This episode contains segments on:
- China’s GDP and macroeconomic data in 2024;
- Foreign direct investment in 2024;
- The EU’s report on International Procurement Instrument investigation into China’s public procurement for medical devices; and
- EU launches challenge against China at the WTO on royalties for EU high-tech sector;
The Chamber released Siloing and Diversification: One World, Two Systemsreport on 9th January, which is available to download from the Chamber’s official website.
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Read more:
China GDP and macro data for Q4 and 2024 (NBS)
https://www.stats.gov.cn/sj/zxfb/202501/t20250117_1958332.html
https://www.stats.gov.cn/sj/zxfb/202501/t20250117_1958331.html
China FDI 2024 (MOFCOM)
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_61cf09e39b644ca18e684a1d0f87d09a.html
EU report on IPI investigation into China’s public procurement for medical devices
https://ec.europa.eu/transparency/documents-register/detail?ref=COM(2025)5&lang=en
EU launches challenge against China at the WTO on royalties for EU high-tech sector
https://ec.europa.eu/commission/presscorner/detail/en/ip_25_293
European Chamber report: Siloing and Diversification: One World, Two Systems
https://www.europeanchamber.com.cn/en/publications-siloing-diversification
Transcript:
RUI: Hello and welcome to China ShortCuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: This episode was recorded on 22nd January 2025.
(MUSIC)
RUI: Official data published on 17th January indicate that China’s economic growth reached the target set during the March Annual Government Report in 2024. This surprised some given than low domestic demand and deflation have been key characteristics of China’s economy throughout the year.
MARIANN: According to the National Bureau of Statistics, China’s gross domestic product, or GDP, increased 5 per cent year-on-year in 2024, matching the official target of “around five per cent”. This has been attributed by some to a strong acceleration of growth in the final quarter, when China’s GDP reportedly increased 5.4 per cent compared to the same period a year prior, after a host of unprecedented support measures were rolled out from September onwards.
Macroeconomic data released along with the GDP figures shed further light on the imbalances in China’s economic performance. Production at larger industrial firms increased 6.2 per cent year-on-year in December, which was the fastest increase recorded in eight months. The annual growth in 2024 overall was 5.8 per cent. Meanwhile, growth in retail sales was off the pace by some margin, at 3.7 per cent in December, and 3.5 per cent for the whole of 2024.
A report released by Rhodium Group at the end of December 2024, had placed China’s GDP growth at around 2.4 to 2.8 per cent, based on a number of economic measures. The report notes that the area where Rhodium’s assessment deviates most from official data was in terms of “gross fixed capital formation”, with “differences in household consumption also important.”
(MUSIC)
RUI: Data released by China’s Ministry of Commerce on 17th January showed that in 2024, foreign direct investment, or FDI, into the country decreased more than 27 per cent compared to the previous year.
MARIANN: The total sum of utilised FDI in 2024 exceeded 800 billion yuan, a drop of more than a quarter of the 1.1 trillion yuan recorded in 2023. It is notable that despite the significant decrease in the actual use of FDI, the number of newly established, foreign-invested enterprises grew almost 10 per cent from the previous year, with over 59 thousand new entities registered in 2024.
(MUSIC)
RUI: On 14th January, the European Commission released a report on the first stage of its investigation into China’s public procurement market for medical devices, concluding that China’s practices are limiting EU companies’ access in an unfair and discriminatory way.
MARIANN: The investigation was launched in April under the EU’s International Procurement Instrument, a new regulatory tool aimed at promoting reciprocal access to international public procurement markets. A lack of fair access to procurement in China is a longstanding issue for European companies operating in the country. It has been a key advocacy topic for the European Chamber’s Healthcare Equipment Working Group since the launch of the China Manufacturing 2025 initiative in 2015, which included market share targets for domestic, high-end medical devices. It ranked as the third most significant regulatory challenge faced by Chamber members in the medical devices sector, according to the Business Confidence Survey 2024.
Under the EU’s rules, it now has a mandate to take action to limit or exclude Chinese companies’ access to the EU’s public procurement market, but official communication suggests that as a first step the Commission will prioritise dialogue with the Chinese side to find a solution.
(MUSIC)
RUI: On 20th January, the European Commission requested dispute settlement consultations at the World Trade Organization, accusing China of “unfair and illegal trade practices” in intellectual property protection.
MARIANN: According to the Commission’s complaint, by empowering its courts to set worldwide royalty rates for high-tech patents, China is pressuring European companies—especially those in the telecommunications sector—into lowering their rates globally, which in turn provides cheaper access to European technologies for Chinese manufacturers. China’s Ministry of Commerce expressed regret over the EU’s complaint and stated that China has been improving its legal framework for intellectual property rights protection in adherence with WTO rules. The two sides have 60 days to find a solution before the EU can request the WTO to set up a panel to rule on the matter.
(MUSIC)
RUI: On 9th January, the European Chamber published its new report Siloing and Diversification: One World, Two Systems, which highlights the high cost to both business and the economy as a result of companies being compelled to silo their operations in China.
MARIANN: Geopolitical and trade tensions, and China’s self-reliance policies, coupled with growing domestic and global regulatory risks, are leading many multinational companies to separate certain China-based functions, or even entire operations, from those in the rest of the world. This is a considerable trade-off: siloing gives rise to an increase of both overall costs and global compliance risks, as well as the need to have duplicate operations and production, ultimately resulting in inefficiency, reduced innovation capacity and a loss of international competitiveness.
RUI: Download the report for free from the Chamber’s website to find out what kind of risks siloing trends are posing to businesses and China’s economy.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again after the Chinese New Year holiday.
RUI: In the meantime, please find useful links in the episode notes.