CCCEU Statement of EC unveiling "European Economic Security Package"

Brussels, Belgium

On January 24, 2024, the European Commission (EC) presented the "European Economic Security Package (EESP)" in Brussels, featuring revisions of the EU's foreign direct investment (FDI) screening mechanism and addressing aspects of the bloc's outbound investment, export control, research security, and dual use research.

China Chamber of Commerce to the EU (CCCEU) closely monitors the ongoing development of the EU's economic security strategy and expresses concerns about the impact of the EESP on Chinese companies's investment, trade, and innovation collaboration within Europe.

Of particular note, the package suggests enforceable rules to tighten FDI screening and introduces measures that might impact the EU's outbound investment, exports, and research collaborations, potentially influencing the confidence of Chinese businesses investing and operating in Europe.

There is room for the EU to facilitate its investment and business environment. In 2022, Chinese investment flows to the EU were $6.9 billion, a 12.2 percent decline from 2021. Partly attributed to regulatory barriers, Chinese enterprises shift from mergers and acquisitions (M&As) to greenfield investment in Europe.

Results from CCCEU's survey of 180 Chinese companies and organisations last year indicate that 28% planned to expand their presence in Europe within the next 1-3 years, with 26% intending to increase investment and M&A activities. Simultaneously, there is a collective expectation within the business community for the EU to create a more favourable investment and business environment for Chinese enterprises looking to develop in Europe.

Our survey further reveals that 52% of respondent companies were concerned about the negative impact of the EU FDI screening mechanism, and 47% expressed concern about the possible effects of the "European Economic Security Strategy." These findings reflect the worries of Chinese enterprises in Europe about the evolving business and investment landscape in the EU.

On behalf of over a thousand Chinese enterprises in the EU, CCCEU has the following recommendations to improve the EU's investment and business climate:

Firstly, respect the global division of labour along global industrial chains and refrain from pursuing obsessive friendshoring supply chain and trade tools through non-market means; prevent the “de-risking” strategy from being generalised to negatively affect industrial sectors.

Second, ensure that Chinese enterprises enjoy the same equitable industrial opportunities, market access, and business environment as other enterprises in Europe. 

Third, maintain dialogue and cooperation in the strategic development areas of China and Europe, such as new energy, digital economy, green economy, etc., and embrace the opportunities for cooperation between China and Europe with a positive mindset, so as to jointly safeguard the stability of the supply chain of China, Europe, and the global supply chain.

Chinese enterprises view the European market as crucial to their global expansion and are prepared to intensify investments and engagement in Europe. The hope remains that the EU will foster a fair, non-discriminatory investment and business environment for Chinese companies.