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Straits Times
3 days ago
- Automotive
- Straits Times
Doing business in China is getting harder, but its exports are hard to resist
A worker at an electric vehicle assembly line in Chongqing, China. The EU has imposed tariffs lately in response to China's soaring exports of manufactured goods. PHOTO: EPA-EFE Doing business in China is getting harder, but its exports are hard to resist – European companies, many of which have operated in China for decades, are finding it increasingly difficult to do business in the country, another sign of how China's weak domestic economy and opaque regulations are testing even longstanding multinational business ties. European carmakers have been rapidly losing market share and face many political difficulties. Volkswagen agreed last December to sell its factory in north-western China's Xinjiang region, where Beijing has repressed Muslim ethnic groups. European pharmaceutical and medical imaging equipment companies have found themselves locked out of much of the state-run health system. An extensive annual survey of businesses released May 28 by the European Chamber of Commerce in China found that nearly three-quarters said it was getting harder to operate in China. It was the fourth consecutive year that the survey showed deepening corporate pessimism. The proportion of European companies that plan to expand their operations in China has also fallen to a record low, with just 38 per cent saying that they intend to do so this year. European investment has been important in bringing Western technology to China and in bringing Chinese products to world markets. The chamber, which has been gauging challenges companies face in China for a quarter century, represents the interests of some 1,700 companies, from industrial giants like VW to small businesses with a handful of employees who are cogs in global supply chains. The chamber's survey also unearthed a somewhat contradictory trend that could prove troublesome for US President Donald Trump's attempt to shield American manufacturing from China's exports with tariffs. Even as European businesses curb their own investments in China, some are also buying ever more components from Chinese companies. That makes their supply chains even more dependent on China. China has retaliated against Mr Trump's tariffs by imposing its own tariffs on US goods. That has prompted a hunt by European companies in China for Chinese replacements for the few components they were still buying from the United States, said Mr Jens Eskelund, the chamber's president. A broad fall in prices in China has made Chinese components too good a deal for many European companies to pass up. A recent weakening of China's currency against the euro has made Chinese components even more attractive. 'The one place where they actually get better components at a lower price than anywhere else in the world is here in China,' Mr Eskelund said. Not only the US, but the European Union and other countries have imposed tariffs lately in response to China's soaring exports of manufactured goods and tepid demand for imports. European companies that export from China to other markets had long feared possible trade barriers, but some were still caught off guard. 'That fear has turned into a nightmare for many at the moment,' said Mr Klaus Zenkel, a businessman in Shenzhen who is a member of the chamber's South China chapter. Some companies have set up temporary assembly operations in other countries to bypass US tariffs, Mr Zenkel said. They rent warehouses in places like Taiwan, do the final assembly of Chinese components in the warehouses and then ship the finished goods to the US with Customs declarations that no longer show the goods as coming from China. The Trump administration is trying to reduce these indirect shipments from China. Mr Trump has threatened high tariffs against countries that run large trade surpluses with the US. One category of business conditions has improved very markedly in China in the past year, according to the European chamber's survey. The share of European companies worried about rising wages has fallen steeply over the past several years, and these now rank among the least of their concerns. Labour costs had been rising along with China's surging housing prices. But that bubble burst in 2021, causing declines in construction that eliminated many jobs. In turn, flat or even falling wages have contributed to weak demand in China for everything from imported cosmetics to hotel rooms – resulting in broadly low prices, a potentially dangerous phenomenon known as deflation. 'By a wide margin, it is China's economic slowdown that is seen as having the greatest impact,' Mr Eskelund said. NYTIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
6 days ago
- Business
- Yahoo
China Blinks? Rare Earth Lifeline May Be Coming for Tesla and Europe's Chipmakers
China might be loosening its grip on rare earth exports, just weeks after throwing a wrench into global supply chains with sweeping new licensing rules. Following pressure from semiconductor firms in both China and Europe, Beijing held a closed-door meeting this week to hear out mounting frustrations. The outcome? State media is now floating the possibility that companies critical to the chip industry could get a faster lane through export controlsthough no formal pivot has been announced yet. Back in April, China added seven rare earths and related products to its export control list, forcing all exporters to apply for licensesno matter where the goods were headed or who the buyer was. A few approvals have trickled through since then, mostly for rare earth magnets used in EVs, chips, and defense. But the process has proven slow and confusing, with some applications stuck in customs for months. The European Chamber of Commerce says the delays could soon bring parts of the continent's high-tech manufacturing to a grinding halt. That's why this potential easing matters. Tesla (NASDAQ:TSLA), for instance, relies heavily on rare earths for its electric drivetrainsand so do European fabs trying to meet production targets. Jens Esklund, who leads the EU Chamber in China, didn't mince words: without faster approvals, many European production lines will come to a halt. If Beijing follows through, it could offer much-needed breathing room for chipmakers and automakers alike. Investors will be watching closelynot just for policy changes, but for clues about how China plans to balance control with commerce. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
6 days ago
- Business
- Yahoo
China Blinks? Rare Earth Lifeline May Be Coming for Tesla and Europe's Chipmakers
China might be loosening its grip on rare earth exports, just weeks after throwing a wrench into global supply chains with sweeping new licensing rules. Following pressure from semiconductor firms in both China and Europe, Beijing held a closed-door meeting this week to hear out mounting frustrations. The outcome? State media is now floating the possibility that companies critical to the chip industry could get a faster lane through export controlsthough no formal pivot has been announced yet. Back in April, China added seven rare earths and related products to its export control list, forcing all exporters to apply for licensesno matter where the goods were headed or who the buyer was. A few approvals have trickled through since then, mostly for rare earth magnets used in EVs, chips, and defense. But the process has proven slow and confusing, with some applications stuck in customs for months. The European Chamber of Commerce says the delays could soon bring parts of the continent's high-tech manufacturing to a grinding halt. That's why this potential easing matters. Tesla (NASDAQ:TSLA), for instance, relies heavily on rare earths for its electric drivetrainsand so do European fabs trying to meet production targets. Jens Esklund, who leads the EU Chamber in China, didn't mince words: without faster approvals, many European production lines will come to a halt. If Beijing follows through, it could offer much-needed breathing room for chipmakers and automakers alike. Investors will be watching closelynot just for policy changes, but for clues about how China plans to balance control with commerce. This article first appeared on GuruFocus.
Time of India
7 days ago
- Automotive
- Time of India
Doing business in China is getting harder, but its exports are hard to resist
European companies, many of which have operated in China for decades, are finding it increasingly difficult to do business in the country, another sign of how China's weak domestic economy and opaque regulations are testing even long-standing multinational business ties. European automakers have been rapidly losing market share and face many political difficulties. Volkswagen agreed last December to sell its factory in northwestern China's Xinjiang region, where Beijing has repressed Muslim ethnic groups. European pharmaceutical and medical imaging equipment companies have found themselves locked out of much of the state-run health system. An extensive annual survey of businesses released Wednesday by the European Chamber of Commerce in China found that nearly three-quarters said it was getting harder to operate in China. It was the fourth consecutive year that the survey showed deepening corporate pessimism. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Cara Membantu Orang Terkasih Menghadapi Limfoma Limfoma Pelajari Undo The proportion of European companies that plan to expand their operations in China has also fallen to a record low, with just 38% saying that they intend to do so this year. European investment has been important in bringing Western technology to China and in bringing Chinese products to world markets. The chamber, which has been gauging challenges companies face in China for a quarter century, represents the interests of some 1,700 companies, from industrial giants like VW to small businesses with a handful of employees who are cogs in global supply chains. Live Events The chamber's survey also unearthed a somewhat contradictory trend that could prove troublesome for President Donald Trump's attempt to shield American manufacturing from China's exports with tariffs. Even as European businesses curb their own investments in China, some are also buying ever more components from Chinese companies. That makes their supply chains even more dependent on China. China has retaliated against Trump's tariffs by imposing its own tariffs on U.S. goods. That has prompted a hunt by European companies in China for Chinese replacements for the few components they were still buying from the United States, said Jens Eskelund, the chamber's president. A broad fall in prices in China has made Chinese components too good a deal for many European companies to pass up. A recent weakening of China's currency against the euro has made Chinese components even more attractive. "The one place where they actually get better components at a lower price than anywhere else in the world is here in China , " Eskelund said. Not only the United States, but the European Union and other countries have imposed tariffs lately in response to China's soaring exports of manufactured goods and tepid demand for imports. European companies that export from China to other markets had long feared possible trade barriers, but some were still caught off guard. "That fear has turned into a nightmare for many at the moment," said Klaus Zenkel, a businessperson in Shenzhen who is a member of the chamber's South China chapter. Some companies have set up temporary assembly operations in other countries to bypass American tariffs, Zenkel said. They rent warehouses in places like Taiwan, do the final assembly of Chinese components in the warehouses and then ship the finished goods to the United States with customs declarations that no longer show the goods as coming from China. The Trump administration is trying to reduce these indirect shipments from China. Trump has threatened high tariffs against countries that run large trade surpluses with the United States. One category of business conditions has improved very markedly in China in the past year, according to the European chamber's survey. The share of European companies worried about rising wages has fallen steeply over the past several years, and these now rank among the least of their concerns. Labor costs had been rising along with China's surging housing prices. But that bubble burst in 2021, causing declines in construction that eliminated many jobs. In turn, flat or even falling wages have contributed to weak demand in China for everything from imported cosmetics to hotel rooms -- resulting in broadly low prices, a potentially dangerous phenomenon known as deflation. "By a wide margin, it is China's economic slowdown that is seen as having the greatest impact," Eskelund said. This article originally appeared in The New York Times.
RTHK
06-05-2025
- Business
- RTHK
HK 'can play bigger role in space industry'
HK 'can play bigger role in space industry' Regina Ip says Hong Kong can make more contributions to the country's space development. Photo: RTHK Executive Council convener Regina Ip said on Tuesday Hong Kong can play a more significant role in the country's space development and expressed hopes that commercial opportunities in the sector can be explored during an upcoming summit. Ip made the remarks during a media preview for this year's Global Prosperity Summit, scheduled for May 19 to 21. The summit, now in its second edition, will feature five major topics: artificial intelligence; climate change; trade war and hot wars; Hong Kong's bridging role in a changing world; and, for the first time, space development. Ip, who founded the inaugural summit last year, said there's room for Hong Kong to play a role in developing the space industry, particularly the commercial aspects. 'Hong Kong has always taken part in the nation's space programme," she said. "Our universities have contributed technologies, and we are sending experts to join the Chang'e programme. "So from the viewpoint of technology, we have always played a small but active part. 'We plan to discuss the commercial possibilities, particularly as the financial secretary has mentioned, in his budget speech, the developmental potential of low-orbit satellites.' The event also marks the first time the European Chamber of Commerce in Hong Kong has joined as a co-organiser. Local think tank Savantas Policy Institute, which Ip chairs, and the Shanghai Institutes for International Studies co-organised the first summit. Ip also insisted that US diplomats would continue to participate at the summit, including Kurt Tong and Hanscom Smith, former consuls general to Hong Kong and Macau. Another highlight of the summit, Ip said, will be a closed-door meeting on the final day, when experts from the United States, Europe and Beijing will discuss economic security and international trade. Ip has postponed a planned visit to the US, originally scheduled during Easter, saying that she felt the timing was not right and that she will not be travelling there this year.
