European companies active in China fear new dangers for their business activities despite the recent breakthrough on an investment deal between Beijing and Brussels, according to a report published on Thursday.
Many worry that China and other major powers are drifting further apart, which could disrupt the flow of global trade, according to the report by the European Union Chamber of Commerce in Beijing and the China Institute Merics in Berlin.
The authors wrote that, even under incoming US President Joe Biden, the relationship between China and the United States is likely to remain tense.
Increasingly, China is working to make its economy more independent from the West, they said.
While the Biden administration is expected to be less aggressive than the current one, it is still likely to see China as a strategic competitor – meaning globalization is unlikely to continue as normal.
What the authors describe as “decoupling” is a trend that affects more than supply chains. China increasingly is branching out alone in terms of data, digital technology and industrial standards.
European companies active in China are aware of Beijing’s decoupling and call it “complicated and burdensome” as they seek to profit from China’s growth following the pandemic.
Late last year, China and the European Union agreed in principle on an investment deal after seven years of negotiations.
The agreement aims to improve market access for European companies in China, fair competition and provide for new business opportunities.