European Chamber Annual Conference 2023 Go back »
2023-12-12 | All chapters
European Chamber’s Annual Conference 2023 in Beijing
On 12th December, the European Union Chamber of Commerce in China hosted its annual conference in Beijing. Titled Regaining Economic Momentum in an Environment of De-risking, the event was attended by member companies, diplomats, academics and media.
Jens Eskelund, president of the European Chamber, delivered opening remarks. He said that expectations for the Chinese economy, following the opening of the country’s borders and the end of ‘zero-Covid’ policies, had been unrealistic. Confidence had been further dented by the poor state of relations between China and many western countries, he said, and businesses had learnt that “geopolitics matter”.
He also highlighted some of the results of the European Chamber’s Business Confidence Survey, in which a majority of Chamber members reported that business in China had become more difficult, with recent national security laws a particular source of concern.
“There is mixed messaging from the Chinese Government. We’ve seen an increased focus on national security across a widening scope of areas […] but we’ve also seen the opposite,” said President Eskelund, who went on to highlight the recent decision to delay the phasing out of various tax benefits available to foreign nationals working in China.
In the second keynote speech, European Union Ambassador to China Jorge Toledo Albiñana, updated the conference on recent European Union (EU) diplomacy with China. He told attendees that recent high-level EU-China meetings had been characterised by “candid, substantive discussions”, but acknowledged there had been no major breakthroughs. The ambassador went on to describe the current trade imbalance and other issues between the two sides as “unsustainable”.
Panel 1: China’s economic review and outlook
The scale of current economic problems was discussed, with one panellist highlighting the Chinese Government is currently trying to deal with a multitude of problems but only has limited bandwidth. Limited excess savings and a tough jobs market were raised as key problems facing the economy. Many businesses are facing challenges in an economy now experiencing slower rates of growth, with one speaker saying that foreign firms have been hit particularly hard.
Panellists also discussed what future opportunities there might be for foreign companies in China. While there was agreement that the country hoped to achieve self-sufficiency in certain areas, one speaker thought that this would not be entirely possible, arguing that even when it came to key strategic areas like food, energy and technology, some foreign dependencies would remain.
Current issues facing China’s real estate industry were repeatedly raised by panellists, with one speaker arguing that there was no real replacement for the industry as a driver of economic growth and that house prices in second-tier cities might never recover, although contagion should be manageable.
Panel 2: De-risking and self-reliance – what lies ahead?
The second panel discussed EU efforts to ‘de-risk’ its supply chains and China’s aim to become self-reliant in many areas. One panellist highlighted that while EU de-risking measures are “targeted and narrow”, China’s efforts to build self-reliance in many sectors are broad.
Another panellist said that 2024 would be even more complicated than 2023, noting that some member companies are either thinking of leaving or have already left. The same panellist went on to say that foreign businesses were not handling the new data regulations well and that increased uncertainty was making mergers and acquisitions more difficult, fuelling a reversal in foreign direct investment (FDI).
While the panellists agreed that the current environment is very challenging, one made clear that the EU still believes in a “rules-based system” and that de-risking should remain “targeted and proportionate”. Another speaker outlined some of the “non-risky” areas where cooperation with China should continue.
Panel 3: Geopolitics in 2024 – What to expect from EU-China relations and wider developments
While earlier discussions had focussed on the EU’s approach towards China, panellists debating the geopolitical environment also discussed China’s relationship with the US and American efforts to decouple parts of its economy from China.
One panellist thought that all sides would try and contain tensions in 2024, although de-risking/de-coupling would continue, arguing that the EU would be subjected to considerable pressure from the US in its dealings with China. Another panellist said that US-China relations would be “treading water” for the next 12 months.
It was also highlighted that the EU’s trade relationship with China simply is not creating enough jobs in Europe and that the continent’s politicians will have to react to that. One speaker thought that the EU would likely put tariffs on Chinese electric vehicles next year.
Other geopolitical issues that were explored included the risk of a Chinese invasion of Taiwan and the possible re-election of Donald Trump in the United States. On Trump there was general agreement that if elected to the White House next year he would be likely to take an extremely negative approach towards China.
The Chamber’s Secretary General Adam Dunnett closed the conference with concluding remarks and thanked all the participants for their contributions.
