BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/24
About 70 % of responding firms said they were in China to serve the domestic market. The largest concern by far for firms remained the slowdown in growth of China’s economy. The next biggest worries were rising production costs and slowing growth of the global economy. A large and still growing share of firms feel operationally challenged due to unpredictable regulatory shifts. Nearly 60 % of firms noted that tight Internet controls complicate their business. Notably, firms felt that China’s anti-corruption efforts were successful and the share of firms still seeing corruption as a significant problem has become smaller.
European industrial firms also suffer from China’s overcapacity problems. The capacity utilisation rates in most industrial branches have fallen and 45 % of the surveyed firms remarked on significant overcapacity problems in their field. The firms felt that market-driven change and a level playing field with Chinese SOEs were the best ways to deal with overcapacity problems.