European businesses grin and bear it in slowing ChinaBEIJING, May 30 — European companies see China as the one bright spot in a gloomy world economy, even as they grapple with the country’s slowing economic growth, rising labour
China’s economy has slowed as export growth stalls in the face of weak global demand. Yesterday both the IMF and OECD cut their growth forecasts for China, and some economists say China could miss its own 7.5 per cent growth target this year.
“Despite many of the lowest business confidence results since the onset of the global economic downturn, it is clear that China is still being perceived as the best of a challenging global situation,” the annual report from the European Chamber of Commerce in China said.
Fewer companies in the survey reported profit or revenue increases in 2012, and the ratio of companies reporting losses doubled. Sixteen per cent of companies surveyed said their revenues fell, compared with just 6 per cent in 2011.
The reasons cited included higher labour costs, increased competition and a difficult regulatory environment, as well as macroeconomic conditions in China and abroad, the survey said.
Davide Cucino, the chamber’s president, told a separate briefing that members conservatively estimated they lost a collective €17.5 billion (RM70 billion) in revenue last year because of market access difficulties.
“It is not an issue of lack of opportunities, it is an issue of offering those opportunities in an equal way to everybody,” he said. He did not give specific details.
About a third of companies said lower domestic demand was also hurting net profit margins.
While some 70 per cent said they were optimistic about their business sector in the next two years, that was the lowest level of optimism since 2009.
Still, 94 per cent of companies said China was either increasingly important or as important as before for their global strategies, and 84 per cent said they were considering expanding their current operations. — R