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Outlook for business and investments in China

The ECCT hosted a webinar featuring Jörg Wuttke, President emeritus of the European Union Chamber of Commerce in China (EUCCC). In the webinar Wuttke gave his views on the current status and outlook for European businesses in China and answered questions from participants.

In his remarks, among other issues, he spoke about the status of the economy, including the real estate sector, local banks and the debt of local governments, supply chain derisking and resilience building, FDI movements and the EUCCC’s position papers.

The real estate sector is struggling from a surplus of finished apartments, unfinished apartments and cash-strapped developers, which is placing a drag on economic growth. In addition, a number of industry segments face excess capacity, which is decreasing profitability and, since many of these products are being exported, it is increasing China’s trade surplus with major trading partners like the EU. It is hoped that stimulus measures will help to boost the economy in the second half of the year. While the situation has prompted some firms to leave, those involved in key manufacturing sectors, such as cars, chemicals and machine building are remaining in China.