Recovery room

Enhanced communication with Chinese companies could help the EU economy bounce back from the effects of the pandemic

The novel coronavirus pandemic has disrupted economic activities around the world, including those of Chinese businesses in the European Union.

During their recent telephone diplomacy, President Xi Jinping and European leaders agreed on the need to safeguard the stability of the industry chains and supply chains between China and EU member states. Apart from joint coordination in the fight against the spread of the virus, they agreed to roll out a long-prepared political agenda, including a scheduled summit between President Xi and European leaders in Germany this summer, after the pandemic is brought under control.

The political consensus reached at this challenging time has boosted the confidence of Chinese businesses in the European market. In this sense, after the rising protectionism in Europe last year, from the perspective of these businesses, the general relationship between China and the EU, is improving.

This has been strengthened by the mutual understanding and support displayed by China and European countries. When China was hit by the epidemic, its European partners raced against time, donating masks and other medical supplies worth at least 3 million euros ($3.2 million) to China. And the Chinese government, as well as Chinese businesses have assumed an active role in mobilizing resources and coordinating assistance for European countries as they now wage their own battles against the virus.

In recent weeks, as the situation has worsened in Europe, the China Chamber of Commerce to the EU (CCCEU) has been actively coordinating efforts with suppliers for much-needed medical equipment and supplies. So far, its members have mobilized medical supplies valued at 6 million euros.

When the donation was distributed to frontline hospitals in Italy, former Italian prime minister Romano Prodi welcomed it as a sign of friendship and solidarity. "We will never forget," Prodi wrote in a letter to the CCCEU. "I do hope that the world understands that we are really in the same boat."

China and Europe must continue to show this mutually caring spirit in the face of the mounting difficulties, unexpected disruptions and rising uncertainties that are changing what was an already challenging business environment.

The findings of a survey the CCCEU conducted in March can be used as a reference for European leaders when crafting more business-friendly policies: more than 60 percent of Chinese companies operating in the EU feel affected by the pandemic and more than 50 percent are struggling with their business operations in Europe.

In 2019, six out of 10 reported zero growth in revenues year-on-year. The European market is not an easy one and there are many "glass ceilings and walls".

As more Western countries turn to lockdowns to curb the spread of the virus, a supply shock to the global economy is expected. Global supply chains will suffer from the disruption caused by the absence of workers from the workplace, accompanied by lower consumer demand and the negative impact of uncertainty on investment plans.

The presence of Chinese businesses has become increasingly prominent in the EU. At the end of 2019, the stock of China's direct investment in the EU exceeded $100 billion, over 130 times the figure in 2005. Last year, when Premier Li Keqiang attended the China-EU leaders meeting in Brussels, he inaugurated the CCCEU on April 8. Setting up a new China-EU business platform sends a clear message: The huge potential of the two markets with a combined 1.9 billion consumers needs greater efforts to tap the full potential, which Chinese businesses are committed to making.

The CCCEU now has 61 members and includes business associations in most EU member states, covering up to 1,000 Chinese enterprises which have invested in the continent.

Chinese businesses have been following the policy evolution of the European Commission under President Ursula von der Leyen, who took office in December. They generally welcome the policy package aimed at a green and digital transformation of the European economy.

Chinese companies remain positive about the future and are strongly committed to Europe as their business destination: More than 60 percent plan to increase their overall investment in 2020.

With EU institutions drafting their timetable and roadmap to recover from the pandemic, the months ahead will require strong and timely action to improve the business environment on the continent.

As sChinese companies are an important part of the EU business environment, communication with Chinese companies should be enhanced so that they can increase their investment in the EU: Fighting the novel coronavirus crisis does not exclude seeking opportunities with long-term partners.

The troubled times we are living will not end overnight. Only with unity and a shared sense of responsibility can we win this fight.

The author is the chairperson of the China Chamber of Commerce to the EU. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.