China’s “inflexible” and “inconsistent” “zero COVID-19” policy is crippling European business operations in the country, a major business lobby said yesterday, adding that the presence of the companies “can no longer be taken for granted.”
The report by the EU’s Chamber of Commerce in China marks the latest statement by the foreign business community that Beijing’s virus curbs are harming the world’s second-largest economy and isolating it on the international stage.
China is the last major economy wedded to a strategy of stamping out emerging virus outbreaks as they arise, through a combination of snap lockdowns, mass testing and lengthy quarantines.
Despite sparking business closures and roiling global supply chains, Chinese President Xi Jinping (習近平) has declared the approach China’s most “economic and effective” path forward and officials have not indicated when the rules might be eased.
The European Chamber — a group of more than 1,800 European companies in China — said in a position paper that “zero COVID-19” and its “massive uncertainty” had had a “negative impact” on 75 percent of its members’ operations.
“China’s business environment will remain unpredictable as long as the threat of lockdowns exists,” the group said, calling Xi’s flagship policy “inflexible and inconsistently implemented,” and cautioning that ideology seemed to be “trumping the economy.”
This has prompted nearly one-quarter of firms to consider shifting current or planned investments out of China, the highest percentage in the past decade, it added.
Despite China’s significant growth potential, “the extent of European firms’ engagement can no longer be taken for granted,” it said.
China in June reduced the length of mandatory quarantine for inbound travelers from 21 to 10 days, but a lack of flights and sky-high ticket prices remain a major obstacle to travel.
The near-total shutdown of the country’s borders since 2020 has quickened an “exodus” of European nationals and left those who remain more isolated than before, the report said.
If Beijing continues to persist with the policy, “the business environment will continue to become more challenging,” it said.
In a foreword to the report, European Chamber president Joerg Wuttke wrote that “the rest of the world has largely resumed pre-pandemic levels of ‘normality,’ but China remains reluctant to open its doors.”
European companies “need China to fulfill its huge economic potential,” he added.
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
RESPONSE: The Japanese Ministry of Finance might have to intervene in the currency markets should the yen keep weakening toward the 160 level against the US dollar Japan’s chief currency official yesterday sent a warning on recent foreign exchange moves, after the yen weakened against the US dollar following Friday last week’s Bank of Japan (BOJ) decision. “We’re seeing one-directional, sudden moves especially after last week’s monetary policy meeting, so I’m deeply concerned,” Japanese Vice Finance Minister for International Affairs Atsushi Mimura told reporters. “We’d like to take appropriate responses against excessive moves.” The central bank on Friday raised its benchmark interest rate to the highest in 30 years, but Bank of Japan Governor Kazuo Ueda chose to keep his options open rather than bolster the yen,
Global server shipments are expected to surge to 15 million units next year, from 4 million units this year, with artificial intelligence (AI) servers accounting for about 30 percent, driven by massive capital spending by major cloud service providers, the Market Intelligence and Consulting Institute (MIC) said on Thursday last week. Major cloud service providers — including Google’s parent company Alphabet Inc, Microsoft Corp, Amazon.com Inc and Meta Platforms Inc — are projected to budget US$450 million for capital expenditure next year, up from US$400 million this year, MIC ICT [information and communications technology] Industry Research Center director Edward Lin
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
RSS