This episode contains segments on:

• the government work report 2024 on foreign investment;
• the purchasing managers’ index in February;
• EU-China trade in goods in 2023;
• the mobile payment limits for foreign visitors.

From the Chamber’s side, on 4^th March, President Jens Eskelund met with Dutch Minister Geoffrey van Leeuwen for Foreign Trade and Development Cooperation.

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Read more:

Government work report 2024

https://npcobserver.com/wp-content/uploads/2024/03/2024-Government-Work-Report_EN.pdf

China official PMI, February

https://www.stats.gov.cn/sj/zxfb/202403/t20240301_1947971.html

EU-China trade in goods in 2023

https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20240304-2

Mobile payment limits for foreign visitors to be raised

https://english.www.gov.cn/news/202403/02/content_WS65e26742c6d0868f4e8e4881.html

Transcript:

RUI: Hello and welcome to China ShortCuts,

MARIANN: the European Chamber’s weekly catchup on China’s business landscape.

(MUSIC)

RUI: At the annual meeting of the National People’s Congress, China set the target for economic growth in 2024 at around 5 per cent and pledged to ensure both a predictable policy environment and national treatment for foreign-invested enterprises.

MARIANN: In his speech introducing the annual government work report, Chinese Premier Li Qiang said that China would open more sectors for foreign investment. One way he noted this would be done is by further reducing the negative list for foreign investment; another is by easing market access restrictions in more sectors – the Premier here cited the medical and telecommunications industries as examples. He vowed that issues related to cross-border data transfers and public procurement would also be addressed. In addition, policymakers are expected to take steps to resolve liveability challenges for foreign nationals working or studying in China.

Premier Li also acknowledged difficulties with China’s economic recovery, and highlighted areas where efforts should be made to support growth. These include addressing local government debt and expanding domestic consumption. The European Chamber will continue to work with Chinese stakeholders and offer constructive recommendations on where concrete steps are needed to turn these pledges into the kind of actions that can improve business confidence among foreign companies. 

(MUSIC)

RUI: Manufacturing activity in China dipped slightly lower in February compared to the previous month, while services activity expanded at a faster pace.

MARIANN: The official manufacturing purchasing managers’ index, or PMI, indicated contraction for the fifth consecutive month. The subindex for production sank below the 50-point benchmark separating growth from contraction for the first time in nine months, as demand remained weak. The fall in new export orders accelerated from the previous month.

Meanwhile, the non-manufacturing PMI, which reflects activity in the services and construction industries, showed the fastest pace of growth since last September. This was attributable to an uptick in services activity, with growth in construction activity slowing compared to the previous month.

(MUSIC)

RUI: According to data released by Eurostat on 4^th March, the EU’s deficit with China in trade in goods fell 27 per cent year-on-year in 2023. A Euractiv article noted that imports from China fell 18 per cent while exports fell three per cent.

MARIANN: Despite the decrease in the deficit, which was a substantial 106 billion euros, the EU’s 2023 trade deficit with China was still the second highest since 2013. On the list of the most imported goods from China, telecommunications equipment, electrical machinery and apparatus and automatic data processing machines occupied the top 3 spots. It is also notable that the EU imported 3.5 billion euro’s worth of Chinese cars  in 2023, a 36.7 per cent year-on-year increase.

According to Alicia García-Herrero, a senior fellow at Brussels-based think-tank Bruegel, who was cited in the Euractiv article, the EU’s decrease in exports is mainly due to China’s successful implementation of import-substitution measures, aimed at reducing its strategic dependence on the West.  

(MUSIC)

RUI: China’s central bank said it would instruct mobile payment platforms to raise the caps on transactions made by foreign visitors.

MARIANN: Currently, the single mobile transaction limit for foreign visitors is set at 1,000 US dollars, while the annual mobile payment limit is 10,000 US dollars. These caps would be raised to 5,000 and 50,000 US dollars respectively, which are the limits set for domestic users. The central bank also vowed to make certain processes related to mobile payments, such as identity verification and card binding, easier for foreign users.

The European Chamber has been vocal about the inconveniences faced by overseas visitors travelling in China, and is pleased to see that the authorities are taking steps to address some of these issues. While China’s digitalisation of services and usage of mobile apps have greatly eased life for residents, many popular and essential apps do not support foreign credit/debit cards, or have English versions (or the English is not properly translated). Many processes—even things as simple as buying a metro ticket from a machine—cannot be completed using a passport as they require a Chinese resident ID card. The Chamber encourages the Chinese Government to ensure that all its systems, websites and platforms are available in English, and that foreigners can always use their passports in place of a Chinese resident ID card.

(MUSIC)

RUI: On 4^th March, President Jens Eskelund and General Manager of the Shanghai Chapter Steven Basart, met with Geoffrey van Leeuwen, Minister for Foreign Trade and Development Cooperation of the Kingdom of the Netherlands.

MARIANN: President Eskelund provided an overview of the business environment in China as well as the key challenges facing European companies doing business in the country. He noted the importance of finding a balanced EU-China relationship, and also introduced the European Chamber’s upcoming report on de-risking.

RUI: Minister van Leeuwen debriefed the European Chamber on the priorities for Netherlands-China relations and gave his views on the impact of geopolitics on industry.

(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.