EU Business Lobby Head Says 'enormous Waste' In Chinese EV Sector

Beijing, (APP - UrduPoint / Pakistan Point News - 11th Sep, 2024) Overcapacity of Chinese electric vehicles is among the top concerns facing European firms in the country, the president of a business lobby warned Wednesday, decrying "enormous waste" in some key sectors.

The world's number two economy is straining under the pressure of a highly indebted property sector, sluggish domestic spending and high youth unemployment.

Among the top concerns for European firms is a manufacturing glut -- propelled by massive state subsidies -- in key sectors, which many Western governments have called harmful to competition.

Brussels has this year imposed hefty provisional tariffs on EVs imported from China, after an anti-subsidy probe found they were unfairly undermining European rivals.

"There is just such enormous waste right now in some of these sectors," Jens Eskelund, president of the European Union Chamber of Commerce in China, said at a news event Wednesday.

"Why would you go, as a European company, to increase investment when you are going to see mass death in these industries in the coming years?" he asked.

Eskelund added that he expected to see a major reduction in the number of Chinese EV brands in the coming years.

Friction between China and Western governments is also dampening the outlook, as concerns over a potential trade war mount.

In this light, the risks of doing business are "mounting and the rewards (are) seemingly decreasing", the Chamber said in a position paper Wednesday.

"Many investors are now confronted with the reality that the problems they are facing in the China market may be permanent features," said the Chamber, which drew on the views of the more than 1,700 EU firms operating in the country.

"A substantial strategic rethink" may now be required, it warned.