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.
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European Chamber meeting with European Commission President Von der Leyen
Official March PMI (in Chinese)
Support for foreign trade, youth employment
European Chamber report launch – China’s Innovation Ecosystem: the localisation dilemma
RUI: Hello and welcome to China Shortcuts,
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.
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.
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.
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.