Companies feel the negative impacts of the EU strategy, but faith in the market prevails.
De-risking instead of de-coupling, or less risk, but no disengagement from China. That was U.S. President Biden’s statement at the United Nations in September. Similarly, the European Union’s High Representative Josep Borell argued that dependence on a single country “reduces Europe’s strategic options” and threatens national economies and EU citizens. Despite these directives, China remains an important trading partner for the U.S. and the EU. The EU currently depends on imports of critical minerals, especially from the People’s Republic.
Amidst these efforts, Chinese companies operating in the EU reportedly remain confident in the market and argue that opportunities outweigh the challenges, according to the news agency Reuters, citing a survey conducted by consultants Roland Berger for the China Chamber of Commerce to the EU (CCCEU). The consulting firm inquired about 180 Chinese businesses operating in the EU, including big names like electric vehicle maker BYD and smartphone producer Huawei, and discovered that over 60 percent of respondents felt negatively impacted by the EU’s de-risking strategy. Measures such as the proposed Critical Raw Materials Act (CRMA) from the EU aimed at reducing current import dependencies weigh on Chinese companies. The CCCEU added in a statement that the sentiment slipped to a 4-year low and advocated for increased collaboration between the EU and China. However, the chamber also noted that over 80 percent of respondents in the study expressed positive views about their future within the EU market and would plan to expand their operations there. Members from digital and green fields were especially positive, with over 90 percent responding forward-looking. The report also showed that the EU and China are each other’s second-largest trading partners, and bilateral trade was still growing.
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