European companies are growing more
pessimistic as China's economy slows,
a European business lobby said yesterday
,with many firms preparing for lay-offs
in the face of weaker growth and slow
market reforms,
China is targeting seven per cent annual
growth this year,which would be the lowest
in a quarter century though many economists
doubt the government can keep that up for
the next five years
The European Union Chamber of Commerce
in China said its annual survey of members
showed 39 percent of 541 respondents were
planning to cut costs, a figure that rose from
around 24 percent last year.
Pessimism about growth and profitability has
forced European business to cut back significantly
particularly through headcount reduction "
the chamber said.
Fifty eight per cent of European companies were
still optimistic about growth prospects in China
though the number represents a 10 percentage
point decline over the 2014 survey Companies
planning to expand their China business has
dropped by 30 percentage points since 2013
to 50 percent from 85 percent.
The chamber said disappointment is palpable
with a perceived lack of progress on China
market reforms which would potentially
unlock opportunities for the foreign business
community in many state dominated industries .
A raft of pending laws including rules on national
security contain language that some investors
fear would discriminate against foreign firms,
impinge upon investment treaty talks or dilute
eventual agreements.
The chamber also said China needs to better
protect trade secrets and fairly enforce business
rues.China's leadership says it is making it a
priority to cut red tape and clarify business rules
both perennial issues with most foreign businesses
REUTERS/AP
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