Beijing, 8th June 2021 – The European Union Chamber of Commerce in China, in cooperation with Roland Berger, today released its European Business in China Business Confidence Survey 2021 (BCS). The annual survey was completed by 585 European Chamber member companies, answering questions about 2020 performance, as well as future outlooks.
2021年6月8日，北京 – 中国欧盟商会携手罗兰贝格管理咨询公司于今日发布《商业信心调查2021》。该项年度调查由585家欧盟商会会员公司完成，就在华欧盟企业2020年业绩以及未来前景等相关问题作答。
Prospects, last year, seemed quite gloomy: an early 2020 survey, conducted jointly by the European Chamber and the German Chamber of Commerce in China, found that half of the respondents expected 2020 revenue to drop year-on-year (y-o-y), and a mere 0.5% anticipated revenue growth. In fact, only a quarter of respondents to the BCS 2021 reported revenue declines and 42% experienced growth. The strong performance was indicated in other areas as well:
- Three out of four respondents turned a profit in 2020, the same proportion as the last five years, demonstrating that even in challenging times, European companies adapted and found success.
- 68% are optimistic about future growth, a significant 20 percentage point increase y-o-y.
- Commitment to the China market remains strong – a mere 9% of respondents are considering shifting any current or planned investment out of China, the lowest share on record.
Yet, as geopolitical tensions grow, companies are looking for ways to decrease their exposure, particularly to possible cross-border disruptions resulting from either the trade war or the ongoing technological divergence between China and the west.
- Only 21% of manufacturers reported that they do not import critical components. Meanwhile, a third import components or equipment for which there are no viable alternatives. The rest can find other solutions, but at higher costs, lower quality and/or with compatibility issues.
- In response, over a quarter of manufacturers are onshoring at least some of their supply chains, five times as many as are offshoring.
- European companies in joint ventures with local partners are strengthening their positions, with 27% increasing their shares, and two thirds are taking full ownership or a controlling share.
Meanwhile, as China’s reform agenda continues to lag, and external risks surge, it is imperative that reform efforts accelerate and long-standing regulatory challenges are resolved to offset emerging ones.
- Market access barriers are reported by 45% of members, a marginal increase from the 44% that felt the same in 2020.
- Unequal treatment persists for 47% of respondents.
- SOE reform appears to have stalled, with only 15% of respondents expecting the private sector to gain opportunities at the expense of the state-owned sector, and 48% expecting the opposite.
- Compelled technology transfers persisted for 16% of respondents, the same as 2020 despite the Foreign Investment Law coming into force.
- A third of respondents have been negatively impacted by the new regulatory requirements related to “critical information infrastructure” and “autonomous and controllable technology”.
“Our members’ long-term commitment to the China market paid dividends in 2020, but geopolitical tensions are forcing us to reconsider our strategies here,” said Charlotte Roule, Board Member of the European Chamber. “European companies are not decoupling by leaving China, but instead are considering which cross-border ties between China operations and global ones can and must be cut.”
“European companies both contributed to and benefitted from China’s strong and speedy economic recovery,” said Denis Depoux, Global Managing Director of Roland Berger. “If given the right opportunities, they are ready to deepen their positions here, and have a wealth of technology and expertise to drive not only growth but also help with China’s decarbonization goals and its industrial upgrade.”