COVID Recovery: European Companies Plan On Investing In China

The coronavirus pandemic brought businesses and markets to their knees, and markets have begun to show signs of recovery as the pandemic continues to ease up.

According to a survey released on Tuesday by the European Chamber of Commerce, almost 60 percent of companies and businesses in Europe are putting plans of expanding in China in place. These companies plan on expanding their operations this year. According to the same survey, more than half of the respondents reported higher profit margins in China which was also higher than their global average.

This survey shows that European businesses are moving their supply chains and increasing their investments in China, and this is due to the country’s quick recovery from the pandemic last year. The company’s quick recovery from the pandemic has made it a critical source to turn to for growths and profits.

“The resilience of China’s market provided much-needed shelter for European companies amidst the storm of the Covid-19 pandemic”, the survey read. China was able to quickly contain the virus which led to a successful reopening of the country’s economy last year. This has placed the country in a spot where it provides shelter from the deluge-like effects of the pandemic. European companies like French Luxury giant LVMH SE and Germany’s BMW AG have found a lifeline in China.

A total of 73 percent of the survey respondents reported a profit last year, with another 14 percent breaking even. That was about the same level as in previous years despite the pandemic, showing how quickly the domestic market bounced back, Bloomberg’s report read. Some 68 percent of the survey respondent were optimistic about the business outlook in their sector over the next two years, up from 48 percent last year, the report also mentioned.

Even though China is quite a difficult political environment for these European countries, they continue to make expansion plans because of the benefits and huge profits they stand to gain.

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