the rate of expansion the fastest recorded since March 2021.
(MUSIC)
RUI: China’s exports continued to drop in the first two months of 2023 amid weak global demand, and imports also fell sharply from the same period last year, according to data released by the Chinese customs authorities on 7th March.
MARIANN: In the January-February period, the value of exports shrank 6.8 per cent year-on-year in dollar terms, with the rate of decline easing from the previous two months. At the same time, the value of imports fell more than 10 per cent, which exceeded the rate of decline recorded in December. Data from the first two months of the year are usually combined to avoid any distortions caused by the Chinese New Year holiday, which always falls in this period. The official data also revealed that China’s trade with the European Union dropped 10 per cent in January-February, with exports from China to the EU shrinking more than twice as much as imports from the EU.
(MUSIC)
RUI: Tianjin is one of four cities in China with provincial status reporting directly to the central government. In the earlier years of 2000 it posted an annual GDP well above the national average. However, by 2021, the city fell out of the list of the top ten cities in terms of their contribution to GDP, a sign that it is falling short of its potential.
MARIANN: The European Chamber is launching the second edition of its Tianjin Position Paper on 10th March, which puts forward 20 constructive recommendations outlining how Tianjin can get its economic development back on track and further boost business confidence.
RUI: Join our event in Tianjin and download the Tianjin Position Paper from the Chamber’s website to find out more about how European companies operating in Tianjin see the situation on the ground, and what tangible steps they recommend the local government takes for the city to realise its potential.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers the recently issued guidelines for establishing national standards in 2023, with comments from Chen Bolei, national chair of the Chamber’s Standards and Conformity Assessment Working Group; high-level visits from the European Union (EU) and several EU Member States to China in 2023; easing of inbound travel requirements; and consumption and urban employment drops in 2022. Join the event on 9th March on legislative developments in China’s export control regime and companies’ compliance management.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Note:
The segment on new guidelines for national standards setting was brought to you by Ester Cañada Amela, senior business manager at the European Chamber.
Read more:
Guidelines for establishing national standards in 2023 (in Chinese)
http://www.gov.cn/zhengce/zhengceku/2023-02/21/content_5742536.htm
Global Times interview with Ambassador Fu Cong:
https://www.globaltimes.cn/page/202302/1286161.shtml
Notice on updated travel regulations:
https://www.chinaqw.com/qwxs/2023/02-28/352801.shtml
2022 national and economic development datRUI:
http://www.stats.gov.cn/tjsj/zxfb/202302/t20230227_1918980.html
Chamber hybrid event: Recent Legislative Developments in China’s Export Control Regime and Enterprise Cross-border Compliance Management
https://www.europeanchamber.com.cn/en/upcoming-events/23563/_Hybrid_Recent_Legislative_Developments_in_China_s_Export_Control_Regime_and_Enterprise_Cross_border_Compliance_Management_Bilingual_
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI:China’s Standardisation Administration recently issued guidelines for establishing national standards in 2023, calling for further opening up of the national standards system.
MARIANN: The document outlined that China should actively move towards adopting international standards and improve the compatibility of national and international standards. It advised that when submitting standardisation proposals at the national level, submissions should be done at the international level too, in order to advance the use of Chinese technology worldwide. The guidelines also included requirements aimed at accelerating the transformation of scientific and technological innovation achievements into standards. The document highlights the role of standards in China’s attempts to achieve scientific and technological self-reliance and urged for the advancement of standardisation for the creation, use, protection and management of intellectual property.
RUI: When asked about the guidelines, Chen Bolei, national chair of the Chamber’s Standards and Conformity Assessment Working Group expressed hope that they will help improve the consistency between Chinese and international standards, as they require a systematic analysis of international standards as a pre-condition for standardisation projects. He highlighted that the Chamber’s Standards and Conformity Working Group has been advocating for further harmonisation between international and domestic standards for several years.
(MUSIC)
RUI: In a recent, exclusive interview with Global Times, Fu Cong, head of the Chinese mission to the EU said that the EU and China are expected to resume frequent high-level mutual visits in the near future.
MARIANN: The ambassador said that preparations are already underway for European Commission President Ursula von der Leyen and European Council President Charles Michel’s visit to China to take place in the first half of 2023. A number of high-level visits from EU members states are also expected to take place in the year ahead. French President Emmanuel Macron said he would visit China in early April, while Italian Prime Minister Giorgia Meloni accepted an invitation for a visit from Chinese President Xi Jinping when they met at the G20 summit last November.
RUI: Resuming face-to-face exchanges at all levels is an important step towards rebuilding trust that was eroded during China’s almost three-year-long isolation. While China is yet to restart issuing tourist visas and further optimising inbound business travel for foreign nationals, recent announcements by some of China’s diplomatic missions overseas provide some scope for optimism.
MARIANN: According to notices released by the Chinese Embassies in a handful of countries, including Hungary and New Zealand, starting from 1st March, passengers travelling to China will no longer be required to present a PCR test result, but instead can use antigen tests to report their health status to China’s customs authorities. The notice also highlighted that airlines will no longer check passengers’ test results for boarding. However, inbound travellers will still be tested upon arrival in China and, if infected, will be subjected to home quarantine or medical treatment depending on their condition.
(MUSIC)
RUI: On 28th February, the National Bureau of Statistics released a report about national and economic development in 2022. The data showed unusual drops in consumption and urban employment.
MARIANN: As strict COVID-control measures brought grave challenges to business operations for the most part of 2022, China’s cities shed more than 8 million jobs from the previous year. At the same time, the annual growth of per capita disposable income slowed significantly from 2021. As unpredictable pandemic controls created uncertainty about financial security in China’s households, per capita spending also shrank in 2022, with retail sales of consumer goods and catering revenue both declining compared to the previous year, according to the official dataset.
(MUSIC)
RUI: On 30th December 2022, the Ministry of Commerce, the Ministry of Science and Technology, and several other relevant authorities jointly announced a series of amendments to the Catalogue of China’s Prohibited and Restricted Technology Export.
MARIANN: These amendments proposed that certain raw materials or technologies—namely rare earths, integrated circuits, photovoltaic silicon wafers, electronic devices and laser radar—be included in the scope of export prohibition or restriction.
MARIANN: Join us on 9th March to find out what new regulations can be expected as a result, and what adjustments companies will need to make to ensure compliance.
RUI: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, find useful links in the episode notes.
This episode covers a survey on the performance of small and medium-sized enterprises (SMEs) in January, with comments from Liam Jia, team lead at the EU SME Centre; the phasing out of restrictions on travellers from China to European Union Member States; and foreign direct investment in January. Join the event on 28th February on the protection of women’s rights in the workplace.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
January SME Development Index
http://www.news.cn/fortune/2023-02/15/c_1129367740.htm
https://english.www.gov.cn/archive/statistics/202302/15/content_WS63ecce89c6d0a757729e6c7a.html
Swedish Presidency’s statement on the coordination of COVID-19 travel measures
https://swedish-presidency.consilium.europa.eu/en/news/presidency-statement-on-the-coordination-of-covid-19-travel-measures-1/
International flights’ resumption
https://english.news.cn/20230216/690795ec8ad5441e8223d17775d20c1a/c.html?utm_source=substack&utm_medium=email
Official January FDI data (in Chinese)
http://www.mofcom.gov.cn/article/xwfb/xwsjfzr/202302/20230203392101.shtml
European Chamber webinar: New PRC Law on the Protection of Rights and Interest of Women – Implications for Employers
https://www.europeanchamber.com.cn/en/upcoming-events/23458
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: According to a survey conducted with three thousand companies, there was a significant improvement in the performance of small and medium-sized enterprises in January.
MARIANN: The SME Development Index, released by the China Association of Small and Medium Enterprises on 15th February, indicated that SMEs’ performance recovered to the highest level since last February. This finding spells the end of a half-year-long decline. However, while the data showed a steep recovery from December, it still stayed well below the 100-point critical value of prosperity.
RUI: Commenting on the data is Liam Ziqi Jia, team lead at the EU SME Centre in Beijing.
Liam Jia:2023 is a year of great expectations for China. Having abandoned its zero-Covid policy and international isolation, there’s hope for an economic rebound that could stave off a global recession and optimism that better relations with the EU might bring greater stability to the international system. However, the economy is likely to recover, but a one-time consumer spending rebound will not solve the long-term structural difficulties China’s economy faces.
The SME Development Index indicated that SMEs’ performance recovered to the highest level recorded since last February. With SMEs in the transport and storage sector, accommodation and catering sector logging the biggest improvement. This finding also meant the end of a half-year long decline.
Difficulties in business operations and structural upgrading for SMEs remain the challenges for resilience, calling for further improvements on the business environment and incentives for SMEs across the country to further support SMEs to shore up growth.
With the two sessions around the corner, the annual meetings by the government to discuss key political and economic issues and take central level decisions, which is of particular interest to the international business community as it will set China’s political and economic precedent for the rest of the year. we have reasons to expect clearer signals for economic recovery and policy incentives for boosting growth for SMEs.
(MUSIC)
RUI: According to a statement released on 16th February by the Swedish Presidency of the Council of the European Union, member states have agreed to phase out COVID-related restrictions on travellers from China by mid-March.
MARIANN: EU countries will gradually remove the requirement for negative pre-departure COVID-tests by the end of February and the random testing of travellers from China will be phased out by the middle of March. These measures were put in place in January, as China’s sudden resumption of outbound travel amidst large-scale outbreaks across the country prompted fears about the appearance of a new variant.
RUI: China is yet to withdraw its testing requirements for overseas travellers. At the same time, some improvements can be seen in the optimisation of international travel.
MARIANN: According to the Civil Aviation Administration of China, by the second week of February, China resumed regular passenger flights with 58 countries. This accounts for 64 per cent of the countries that handled flights to and from China in the same period in 2019.
(MUSIC)
RUI: China saw a significant rise in actual use of foreign direct investment in January compared to the same period last year, with an increase of FDI into high-tech industries in particular.
MARIANN: According to official data released by the Ministry of Commerce on 20th February, the actual use of FDI grew 14.5 per cent overall in yuan-denominated terms. At the same time, foreign investment in high-tech industries expanded by more than 60 per cent year-on-year. It is important to note, however, that the official data qualifies investment according to the place where a business is registered. This means that investments to China from Hong Kong or tax havens, like the Cayman Islands, are counted as FDI, even if the money comes from subsidiaries of Chinese companies – a phenomenon known as round-tripping investment. This makes it difficult to assess how much FDI trends reflect actual foreign investor sentiment towards the Chinese market.
(MUSIC)
RUI: On 1st January 2023, the newly-revised Law on the Protection of Rights and Interests of Women came into force, improving the protection of women’s rights and interests in China in a wide range of areas. The revised law stipulates that the state should take necessary measures to promote gender equality and eliminate all forms of discrimination against women.
MARIANN: The new set of rules put an emphasis on women’s employment security as well, setting out the aim of creating an impartial employment and business environment.
RUI: Join our webinar on 28th February to learn more about the protection of women’s rights in the workplace and the new law’s implications for employers.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers social insurance compliance issues faced by some European companies, with comments from Jeanette Yu, chair of the Chamber’s Human Resources Working Group; the China Pathfinder 2022 report; producer and consumer prices in January; and the Guangzhou government’s economic support measures. Join the event on China’s Transition through COVID and its Economic Recovery on 20th January in Beijing or online.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Note:
The segment on Guangzhou’s latest economic support measures was brought to you by Lynn Wu, Business and Government Affairs Manager at the Chamber’s South China Chapter.
Read more:
Providing social insurance for employees outside of a company’s registered location
https://cms.law/zh/chn/publication/274
China Pathfinder 2022: H2 2022 Update (Atlantic Council and Rhodium Group)
https://chinapathfinder.org/china-pathfinder-h2-2022-update/
Official January consumer and producer price indices (in Chinese)
http://www.stats.gov.cn/tjsj/sjjd/202302/t20230210_1902642.html
Guangzhou economic support measures (in Chinese):
https://www.gz.gov.cn/zwgk/fggw/szfwj/content/post_8800523.html
Chamber hybrid event: China’s Transition through COVID and its Economic Recovery
https://www.europeanchamber.com.cn/en/upcoming-events/23494
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: Some European Chamber member companies recently reported that a growing number of regions in China started to strictly enforce the rule that companies can only provide social insurance for their employees at their registered location.
MARIANN: This rule, stipulated by the country’s social insurance law has been circumvented by companies who employed staff outside their registered location by paying social insurance for their staff through HR agencies. However, measures issued by the Ministry of Human Resources and Social Security in March 2022 effectively banned this practice, creating challenges for employers.
RUI: We reached out to Jeanette Yu, chair of the Chamber’s HR working group to find out what companies can do to make sure that their employees can access social benefits at their place of work.
JEANETTE YU: If a company wants to provide the social insurance for the employees at the place where the company is not registered, it can have two solutions. One is that the company sets up a registered business unit such as branch office at the place where the employee works so that the company can provide social insurance for the employee on site. The other is that the company does not hire the employee directly but through an HR agency or a service provider on the site of employee, and the employee works for the company by the way of secondment or providing outsourcing service. In such a case, the HR agency or the service provider hiring the employee on site can provide social insurance for the employee at the place.
(MUSIC)
RUI: A report jointly released by the Atlantic Council and the Rhodium Group, on 8th February, found that even though China’s government has been signalling that its focus is shifting from political to economic priorities, so far, evidence of a more meaningful commitment to structural reform is hard to find.
MARIANN: According to the China Pathfinder 2022, policy activity in the latter half of last year was dominated by measures to offset the economic slowdown and reassure foreign investors. Policymakers focused on financial system development, competition policy, trade, direct investment, and portfolio investment – five out of the six economic clusters that are included in the report’s framework. The one area where fewer developments were seen was innovation. The findings overall showed a mixed picture as to whether China’s economic system moved toward or away from market economy norms in the second half of 2022. The report concluded that in the year ahead China will be tested on its willingness to enact market reforms, as Beijing will have to rebuild confidence with foreign investors as well as domestic consumers and businesses.
(MUSIC)
RUI: Producers’ prices in China continued to drop in January for the fourth consecutive month, while consumer prices edged up at a slightly faster pace than in December, according to data released by the National Bureau of Statistics on 10th February.
MARIANN: The bureau explained that the cost of goods at the factory gate was affected by the fluctuation of oil prices on the global market as well as by the drop in domestic coal prices in January. Meanwhile, consumer prices rose at the fastest pace in three months as the dropping of COVID-restrictions and the Spring Festival holiday had a warming effect on consumption.
(MUSIC)
RUI: On 8th February, the Guangzhou government announced new economic support measures, with a special focus on the high quality development of market entities.
MARIANN: The local government intends to provide incentives for foreign investment, and support for foreign-invested projects that are new or aimed at increasing capital. The new measures also include sections on facilitating the entry and exit of key foreign business personnel and of top overseas talent. Companies operating in Guangzhou would also enjoy various tax benefits, and reduced costs for utilities, logistics and land use.
(MUSIC)
RUI: After having upheld stringent COVID control measures for almost three years, China abruptly abandoned its dynamic zero strategy in early December, and announced that it would focus its efforts on a strong economic recovery.
MARIANN: The unexpected break from strict pandemic controls led to a surge of infections nationwide. As the country is moving on with its reopening, some public health experts have estimated that a second wave of infections is likely to take place in the coming months.
RUI: Join us on 20th February to hear a panel of economists and health experts share their views on what to expect from China’s recovery and future waves of infections.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers the easing of travel to the mainland from Hong Kong and Macao; the share of China’s private sector in the country’s top 100 largest listed firms; projected growth of China’s renewable power installations; and China’s five-year growth projection. From the Chamber side, the fifth edition of the Shanghai Position Paper will launch on 14th February.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Optimisation of travel measures regarding inbound passengers to the mainland from Hong Kong and Macao:
https://english.www.gov.cn/news/topnews/202302/03/content_WS63dca8b4c6d0a757729e6507.html
PIIE China’s state vs. private sector tracker:
https://www.piie.com/research/piie-charts/chinas-state-vs-private-company-tracker-which-sector-dominates
Fitch Ratings’ 2023 projection about China’s renewable power installations:
https://www.fitchratings.com/research/corporate-finance/chinas-renewable-power-installations-to-maintain-robust-growth-in-2023-02-02-2023
IMF 2022 Article IV consultation with the People’s Republic of ChinRUI:
https://www.imf.org/en/Publications/CR/Issues/2023/02/02/Peoples-Republic-of-China-2022-Article-IV-Consultation-Press-Release-Staff-Report-and-529067
Launch of the Shanghai Position Paper 2023/2024:
https://www.europeanchamber.com.cn/en/upcoming-events/23391
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: Starting from 6th February, Beijing dropped limitations on passenger flows from Hong Kong and Macao.
MARIANN: According to the new travel measures, passengers arriving to the mainland from the two cities no longer need to make reservations for crossing the border. Furthermore, Chinese authorities have also dropped PCR testing requirements for travellers from Hong Kong and Macao, as long as they don’t have an overseas travel history within seven days prior to their departure. Health code and temperature checks, however, will still be in place until further notice.
(MUSIC)
RUI: According to data published on 2nd February by the Peterson Institute for International Economics, the share of China’s top-100 largest listed firms that are private companies continued to drop in the second half of 2022.
MARIANN: The Washington-based think tank’s data showed that starting from the second half of 2021, the private sector’s share began declining from a peak of more than 55 per cent in mid-2021. Previous to this drop, its share had been continuously rising since the end of 2010, when the data tracking started. The rate of decline was the sharpest in the second half of 2021, and has been slowing in each consecutive half year since. At the end of 2022, the private sector’s share stood at 42.8 per cent of the country’s 100 largest listed firms ranked by market value. As the Peterson Institute highlighted, the private sector’s share still remains significantly higher than it was throughout the 2010s, when it rose from less than 8 per cent at the end of 2010 to 36 per cent by the end of 2019.
(MUSIC)
RUI: Fitch Ratings has projected that China’s renewable power installations will maintain robust growth in 2023.
MARIANN: In their commentary released on 2nd February, the international credit rating agency said the country’s installation of wind and solar power capacity expanded 22 per cent last year, following the combined impact of strong demand, lower raw material costs and a low base effect for wind power. Fitch Ratings pointed out that solar panel installations saw rapid growth in 2022, primarily as a result of high coal prices driving demand for solar power seen as a more attractive alternative both in terms of cost and availability. They expect to see this trend continue in 2023, with wind power installations also recovering after two years of decline, which the agency explained was due to the phasing out of subsidies.
(MUSIC)
RUI: The International Monetary Fund lowered its five-year growth projection for China, warning that the country faces challenges on its path to economic recovery.
MARIANN: According to the IMF’s latest review released on 3rd February, China’s annual growth will gradually slow over the next five years. The 2027 GDP growth projection was lowered from the 4.6 per cent estimated in October, to 3.8 per cent. The fund highlighted that in order to sustain its recovery, China needs to implement comprehensive macroeconomic policies and structural reforms to address major headwinds such as the contraction in real estate, a shrinking population and slowing productivity growth.
(MUSIC)
RUI: While Shanghai has for several years been attempting to develop a headquarters economy, nearly three years of closed borders—including the well-publicised citywide lockdown in the spring of 2022—has compromised its reputation as an internationally competitive city.
MARIANN: The upcoming, fifth edition of the European Chamber’s Shanghai Position Paper examines how the city can restore its standing as an attractive investment destination.
RUI: Join us in Shanghai on 14th February for the launch of the Shanghai Position Paper 2023/2024, to find out more about European businesses’ concerns, and their recommendations for the city’s economic recovery, which will require an improvement in operating conditions for all businesses operating in Shanghai.
MARIANN: Following its launch, the Shanghai Position Paper will also be available on the Chamber’s website, where you can download all our publications for free.
RUI: Thanks for listening. Tune in again in next week.
MARIANN: In the meantime, find useful links in the episode notes.
This episode covers data on foreign direct investment in China in 2022, the State Council’s emphasis on expanding consumption in 2023, China’s manufacturing and services activity in January, and the International Monetary Fund’s global economic growth forecasts. On the Chamber side, the Business Confidence Survey 2023 opened on 30th January for members to give their input on China’s business sentiment.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
China 2022 FDI (in Chinese):
http://www.mofcom.gov.cn/article/syxwfb/202301/20230103379768.shtml
State Council exclusive meeting:
https://english.www.gov.cn/premier/news/202301/28/content_WS63d541b8c6d0a757729e61b9.html
IMF global economic growth projections:
https://www.imf.org/en/Blogs/Articles/2023/01/30/global-economy-to-slow-further-amid-signs-of-resilience-and-china-re-opening
Official manufacturing and non-manufacturing PMI for January (in Chinese):
http://www.stats.gov.cn/tjsj/sjjd/202301/t20230130_1892580.html
Business Confidence Survey 2023:
https://www.europeanchamber.com.cn/en/publications-business-confidence-survey
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: In 2022, the flow of foreign direct investment into China slowed significantly compared to the previous year, as COVID flare-ups and subsequent control measures continued to hamper business activity throughout the year.
MARIANN: Data released by the Chinese Ministry of Commerce on the 18th January showed that FDI increased 6.3 per cent year-on-year in yuan-denominated terms. While this indicated an overall slowdown in foreign capital inflows, certain areas, such as manufacturing and high-tech industries still saw rapid growth in actual use of FDI in 2022. The Ministry also stated that capital inflows from the EU have increased by more than 90 per cent compared to 2021. This is significant, as the 2021 data still showed a 10.4 per cent drop in FDI from the EU. However, since no breakdown was provided about EU investments into China, it is difficult to assess what last year’s increase means in absolute terms.
(MUSIC)
RUI: China will rely on the recovery of consumption as the main economic driving force, as it is moving towards an economic rebound in 2023.
MARIANN: At an exclusive meeting of the State Council held on 28th January, Premier Li Keqiang stressed the need to deliver on policies aimed at increasing consumption. The Premier called for restoring the structural role of consumption in the economy, saying that the greatest potential of the Chinese economy lies in consumption by 1.4 billion people. The same goal was echoed by many of China’s regional governments as well, when in recent weeks they announced their policy targets for the year ahead. The State Council also emphasised the need for active efforts to attract foreign investment, and the implementation of further measures to facilitate cross-border travel.
(MUSIC)
RUI: After months of continuous decline, China’s manufacturing and services activity returned to a growth trajectory in January, as the country started reopening to the world.
MARIANN: According to data released by the National Bureau of Statistics on the 31st of January, the official purchasing managers’ index or PMI showed that manufacturing activity rebounded in January, albeit the pace of growth was mild. New orders showed a stronger recovery than production, as the Chinese New Year holiday bolstered demand, while factories experienced staff shortages due to COVID-infections and workers returning home for the holiday. The recovery in activity differed according to company size: while large companies’ performance did grow, the factory activity of small and medium-sized enterprises still fell short of the 50-point benchmark that separates decline from growth. Business sentiment, however, improved significantly, with manufacturing companies showing increased optimism about their growth prospects for the year ahead. The service industry also showed a rebound in activity in January, ending a six-month long downward trend. Demand notably expanded, with the business activity indices of industries heavily affected by the pandemic, such as retail, accommodation and catering showing rapid improvement in the first month of 2023.
(MUSIC)
RUI: On the 30th of January, the International Monetary Fund released its updated global economic growth forecasts, projecting that China’s sudden re-opening will pave the way for a rapid rebound in activity.
MARIANN: The IMF has revised its 2023 growth forecast for China from the 4.2 per cent calculated in October to 5.2 per cent. On a global scale, the international organisation expects to see weak growth compared to historical records, citing the fight against inflation and the war in Ukraine as the major factors weighing on activity. While the IMF’s outlook on China’s economic performance indicates more optimism due to the country’s re-opening, it warns that China’s recovery could stall amid greater-than-expected economic disruptions from current or future waves of COVID-19 infections or a sharper-than-expected slowdown in the property sector.
(MUSIC)
RUI: The European Chamber’s annual survey of European companies’ sentiment about operating in the Chinese market kicked off on the 30th of January. The Business Confidence Survey’s 20th edition is the Chamber’s first following the easing of China’s stringent pandemic control measures.
MARIANN: Along with the Position Paper, the Business Confidence Survey forms the backbone of the Chamber’s advocacy efforts. It provides a comprehensive analysis of China’s business environment, outlining both the hurdles that European companies face in the Chinese market, as well as the improvements in operating conditions they have observed. The results of the survey will be published in June, and will be presented to Chinese and European stakeholders, media and other organisations.
RUI: If you are our member, don’t miss this valuable opportunity to shape the Chamber’s messaging for the coming year. We are reaching out to all our member companies through their registered primary contact, who are sent a link and a unique access code to the survey. All information received from members is anonymised and will remain strictly confidential. You’ll find a link in the show notes with more details on how you can participate. Don’t hesitate to contact us if you have any questions.
MARIANN: Thanks for listening. Tune in again in next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers China’s gross domestic product (GDP) growth rate, producer and consumer prices, import and export data in December and the year 2022; and Guangdong Province’s 2023 GDP target, with comments from Klaus Zenkel, chair of the Chamber’s South China Chapter. From the Chamber side, the January/February 2022 issue of EURObiz on stability is available to download.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Official 2022 GDP and macroeconomic indicators (in Chinese):
http://www.stats.gov.cn/tjsj/zxfb/202301/t20230117_1892090.html
Official December price indices (in Chinese):
http://www.stats.gov.cn/tjsj/sjjd/202301/t20230112_1891589.html
Official December foreign trade data (in Chinese):
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/4794176/index.html
The January/February 2023 issue of EURObiz:
https://www.europeanchamber.com.cn/en/publications-archive/1072/EURObiz_January_February_2023
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: On the 17th January, the Chinese National Bureau of Statistics reported that China’s GDP grew by 3 per cent in 2022.
MARIANN: As expected, China missed its growth target of 5.5 per cent set by the Government in March, after strict COVID-related measures caused significant disruptions to its economy. China’s fourth quarter GDP performance, however, beat analysts’ predictions, with China’s economy growing by 2.9 per cent year-on-year.
Additional data released the same day showed that China’s industrial production increased by 3.6 per cent Y-o-Y in 2022, with December’s performance again beating analysists’ projections. Furthermore, retail sales performed better than previous months during the last month of the year, as pandemic-control measures were lifted across the country, with sales falling by just 0.2 per cent year-on-year, far slower than the rate of decrease experienced in the previous months. Urban unemployment clocked in at 5.5 per cent in December, with 16.7 per cent of urban youths being unemployed.
(MUSIC)
RUI: According to data released by the Chinese National Bureau of Statistics on the 12th of January, Chinese producer prices fell by a slower rate year-on-year in December, when compared to previous month. Consumer prices rose at a faster pace than in the previous month.
MARIANN: The Bureau explained the slower drop in factory gate prices as being a result of prices being compared with a relatively low base from the previous year. On a month-on-month basis, however, producer prices went from a slight increase in November to a 0.5 per cent decrease in December due to the impact of decreased energy and raw material costs. As for the whole year, producer prices edged up by 4.1 per cent in 2022, compared with 2021. Consumer prices went up 1.8 per cent year on year in December, with the rate of increase accelerating slightly from the previous month. Annual inflation was mild, as consumer prices inched up only 2 per cent year-on-year, staying below the government’s target of 3 per cent.
(MUSIC)
RUI: According to official data released by the General Administration of Customs, in December China registered its steepest fall in exports since it first implemented COVID-control measures in February 2020.
MARIANN: Chinese exports dropped by 9.9 per cent year-on-year in dollar terms, as the country grappled with a surge of COVID-infections after abruptly cancelling its stringent pandemic control measures. Imports declined by 7.5 per cent year-on-year, the second fastest declined experienced during the last two and a half years.
As for the whole of 2022, Chinese exports grew by 7 per cent, while imports increased by 1.1 per cent compared to 2021. China’s largest trading partner during this period was the Association of Southeast Asian Nations, or ASEAN, followed by the European Union and then the United States. Chinese exports to the EU increased by 8.6 per cent while imports from the EU fell 7.9 per cent, in dollar terms, last year.
(MUSIC)
RUI: China’s manufacturing hub, Guangdong Province, frequently dubbed as the world’s factory, has set its 2023 GDP growth target at 5 per cent.
MARIANN: Commenting on the outlook on doing business in Guangdong in 2023 is Klaus Zenkel, chair of the European Chamber’s South China Chapter:
/Soundbite/
(MUSIC)
RUI: At the 20th Party Congress held last October, ‘stability’ was one of the buzzwords that cropped up regularly in key speeches and commentary. However, the uncertainty experienced under zero-COVID, followed by China’s abrupt abandonment of the policy, meant a different reality was experienced on the ground for most people. To make things worse, COVID is just one part of this story: volatile energy prices, China’s weak real estate sector, high local government debt levels and geopolitical tensions mean we stand on shaky ground heading into 2023.
MARIANN: Read the January/February issue of the European Chamber’s bimonthly magazine, EURObiz to learn more about the importance of stability for businesses, as well as other topics such as the new Guangzhou-Nansha tax incentive, regenerative forestry’s role in safeguarding biodiversity, and the European Chamber’s advocacy success in international cargo relay.
RUI: Thanks for listening. Tune in again in February to stay up to date with the Chinese market in the Year of the Rabbit.
MARIANN: In the meantime, find useful links in the episode notes.
This episode covers the resumption of international travel with comments from Tammy Qiu, vice chair of the European Chamber’s Aviation and Aerospace Working Group; border reopening between the Mainland and Hong Kong; and Caixin’s data on business activity in December. From the Chamber side, on 9th January, a delegation kicked off its first in-person European Tour in Brussels after three years of the pandemic.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Aviation bodies’ joint statement on new EU recommendations for travel from China:
https://www.travelindustrywire.com/article124256.html
Border reopening between Hong Kong and Mainland China:
https://english.www.gov.cn/news/topnews/202301/08/content_WS63ba69adc6d0a757729e5430.html
Caixin China General Services PMI
https://www.pmi.spglobal.com/Public/Home/PressRelease/984bbb8cfa404ed7a9b034e5dbe97472
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: On the 8th of January, China took a major step towards reopening to the world. Inbound travelers no longer have to quarantine and pre-departure testing requirements were streamlined. China also cancelled its pandemic related restrictions on outbound travel and resumed issuing travel documents for Chinese nationals. Following this, many countries introduced new curbs on travellers from China, citing the prevalence of COVID-19 in the country and concerns that new COVID-variants may arise, as justification for doing so.
MARIANN: A new EU recommendation, issued on 4th January, suggests that passengers travelling from China to the EU should be required to present a negative PCR test result. Several aviation bodies, including the International Air Transport Association released a joint statement the following day, which pointed out that the EU’s recommendation was at odds with the most recent assessment by the European health authorities. At the beginning of January, the European Centre for Disease Control and Prevention stated that it did not expect Europe’s own epidemiological situation to be impacted by the current surge of COVID-cases in China. The joint statement called government authorities to stop testing inbound passengers and instead test wastewater from airports and aircraft coming from China as an alternative method for tracking COVID.
RUI: To find out more about what to expect in the year ahead with regards to the resumption of international travel, we reached out to Tammy Qiu, Vice Chair of the European Chamber’s Aviation and Aerospace Working Group.
Tammy Qiu: Echoing the joint statement by the industry organisations, we expect EU Member States and China could work together for an agreed-upon entry requirements benefiting people’s mobility and economic development from the business perspective.
With the reopening of China’s borders, there is one thing for sure, that is: dramatic recovery of the Chinese civil aviation industry. The CAAC expects to see a notable rise in air traffic in 2023, reaching about 75 per cent of pre-pandemic levels. It was justified by both Chinese and foreign airlines busy with filing passenger flights resumption under the Bilateral Air Services Agreement, known as BASA. But nothing could happen overnight, international flight resumption heavily relies on further relaxation of travel restrictions, air travel demand, airlines’ reactivation and mobilisation of aircraft and crew, ground operations at airports, etc. We anticipate all concerned parties could pull together for a common goal of the industry rebound in 2023.
(MUSIC)
RUI: Tens of thousands of people crossed the border between the Mainland and Hong Kong on the 8th of January, as the Mainland reopened its borders.
MARIANN: The Hong Kong government announced that a maximum of 60 thousand people will be allowed to cross the border daily during the first phase of the reopening. The two sides will then review their experiences following the first week of reopening, and make decisions on the second phase’s arrangements accordingly.
(MUSIC)
RUI: The Caixin China General Services purchasing managers’ index indicated that the service sector’s activity continued to fall in December, as ongoing efforts to contain the spread of COVID undermined business operations and demand.
MARIANN: Business activity fell to a six-month low in December. That said, the rate of contraction softened compared to previous months, and firms operating in the service sector showed renewed optimism, projecting a strong recovery from the pandemic in the year ahead. The composite PMI, that includes both manufacturing and services activity, also showed a softer decrease in business activity in December. Demand, however, remained lacklustre, with new orders dropping further, particularly in the manufacturing sector. The Caixin Insight Group has pointed out that in order to boost consumption, Chinese policymakers will have to put forward policies aimed at stabilising the job market and residents’ disposable income.
(MUSIC)
RUI: After a three-year break due to the COVID-pandemic, the European Chamber kicked off its first in-person European Tour on the 9th of January, sending a delegation to Brussels for a week long tour.
MARIANN: The Chamber’s president, vice presidents, board members and senior working group representatives will meet with European authorities as well as industry and business associations. During these meetings, our delegates will ensure the Chamber’s voice is heard on key issues, detail what the current situation is like on the ground for businesses operating in China, and, present the main findings of our most recent research reports.
RUI: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, find useful links in the episode notes.
This episode covers China’s easing of its pandemic control measures; manufacturing and services activity data in December; and Rhodium Group’s prediction of China’s 2022 gross domestic product growth rate and 2023’s growth prospects. Join the Chamber’s national webinar on 9th January on US export controls and their impact on businesses.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
December PMI (in Chinese):
http://www.stats.gov.cn/tjsj/sjjd/202212/t20221230_1891389.html
Rhodium Group report ‘Now for the Hard Part: China’s Growth in 2023 and Beyond’:
Now for the Hard Part: China’s Growth in 2023 and Beyond
Chamber event: US Export Controls and Their Impact on European Business in ChinRUI:
https://www.europeanchamber.com.cn/en/upcoming-events/23303
European Chamber membership:
https://www.europeanchamber.com.cn/en/membership-benefits
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: As 2022 was coming to an end, Chinese authorities made a series of announcements about easing China’s pandemic control measures.
MARIANN: The National Health Commission announced that starting from the 8th of January, China will downgrade COVID-19 management from Class A to Class B. Inbound international travelers to China will no longer be required to quarantine and will only have to show a 48 hour negative PCR test result to board flights to the country. Disease control measures targeting imported cargo will also be lifted. In addition, China will resume outbound tourism and the issuance of passports for Chinese nationals, and also announced it intends to optimise visa applications for foreign nationals who plan to travel to China for the purposes of work, study, business or family reunions.
(MUSIC)
RUI: According to China’s National Bureau of Statistics, Chinese manufacturing and services activity shrank to the lowest level in almost three years in December, after an abrupt change in the country’s COVID-19 containment policies led to a huge surge in infections.
MARIANN: The official purchasing managers’ indices or PMI showed that manufacturing activity continued to shrink for the third consecutive month, falling to the lowest level since China first introduced COVID-19 containment measures in February 2020. In December, manufacturing production fell at a sharper rate than new orders, as companies struggled to keep staffing levels stable amid a rise of COVID infections. Suppliers’ average delivery times also significantly suffered as a result. As for non-manufacturing, the construction sector’s expansion continued to slow down, while services activity shrank further, with 15 out of 21 surveyed industries contracting in December. Among the worst hit were retail, road transport, accommodation and catering services providers. One positive was a spike in business activity for the aviation industry, with the volume of domestic and international flights recovering significantly following the optimisation of China’s pandemic measures and the upcoming Spring Festival.
(MUSIC)
RUI: In a new report, released on the 29th of December, the Rhodium Group predicted that China’s 2022 GDP growth lagged far behind the government’s 5.5 per cent target.
MARIANN: The New York-based think tank estimated China achieved a full-year GDP growth of about 2.5 per cent, while stressing that its real economic performance was likely even weaker. The report cites the property sector’s continued slowdown and the adverse effects of extended COVID-lockdowns, coupled with a sudden lifting of pandemic control measures, as the major factors undermining China’s lacklustre economic performance. For the year ahead, the Rhodium Group predicts weaker investments and external demand, with the latter causing China’s export growth to slow. The report suggests that by lowering expectations for 2023 China could go a long way towards re-establishing its credibility and justifying necessary policies along the way.
(MUSIC)
RUI: For many policymakers, economic sanctions have become the tool of choice for handling geopolitical challenges. The United States imposed its heaviest-to-date export controls on advanced electronics destined for China in October 2022, which further heightened tensions between the two major markets. Managing US export control requirements has since increasingly become a part of day-to-day business operations for multinational companies.
MARIANN: On the 9th of January, the European Chamber will host an exclusive online event to help its members better understand the developments following the US sanctions and their impact on European business in China, as well as on global industrial and supply chains.
RUI: If you are interested in our exclusive events, but you or your company are not one of our members yet, visit our website to find out more about our membership and its many advantages.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.
This episode covers November’s manufacturing, retail and services data, and unemployment rate; the new guideline to stabilise domestic demand; outcomes of the Central Economic Work Conference; and a plan to promote the development of modern logistics by 2025. From the Chamber side, its Intellectual Property Rights Working Group submitted comments to the China National Intellectual Property Administration on the revised draft of the Patent Examination Guidelines.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
November economic data (in Chinese):
http://www.stats.gov.cn/tjsj/zxfb/202212/t20221215_1891018.html
Guideline on improving domestic demand:
https://english.www.gov.cn/policies/latestreleases/202212/15/content_WS639a6338c6d0a757729e474b.html
Central Economic Work Conference
https://english.www.gov.cn/news/topnews/202212/17/content_WS639d0051c6d0a757729e4885.html
Plan to promote the development of modern logistics:
https://english.www.gov.cn/policies/latestreleases/202212/15/content_WS639ada84c6d0a757729e47de.html
European Chamber’s comments to CNIPA:
https://www.europeanchamber.com.cn/en/lobby-actions/6062
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(Music)
RUI: Data released by China’s National Bureau of Statistics, on 15th December, shows that COVID-19 pandemic control measures continued to weigh heavily on the country’s economic activity in November.
MARIANN: Production at large industrial firms expanded 2.2 per cent year-on-year — the slowest pace seen since May, when the stringent lockdown of numerous cities across China, including Shanghai, brought many companies’ operations to a halt. November’s production data was the third weakest recorded for any month since March 2020, when China’s economy started to rebound from the first onset of COVID-19.
Retail sales were also lacklustre, shrinking 5.9 per cent year-on-year in November amid weak domestic demand. Services were hit especially hard by COVID control measures, with catering revenue falling by more than 8 per cent. The surveyed urban unemployment rate inched up slightly from the previous month, reaching 5.7 per cent in November. Despite improving marginally, youth unemployment remained above 17 per cent in November.
(Music)
RUI: On 14th December, The Central Committee of the Communist Party of China and the State Council jointly issued a new guideline aimed at the long-term stabilisation of domestic demand.
MARIANN: The main objective set out by the new guideline is the establishment of a sound domestic demand system by 2035. To accomplish this, China seeks to boost investment in consumption, improve the quality of supply to better meet demand, and address distribution gaps by 2025. The plan also emphasises the promotion of digital industrialisation and industrial digitalisation, as well as the construction of a digital society and digital government.
(Music)
RUI: On 16th December, China’s top leadership concluded the two-day Central Economic Work Conference, where it was agreed that a renewed emphasis will be placed on stabilising growth.
MARIANN: A host of major policy objectives were outlined to facilitate the recovery of China’s COVID-hit economy. Apart from reinforcing GDP growth, stabilising the labour market, boosting domestic demand and rebuilding market confidence were set as key priorities for next year. The government will also move forward with plans to further optimise its pandemic control measures, to minimise their impact on economic activity and people’s lives. Through these steps, China aims to achieve a strong strong economic rebound during the first half of 2023.
(Music)
RUI: According to a circular released on 15th December, China’s State Council approved a plan to promote the development of modern logistics infrastructure by 2025.
MARIANN: The plan emphasised the establishment of a safe, efficient, smart and green logistics system, that strikes a better balance between supply and demand, and improves the connectivity between domestic and international logistic chains. In addition, it stressed the need to improve the quality and efficiency of China’s logistics networks, all while reducing costs through various methods, including the sharing of logistics resources and speeding up inventory turnovers. Finally, the circular also underlined the importance of building an international logistics network, and the construction of supporting facilities for green energy transition.
(Music)
RUI: On 15th December, the European Chamber’s Intellectual Property Rights Working Group submitted comments to the China National Intellectual Property Administration on the revised draft of the Patent Examination Guidelines.
MARIANN: The Chamber’s member companies submitted detailed comments and suggestions on how to improve the new guidelines. Overall, the revised draft mainly aims at supporting amendments to the new Patent Law. The revised draft of the guideline includes a section on the extension of pharmaceutical patent terms, which is of great significance for pharmaceutical innovation, and as such, the Chamber looks forward to its implementation.
RUI: Thanks for listening. Tune in again in January, when we will be back with new episodes each week.
MARIANN: In the meantime, find useful links in the episode notes.
This episode covers measures to further optimise pandemic control and boost economic recovery, BioNTech’s mRNA vaccines to be permitted for German citizens residing in China, Chinese producer and consumer prices in November, and Chinese Premier Li Keqiang’s meeting with six major international economic organisations during the 7th “1+6” Roundtable. In addition, the November/December 2022 edition of the European Chamber’s bimonthly magazine, EURObiz on diversity and inclusion, which is available to download here, is introduced.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
Official price indices (in Chinese):
http://www.stats.gov.cn/tjsj/sjjd/202212/t20221209_1890857.html
7th ‘1+6’ Roundtable:
https://english.www.gov.cn/premier/news/202212/10/content_WS6393c546c6d0a757729e43c2.html
Optimising COVID controls in logistics and transportation (in Chinese):
https://xxgk.mot.gov.cn/2020/jigou/zghssjzx/202212/t20221208_3720971.html
EURObiz, November/December 2022:
https://staticeurobiz.europeanchamber.com.cn/wp-content/uploads/2022/11/EURObiz_2022_Nov-Dem.pdf
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: The Chinese government has continued releasing a slew of measures over the past week to further optimise pandemic control and boost economic recovery.
MARIANN: One day after the release of ten new measures aimed at further adjusting the country’s COVID response, the Ministry of Transport issued a notice on the 8th December, detailing how pandemic controls will be optimised in the logistics and transportation sectors. Among the changes listed in the notice was the suspension of the use of health codes for domestic travel. The Ministry also called for ensuring orderly transportation services and a smooth flow of traffic, as well as for maintaining normal operations while strengthening the protection of front line workers. Another major step towards resuming normal domestic travel was the discontinuation of the travel history tracking app on 13th December.
(MUSIC)
RUI: On 9th December, China’s foreign ministry announced / that German citizens residing in China / will be granted access to BioNTech’s mRNA vaccines – which is the first time Beijing has permitted the use of foreign developed vaccines on the Chinese mainland.
MARIANN: The move was widely expected following German Chancellor Olaf Scholz’s visit to Beijing last month. The announcement came days after Germany granted permission for the Chinese developed Sinovac jabs to be imported to Germany so that they can be administered to Chinese citizens. The European Chamber has been advocating, and will continue to advocate, for the roll out of leading mRNA vaccines for domestic use for all citizens in China, regardless of their nationality. Allowing the use of the best combination of vaccinations and boosters could help prevent a spike in serious COVID-19 related illnesses amid the sharp increase of infections seen in recent days.
(MUSIC)
RUI: According to data released by the National Bureau of Statistics, year-on-year, Chinese producer prices have continued falling for the second month in a row in November, while the increase of consumer prices decelerated to the slowest pace since March.
MARIANN: The bureau explained the 1.3 per cent drop in factory gate prices with a high base from last year, while pointing out that on a month-on-month basis, producer prices inched up slightly due to high energy and raw material costs. The rise of consumer prices eased to 1.6 per cent year-on-year, mainly due to the combined impact of a higher base in the same period last year and weakened domestic demand.
(MUSIC)
RUI: On the 9th of December, Chinese Premier Li Keqiang met with the heads of six major international economic organisations in Huangshan, Anhui province, and held discussions on global economic matters.
MARIANN: The meeting was held as the seventh annual roundtable between China and the six organisations, including the World Trade Organization, the International Monetary Fund, and the World Bank. The participants met in person for the first time since the onset of the Covid-pandemic. Premier Li underlined China’s readiness to work with all parties to chart the course of openness and cooperation and promote the steady growth of the global economy. He also pledged that China would double down on attracting foreign investment and provide equal access to all supportive policies for both domestic and foreign-invested firms. The Chinese Premier said that moving forward, China would better coordinate pandemic control with economic and social development, and would take further steps to ensure the steady operation of industrial and supply chains, and facilitate international exchanges and the flow of people.
(MUSIC)
RUI: Multiple research studies have shown that teams made up of people from a diverse set of backgrounds, ages and perspectives fare better than non-diverse teams. Building an inclusive environment is also important for employees to feel confident enough / to make suggestions and be innovative. The same concept applies to society and policy-making as well as business.
MARIANN: The November/December 2022 edition of the European Chamber’s bimonthly magazine, EURObiz looks at diversity and inclusion, and its importance for European business.
RUI: Also featured in this edition are articles on some of the key business trends to expect in 2023, the market prospects and investment paths of China’s biopharma industry, and the revised standards that allowed more types of cheese to enter the Chinese market.
RUI: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, find useful links in the episode notes.
This episode covers the business implications of European Council President Charles Michel’s visit to China, November foreign trade data, the expansion of the Geographical Indications products from the EU, and former Chinese President Jiang Zemin’s passing. Join the Cybersecurity Conference online on 12th December to understand China’s regulatory developments in cybersecurity and data protection.
Learn how to subscribe here.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Council President’s visit to Beijing:
https://www.consilium.europa.eu/en/press/press-releases/2022/12/01/remarks-by-president-charles-michel-following-his-visit-to-china/
https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/wshd_665389/202212/t20221201_10983932.html
GI list update (in Chinese):
https://www.cnipa.gov.cn/art/2022/12/2/art_575_180611.html?xxgkhide=1
Foreign trade data (in Chinese):
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/4720438/index.html
China’s financial markets pay tribute to Jiang Zemin (in Chinese):
http://www.csrc.gov.cn/csrc/c100028/c6894494/content.shtml
European Chamber Cybersecurity Conference:
https://www.europeanchamber.com.cn/en/upcoming-events/23119/_Webinar_2022_Cybersecurity_Conference
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: On 1st December, European Council President Charles Michel visited Beijing and held meetings with Chinese President Xi Jinping and Premier Li Keqiang.
MARIANN: The main highlight of the talks with regard to business was that the two sides showed readiness to continue to find areas of engagement. President Xi underlined the importance of strengthening macroeconomic policy coordination and fostering new growth drivers in areas such as digital economy, green development and environmental protection. He called for joint efforts to keep industrial and supply chains secure, stable and reliable, and to reject practices of decoupling and protectionism. He also urged the European side to oppose attempts to politicise and weaponise exchanges in economy, trade, science and technology. The President of the European Council called for greater reciprocity in business and a real level-playing field for European companies in China. He warned that a shift into ‘self-reliance’ carries dangers not only for China and the EU, but also for the world. Ahead of his visit to Beijing, a European Chamber delegation briefed European Council President Michel and his team on the key issues shaping China’s political, social and economic environment, and the impact that the Chinese leadership’s response to them has had on European businesses.
(MUSIC)
RUI: China’s November foreign trade data showed that the decline in exports and imports both accelerated from the previous month amid global and domestic economic headwinds.
MARIANN: In dollar-denominated terms, exports shrank 8.7 per cent year-on-year in November, which was the weakest data since the Chinese economy was first hit by the onset of the COVID-19 pandemic in February 2020. Imports declined at the fastest pace since May 2020, dropping more than 10 per cent year on year in November. The slowdown in foreign trade came as pandemic-related restrictions hampered domestic demand in November, while global demand continued to suffer from factors such as high inflation and recession woes in many countries.
(MUSIC)
RUI: On the 2nd December, China’s National Intellectual Property Administration issued a notice about the expansion of the Geographical Indications or GI list, consisting of EU products that enjoy protection against imitation in the Chinese Market.
MARIANN: With the new expansion there will be 175 new items added to the list, including various types of wine, liquors, cheese and meat products. The original list consisted of a hundred European products when the GI agreement was signed in November 2019.
(MUSIC)
RUI: Trading was suspended for three minutes across China’s financial markets on Tuesday morning, with people standing in tribute to former Chinese President Jiang Zemin, who passed away on the 30th November in Shanghai, at the age of 96.
MARIANN: Serving as president of China between 1993 and 2003, Jiang Zemin kept China committed to reform and opening up and brought the country into the World Trade Organization.
(MUSIC)
RUI: 2022 marks the fifth anniversary of the rollout of China’s Cybersecurity Law and the first anniversary of the enactment of the Data Security Law and the Personal Information Protection Law. A host of related regulations have been released in recent months, especially on cross-border data transfer, bringing about imminent compliance requirements for foreign companies operating in the Chinese market.
MARIANN: Join us on the 12th December at this year’s Cybersecurity Conference to listen to a stellar line-up of thought leaders from industry, academia, law firms and research institutes explain the recent regulatory developments in cybersecurity and data protection.
RUI: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, find useful links in the episode notes.
This episode covers the European Chamber’s comments on the ’20 Measures’, which are aimed at optimising China’s COVID containment policy; data on Chinese manufacturing and services activity in November released by China’s National Bureau of Statistics; the International Monetary Fund’s annual examination of the state of China’s economy and predictions of economic growth; and industrial profits during the first ten months of 2022. In addition, the European Chamber will host its annual conference dedicated to China’s economic outlook on the 9th of December.
Learn how to subscribe.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.
Read more:
European Chamber comments on the 20 Measures:
https://www.europeanchamber.com.cn/en/national-news/3486
Official PMI, November (in Chinese):
http://www.stats.gov.cn/tjsj/zxfb/202211/t20221130_1890710.html
IMF statement:
https://www.imf.org/en/News/Articles/2022/11/21/pr22401-imf-staff-completes-2022-article-iv-mission-to-the-peoples-republic-of-china
January-October profits of Chinese industrial firms (in Chinese):
http://www.stats.gov.cn/tjsj/zxfb/202211/t20221125_1890633.html
European Chamber Annual Conference:
https://www.europeanchamber.com.cn/en/upcoming-events/23133
Transcript:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
(MUSIC)
RUI: COVID-19 flare-ups and varying degrees of related lockdown and quarantine measures have continued to test both businesses’ resilience and people’s patience in several major Chinese cities over the past week.
MARIANN: On the 23rd of November, the European Chamber submitted comments to the Chinese Ministry of Commerce and the China Council for the Promotion of International Trade regarding the country’s COVID-19 containment policy and the recently released ‘20 Measures’, which are aimed at optimising China’s dynamic zero-COVID strategy. Although the Chamber welcomes the introduction of the measures, it also expressed concern over the lack of proper preparation for their introduction, as local governments appeared to have not been well informed prior to their release. This has led to erratic implementation across different parts of China, creating a great deal of uncertainty among the public and causing a significant drop in business confidence.
RUI: The European Chamber believes that China should continue to remove stringent COVID-control measures to the greatest extent possible based on scientific evidence and strive to get life back to normal. To this end, the Chamber put forward a list of recommendations for the Chinese government’s consideration.
MARIANN: The recommendations include the introduction of a robust vaccination drive, particularly among more vulnerable groups, and the promotion of a comprehensive, nationwide education campaign about COVID-19 to alleviate any anxiety about potential infection and to illustrate that being fully vaccinated significantly reduces the risk of serious disease.
(MUSIC)
RUI: According to China’s National Bureau of Statistics, Chinese manufacturing and services activity shrank further in November, with non-manufacturing activity falling to the lowest level since the first set of measures were introduced in China to curb the spread of COVID-19 in February 2020.
MARIANN: The official purchasing managers’ indices or PMI dropped further below the 50-point mark that separates growth and contraction. The activity of small-sized companies fell sharply from October, while that of large and medium-sized enterprises also decreased, albeit at a softer pace. Supply and demand both weakened further, with demand contracting slightly more. Companies continued trimming their staffing levels as a consequence. As for non-manufacturing, the construction sector’s expansion continued to slow down, while the decrease of services activity accelerated further, with 15 out of 21 surveyed industries contracting in November.
(MUSIC)
RUI: The International Monetary Fund has concluded its annual examination of the state of China’s economy, and urged Beijing to recalibrate its COVID-19 strategy and take further action to ease the property sector crisis to support growth.
MARIANN: In a statement issued on 23rd November, the IMF highlighted that following an impressive recovery from the initial impact of the pandemic, China’s growth has slowed and remains under pressure. According to the statement, the combination of more contagious COVID variants and persistent gaps in vaccinations have led to the need for more frequent lockdowns, weighing on consumption and private investment. The IMF called on China to accelerate its vaccination drive to counter the downward trend, and projected 3.2 per cent GDP growth for 2022. It added, that if the current zero-COVID strategy can be gradually and safely lifted in the second half of 2023, GDP growth could improve to 4.4 per cent in the next two years.
(MUSIC)
RUI: China’s large industrial firms saw their profits fall rapidly during the first 10 months of 2022.
MARIANN: According to the National Bureau of Statistics, industrial profits declined 3.0 per cent from January to October 2022, compared to the same period a year prior. The rate of decline was the fastest since August 2020. The official dataset revealed that privately-owned industrial companies were the worst hit, with their profits dropping more than 8 per cent year-on-year. Meanwhile, state-owned industrial firms saw their profits grow, albeit at a moderate pace during the first 10 months of 2022. A breakdown by sectors showed that companies in the energy and mining sectors fared much better than those in manufacturing, with profits in the oil and gas extraction sector more than doubling from the same period last year.
(MUSIC)
RUI: The European Chamber will host its annual conference dedicated to China’s economic outlook on the 9th of December.
MARIANN: Join us to hear a distinguished group of global thought leaders from academia, industry, think tanks and government discuss what path China will likely take in the face of a host of domestic challenges and external pressures.
RUI: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, find useful links in the episode notes.
This episode is recorded under unusual circumstance, with your hosts unable to access the European Chamber’s Beijing office although there is no confirmed case in the building. This episode covers the COVID-19 flare-up in Beijing, with comments from Adam Dunnett, Secretary General of the European Chamber; measures to improve employment among fresh graduates released by […]
This episode covers the updated inbound travel policy, based on the National Heath Commission’s recently released 20 measures to optimise China’s COVID-19 response as well as notices from Chinese embassies in several European countries; the on-the-ground situation for businesses in Beijing and Guangzhou due to COVID recent flare-ups, with comments from European Chamber Vice President […]
This episode covers German Chancellor Olaf Scholz’s visit to China; the 5th China International Import Expo (CIIE) in Shanghai, with comments from European Chamber Vice President and Shanghai Chapter Chair Bettina Schoen-Behanzin; China’s October foreign trade data; and China’s National Development and Reform Commission’s latest policy incentives for private investment. News from the Chamber includes […]
This episode covers China’s manufacturing and services activity data in October; inhalable COVID-19 vaccines in Shanghai as a booster; the updated Catalogue of Encouraged Industries for Foreign Investment, with comments from Mr Xu Zhonghua, chair of the Energy Working Group; and industrial profits data from the first nine months of this year. In addition, the […]
This episode covers the business implications of the Communist Party of China’s 20th National Congress, China’s third quarter gross domestic product (GDP) and sectorial data released by the National Bureau of Statistics, September foreign trade data, and updates on the increase of international flights to China, with comments from Philippe Bardol, chair of the Chamber’s […]
This episode covers the National Development and Reform Commission’s take on the third-quarter performance of China’s economy; September producer and consumer price data; revised regulations relating to foreign-funded financial firms that service enterprise groups, with comments from Susan Gao, vice chair of the Chamber’s Banking and Securities Working Group; and the latest drop in container […]
This episode covers the Caixin China General Services PMI of September, tourism data from the Golden Week with European Chamber President Joerg Wuttke’s comments on the impacts of domestic travel restrictions and results from China’s central bank survey on industrial entrepreneurs sentiment in the third quarter. Join us online on the 25th October to find […]
The European Union Chamber of Commerce in China’s new podcast show. Subscribe on Apple Podcasts, Spotify and Google Podcasts.