EU firms ‘get another wake-up call’ about China and call for it to reform, as coronavirus hits profits

Profits down 20 per cent for almost half of European businesses operating in China, according to survey

Companies call for level playing field and end to ‘patchwork of conflicting rules’, as well as financial relief measures following outbreak

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A near-empty shopping area in Beijing typifies the economic impact of the coronavirus. Photo: EPA-EFE

Published: 3:33pm, 27 Feb 2020Updated: 12:08am, 28 Feb 2020

Nearly half of the European businesses operating in China expect a drop in revenue of more than 20 per cent because of the coronavirus outbreak, and see it as another wake-up call to rely less on China after its trade war with the US, a survey suggests.

The outbreak has hit foreign businesses severely, disrupting manufacturing and threatening to alter investment sentiment on China in the long run, according to a joint survey by the German Chamber of Commerce in China and the European Union Chamber of Commerce in China.

Respondents to the survey called for “proportionate measures” to get the flow of goods and services back on track, with the survey report saying “a return to stability is urgently demanded, and support measures should be rolled out immediately”.

As a result of the disruption, nearly half of the European firms taking part in the survey expected revenue for the first half of 2020 to drop by more than 20 per cent, and planned to lower their targets for the whole year.

Polling 600 European companies operating in China in industrial sectors including machinery, auto, electronics, chemicals and services, the survey found that the impacts of the outbreak and the Chinese government’s control measures were “comprehensive and severe”, and that long-term sentiment “would never be the same again”.