President's Statement

Joerg 2019

Digitalisation Progress Highlights Growing Distrust

In the last issue of Eurobiz, I spoke about the challenges for European businesses operating in China in the midst of the COVID-19 pandemic. The ensuing stress on supply chains and operations will be omnipresent over the coming years. However, we should not be paralysed by that challenge and waste this crisis. One of the fields where we have seen considerable progress since the outbreak is the digitalisation of business. This makes it even more critical that China updates its policies regarding data security and internet governance. Without doing so, the considerable progress made in the country’s digitalisation will be of limited value, and may even drive a wedge between the very different emerging digital environments in China and Europe.

Effective digital communication within companies, but also between businesses and organisations, has proven to be a light in the darkness cast by the shadow of COVID-19. In many ways, it is fortunate that the worst pandemic in a century came at a time in which the importance of physical space is able to be somewhat replaced through digital solutions – who knows how we could have managed the last few months without a reliable virtual world? It has helped many businesses, and even the European Chamber itself has been able to maintain nearly all of its operations, continuing to add value for our members despite these trying times.

Every European Chamber chapter has seen digital communication channels open between them and the Chinese Government, local and central alike. Additionally, we have been able to connect our members with global thought leaders through our recent May VIP webinar series. It is clear that China, and the world, will move towards a more digital way of working. The COVID-19 crisis is merely accelerating some global trends that were already underway.

At the same time, there is the downside of heavier reliance on China’s digital infrastructure in daily life. Concerns over privacy and safety in China’s cyberspace need to be addressed to boost trustworthiness. Our recently published Business Confidence Survey 2020 shows that 80 per cent of respondents still report that internet instability, slowness or access restrictions in China are hindering company operations.

In January 2020, a study by the Berlin-based think tank Bertelsmann Foundation on Europe’s view of China and the United States (US)-China tensions reflected these concerns with the finding that only six per cent of Europeans believe that Chinese companies will handle their data responsibly. Much needs to be done to demonstrate to Europeans that China and its companies handle consumers’ data in a responsible manner, while respecting privacy concerns and rules.

Mutual trust between the European Union, China and the US is at an all-time low at a time when it is most necessary. Decoupling of one kind or another is expected and disconcerting, especially on the digital and tech fronts. To try and stay ahead of the curve, the European Chamber plans to launch a study on decoupling in December 2020. We encourage members to participate in our related survey in September 2020, and open their doors for interviews.