Business Confidence Survey 2019

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This year’s Business Confidence Survey contrasts China’s lagging regulatory reform and remnants of its former economic model with the increasingly firm commitment that European companies hold toward the mature and vibrant Chinese market.

While a few areas saw progress, China’s reform agenda has failed to proceed at a pace that will meet the expectations of European business. A large majority of members expect regulatory obstacles to, at worst, increase significantly over the next five years or, at best, remain the same. Meanwhile, State-owned enterprises are present in more than two-thirds of the economy, and are dominant in key sectors. Furthermore, a fifth of members report feeling compelled to transfer technology as a condition for market access, with many of these transfers having taken place in 2018.

These difficult conditions are hardly welcoming for European companies in China. However, in spite of such challenges, European firms still saw revenue growth and strong EBIT, all while further boosting their competitiveness. European commitment to the market remains high with a healthy majority reporting that China remains a top three destination for investment, in no small part as a result of the vibrant and innovative private sector.

Eager to improve the business environment in which they operate, European companies are redoubling their advocacy efforts. It is imperative that China accelerate its reform agenda and reduce the regulatory burden while providing a level playing field for all companies. This is especially important to achieve now, as the rise of macro-economic challenges like the global and Chinese slowdowns intersect with the consequences of the US-China Trade War. These burdens can be offset by creating an open, fair and well-regulated market that will attract further investment and give companies the room to navigate the challenging waters ahead.

Read English press release and Chinese press release.

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