01/17/2025 Source: cnbayarea.org.cn
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Editor's Note:
In a year marked by rising protectionism and "decoupling" attempts in the world economic arena, what has become of China's allure as a favored investment destination? Foreign enterprises' bullish moves have told a lot about it. From January 2025, GDToday initiates a series of "Global Insights on 2025 Outlook@Business Trends", inviting representatives from foreign chambers of commerce and foreign companies in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) to share their outlook on 2025. Please stay tuned.
In 2024, Guangdong's annual foreign trade imports and exports exceeded RMB 9 trillion, with the European Union (EU) being one of its key cooperation partners. Data shows that in the first three quarters of last year, Guangdong's imports and exports with the EU grew positively, achieving a 5.5% increase.
Despite the challenges posed by a sluggish global economic recovery, frequent geopolitical risks, and the resurgence of trade protectionism, cooperation between Guangdong and EU enterprises has consistently progressed in a stable manner.
In Guangdong's Zhanjiang, the first phase of BASF's Verbund site was completed and commissioned in 2024, with plans to achieve a 100% renewable energy power supply by 2025.
During an exclusive interview with GDToday, Klaus Zenkel, Vice President of the European Union Chamber of Commerce in China and Chair of the South China Chapter, stated that Guangdong, as a major economic power in China, has attracted numerous European high-tech enterprises due to its technology-driven environment and comprehensive industrial chain.
2025 marks the 50th anniversary of the establishment of diplomatic relations between China and the EU. Looking ahead to the new year, Zenkel expressed his hope that EU enterprises can participate in the development of Guangdong's new economic growth engines such as medical industry and the low-altitude economy. "Keep communicating and we can achieve a lot together."
No intention of moving out of China
According to the Business Confidence Survey 2024 released by the European Chamber of Commerce in China, 61% of respondents believe that engaging in commercial trade in South China is generally easier, representing a 4% increase compared to the same period in 2023.
Zenkel highlighted the enduring presence of their member companies in Guangdong, saying that many of them have operated in the province for a decade or even longer. "They have no intention of moving out because the business environment here is good."
According to Zenkel, one of the factors contributing to this positive environment is the well-functioning supply chain. Additionally, the significant growth potential in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) has also fueled these companies' continued optimism about the local market.
"The GBA has the biggest land area, the largest population, and the highest GDP compared to other major bay areas in the world. Its per capita GDP is lower than that of other bay areas such as Tokyo or San Francisco, but this is precisely where people see the potential to grow," Zenkel explained.
Zenkel also emphasized GBA's infrastructure connectivity in recent years, which helps foster closer ties and collaboration among its cities. "They built a new bridge between Shenzhen and Zhongshan," he noted. "This has made it easier for the western part of the Pearl River Delta to connect with other regions."
"New buildings and parks are popping up everywhere in Shenzhen. The Hetao area is further linking Shenzhen with Hong Kong." Zenkel continued, "With all these factors, I think European companies will stay here in the future."
Better to solve trade disputes through dialogue instead of tariffs
When discussing the topic of the EU imposing tariffs on Chinese electric vehicles, Zenkel stated that, as a chamber of commerce, they prefer to recommend resolving trade disputes through dialogue rather than imposing tariffs or sanctions. "It will not help anybody. It will not help the EU because EU citizens need to pay a higher price."
Zenkel emphasized that leaders from both the EU and China should make more mutual visits and engage in more dialogue when addressing trade issues. "If you only sit in your office in Germany or in France and don't come to China to communicate, then you will not understand the real thing."
In recent years, China has gradually implemented a visa-free policy for most EU countries. Commenting on this initiative, Zenkel remarked that it will enable European governments, enterprises, and individuals to physically travel to China for direct conversations, thereby promoting increased cooperation opportunities.
"They want to do business with China. When we talk to them, they are all quite positive. Many of them are surprised about how modern, good, and dynamic everything is here. They had never expected that when they left Europe, because in Europe, there is a different picture of China in the news."
New wave to develop advanced products in Guangdong and go global
In Zenkel's view, the transition from prototype to manufacturing is fast in Guangdong, where there's a trend of developing cutting-edge products and then expanding them internationally from the province. This has made many European companies favor collaborating with the emerging industries here.
In 2024, China further opened up its healthcare sector by allowing the establishment of wholly foreign-owned hospitals in places such as Guangzhou and Shenzhen.
Zenkel believes that the healthcare sector in Guangdong is showing robust development momentum, nurturing numerous well-known enterprises that possess the foundation for cooperation with related businesses and hospitals in Europe. "European businesses don't need to form a joint venture anymore. I think many foreign hospitals will come."
The thriving low-altitude economy in Guangdong has also garnered considerable interest from European enterprises. Zenkel revealed that at least one related company from Europe has registered here in Shenzhen's Bao'an.
"Because they know that the area is technology-driven and that there is already an industrial foundation. The government is also promoting this industry. This means the regulations here should be better than in other countries."