‘Not possible’ to see exodus of manufacturing firms: EU chamber
The coronavirus pandemic is unlikely to produce an exodus out of the Chinese market, and replacing China in global supply chain is impossible to materialize, a European business representative told the Global Times.
Most European companies in China are for the local market, which is still expected to grow extensively in the coming years and decades, said Joerg Wuttke, president of the European Union Chamber of Commerce
in China.
“The market is too important (for European companies) to leave,” he said.
The Chinese market has world-class industrial clusters, a strong mix of skilled, less skilled and highly professional labor force, and some of the best infrastructure in the world, Wuttke noted.
Commerce Minister Zhong Shan said on Monday that China has many edges: ample, high-quality labor, comprehensive industrial support and a market of 1.4 billion people.
Thanks to the quick recovery of many sectors of the economy following the COVID-19 crisis, multinational companies are seeing again the benefits of serving a strong Chinese market, with imported and locally produced products and services alike, said Denis Depoux, global managing director of consulting firm Roland Berger.
“This crisis will only accelerate the importance of China as a major outlet for many products in the consumer and business markets,” Depoux said.
Foreign capital is likely to be under the spotlight during this year’s two sessions, and the EU Commerce Chamber anticipates that there will be more talk about the magnitude of a fiscal stimulus during the two sessions to keep China’s economy moving forward.
Reforms to China’s healthcare system and food safety laws seem likely in the aftermath of the COVID-19 outbreak, Wuttke said. “These are all of significance to European companies in China that are eager to participate in reform and economic recovery.”
European healthcare, agriculture, food and beverage businesses are experienced to make sure that these practices can be part of the reform agenda, he noted.
Beyond stimulus, major reforms to the business climate are needed to create conditions for the private sector to recover, according to Wuttke.