Election manifestos, business confidence, and targets on EVs

Welcome to China in 5, from the British Chamber of Commerce in China.

Each week, we bring you up to speed with what’s caught our eye in the China-sphere in five(ish) minutes.?Grab a coffee, take a break, and dive in!

UK parties release election manifestos ahead of 4 July election

What's the background? The last week has seen all major parties introduce their manifestos in advance of the UK’s elections on 4 July. It's an opportunity for them to present their policy platform to convince voters to them. This year has seen a continuation of a trend for manifestos getting shorter and more focused, with them also focusing primarily on domestic issues. The major parties all have put forward messages about delivering growth to the country as a key priority.

Fact 1: Labour promoted a 'long-term and strategic approach' to China, or the snappy slogan - 'cooperate, compete and challenge'. Labour calls for ‘an audit of our bilateral relationship’.

Fact 2: Conservatives made detailed comments on China, on protecting domestic car manufacturers, asset freezes and travel bans on those involved under its human rights sanctions regime, and placing China as the enhanced tier of the Foreign Influence Registration Scheme.?

Fact 3: Liberal Democrats and other parties were much more aggressive on issues surrounding human rights, calling for an audit for UK based assets owned by officials from China, Iran and other countries.

Ultimately, there’s been a relative absence of China focus in this year’s election manifestos, though this is relatively consistent with other ones in the past. With the Labour party 20 points ahead in the polls, most stakeholders will be looking at the implications of their policies for British businesses, with some interesting additions on an industrial strategy for the country and a full China audit. Regardless of who wins the election, the British Chamber of Commerce looks for. Harry Bell , BritCham Policy and Advocacy Manager

China CEOs cautiously optimistic about China’s economy

What's the background? CEO confidence in China has risen slightly amid challenges like downgraded consumption, local competition, regulatory issues, and geopolitical uncertainties.

Fact 1: The CEO confidence index in China has inched up to 56 from 54 six months ago on a 0 to 100 scale. A reading below 50 points reflects more negative than positive responses, indicating a cautious optimism among multinational executives.

Fact 2: Despite current challenges, 51 percent of CEOs believe that Chinese demand will be above average globally in the next five years, showing a sustained belief in China's long-term market potential. Additionally, 26 percent expect Chinese demand to be on par with other major markets.

Fact 3: 35 percent of CEOs expect worsening China-EU relations, and 55 percent foresee a decline in China-US relations in the coming years. In response to these challenges, 71 percent of CEOs are expanding their "in China for China" localisation efforts, while 29 percent are diversifying their production capabilities to other regions like India, Southeast Asia, and North America.

Recent data on Chinese CEO confidence in the market aligns with findings from the British Chamber’s recent position paper and sentiment survey. While confidence is growing slightly, with an increasingly positive GDP growth number in Q1 in the China market this year, many businesses still await stronger signs of improvement. Both foreign and Chinese companies face similar challenges, especially geopolitical uncertainties, necessitating a recalibration of strategies and clearer business engagement. Strong alignment with headquarters on China strategy, planning, and risk management is clearly crucial. Empowering CEOs and businesses to make independent decisions is vital for success in a more complex Chinese market. This is a message we repeatedly advocate to our member companies. As businesses navigate these challenges, robust coordination between global headquarters and local operations will be crucial. Addressing these ongoing challenges through improved alignment and risk management will be essential for sustained growth. Rachel Tsang , BritCham Managing Director

Coffee break read: China’s Belt and Road Initiative a plus, the rest so-so on Hong Kong-Chiang Mai journey

Kristian Odebjer, Chair of the Swedish Chamber of Commerce in Hong Kong, writes about his 5-day trip from Hong Kong to Chiang Mai mainly using Chinese-built railways. This article is a good read to see the advancement of China's high-speed railways and a lack of China's Belt and Road Initiative with the bumpy Kunming-Bangkok Expressway as half of Laos debt is owed to China. With pen and paper at hand, Kristian makes detailed observations along the journey: window views, tunnels, food, Didi, the Chinese mobile transport company.

Podcast of the Week: The target painted on Chinese EVs

Why We Like It: Why does the European Union impose slapping tariffs on Chinese electric vehicles? Brussels believes the Chinese industrial policy is an illegal state support and breaches international trade rules. The Chinese would call the act of imposing tariffs a blatant protectionism. Listen to the podcast to learn about the impact of EU's tariffs on China as the country shifts its exports to some other key markets.?

And finally...

We're enjoying this long read from NPR's Morning Edition, recapping their recent visit to China. From delivery apps and empty malls, to declines in consumer spending and population numbers, it gives an excellent broad lens of the biggest challenges facing China right now.

If you want to hear our take on these issues and many more, don't forget to join us alongside Beijing to Britain and the Institute of Directors (IoD) at our inaugural UK-China Summer Conference on Wednesday 26th June! Click here to sign up.