Exclusive | China’s economic ‘crisis of confidence’ has shattered faith of foreign investors, warns European business head in call to action
- President of EU Chamber of Commerce in China discusses a potential cure to the malaise, but will it be a tough pill for Beijing to swallow?
- ‘From an FDI perspective, China is experiencing a perfect storm in which there are many factors now conspiring’ to suppress investor sentiment, Jens Eskelund says
Facing a “perfect storm” that has battered foreign investors’ confidence in the world’s second-largest economy, Beijing can still weather the downturn if it takes decisive action, according to the new head of the European business association in China.
To restore that lost confidence, the Chinese government must foster much greater certainty in its business environment, said Jens Eskelund, who was elected on May 24 as president of the European Union Chamber of Commerce.
And he said that steps toward that goal should include increasing information transparency and data reliability, as well as reducing policy ambiguity and removing unfair market restrictions to foreign business.
Short of such strong, concrete actions, Eskelund warned that while EU businesses are still interested in China’s huge market, they would remain reluctant to bet on its sputtering economy, which has become a matter of global concern.
“What we see now in the economy is a crisis of confidence,” Eskelund said, adding that “insecurity about what the future would hold” has weakened business sentiment while weighing on the outlook for foreign-direct-investment (FDI) inflows in geopolitically onerous times.
