This episode contains segments on:
- State Council’s Action Plan for Stabilising Foreign Investment
- Actual use of foreign direct investment in China in January 2025
- The Council of the EU adopts 16th sanction package on Russia’s war against Ukraine
- Financial Times report on China’s spending on individual consumption
Listeners are also invited to join the event The German Election—Which Way Forward For EU-China Relations? on 27th February online or in Beijing.
Contact:
We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.
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Read more:
State Council’s Action Plan for Stabilising Foreign Investment
https://www.gov.cn/zhengce/content/202502/content_7004409.htm
Actual use of FDI in China in January 2025
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2025/art_9e9953406cf64360902e91a28f7967f9.html
European Council adopts 16th sanction package on Russia’s war against Ukraine
https://www.mofcom.gov.cn/xwfb/xwfyrth/art/2025/art_2fce4abe2f064db897ed388c15ca1d0d.html
Financial Times report on China’s spending on individual consumption
https://www.ft.com/content/75f97747-53f4-4447-8c14-8a078bdc8750
European Chamber event: The German Election—Which Way Forward For EU-China Relations?
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 26th February 2025.
(MUSIC)
RUI: On 19th February, the State Council issued an action plan comprising twenty points aimed at stabilising foreign investment.
MARIANN: The plan is seen as a continuation of recent Chinese Government pledges to improve the business environment for foreign investment. Key points include expanding pilot projects in areas such as telecommunications, healthcare and education, promoting the orderly opening up of the biomedical field and abolishing restrictions on the use of domestic loans by foreign-invested companies.
It is a notable positive that the document includes a point on the need to define what qualifies as a ‘domestic product’ for public procurement and reinforces the principle of providing equal access to public procurement for foreign firms that manufacture their goods in China. If fully implemented, this could benefit those foreign companies that have made considerable investments to localise their production in China – many of whom have done so in order to meet ‘Made in China’ requirements. However, it also suggests that imports will not qualify for public procurement, which in turn could contribute to a further increase of trade imbalances with China’s key partners.
RUI: The Action Plan calls on the relevant authorities to effectively implement the listed points in 2025. The Chamber therefore looks forward to the release of supporting measures and timelines for implementation and will continue its efforts to advocate for tangible benefits for our members.
(MUSIC)
RUI: According to data published by China’s Ministry of Commerce on 19th February, in the first month of 2025 the actual use of foreign direct investment in China surpassed 97 billion yuan.
MARIANN: This was a drop of 13.4 per cent compared to the same period last year. However, the rate of decrease was the lowest recorded in twelve months. The month-on-month figure showed an uptick of 27.5 per cent, indicating a surge in FDI utilisation in January.
(MUSIC)
RUI: On 24th February, the Council of the EU adopted its 16th package of sanctions against Russia, which included several Chinese firms and individuals identified by the Council as “responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine”.
MARIANN: The Council’s official press release mentioned one Chinese company specialised in the production of satellite imagery which it decided to sanction along with its chairman. A day later, China’s Ministry of Commerce warned that the EU’s decision to include Chinese entities in its latest round of sanctions would have a negative impact on the bilateral trade relationship.
(MUSIC)
RUI: In a report published on 23rd February, the Financial Times provided an analysis of China’s government spending on citizens, concluding that relatively low expenditure to support consumption could undermine growth efforts.
MARIANN: The analysis, which was based on World Bank data showed that China spends about 6 per cent of its GDP on individual consumption, which includes services such as healthcare that directly benefit citizens. In this regard, it lags behind the majority of Brics members, including Brazil and Russia. The report cited economists saying that even countries that spent about the same as China or even somewhat less on individuals had much higher private consumption levels than China. It explained this discrepancy with structural and cultural differences which in China lead to a higher than average level of cautiousness when it comes to spending.
(MUSIC)
RUI: The collapse of Germany’s ruling coalition and a subsequent vote of no confidence in Chancellor Scholz’s government paved the way for snap elections on 23rd February. Growing political and economic uncertainty in Germany has left many voters concerned about the country’s future.
MARIANN: As Germany is the largest economy in Europe, the German election was closely followed by the international community. Its result has the potential to redraw the contours of the country’s political landscape and impact the EU’s policies and internal power dynamics, as well as EU-China relations.
RUI: Join us on 27th February for fresh insights from industry and policy experts on questions about Germany’s foreign policy outlook, the new administration’s potential impact on German industry, EU policy and EU-China relations.
(MUSIC)
MARIANN: Thanks for listening, and don’t forget to tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.