EU chamber in China flags manufacturing maladies, urging course correction in 5-year plan
Exhorting the need for a ‘new, productive development model’, latest chamber position paper airs members’ grievances
A member-driven organisation representing European business interests in China is urging policymakers to seize the opportunity – while forming the nation’s next five-year plan – to rebalance the economic-development model and strike at the heart of cutthroat price competition that hurts both foreign and domestic firms.
“While consumption in China is actually growing, a core issue is that manufacturing output has grown faster,” reads the chamber’s “European Business in China Position Paper 2025/2026”. “Involution, expanding inventories, pressure on profit margins, decreasing asset utilisation and pressure to export are all natural consequences of this mismatch.”
Involution, a term for low-quality price competition fuelled by oversupply in certain sectors, has also caught the attention of senior-most Chinese officials, with President Xi Jinping criticising the competition in July as a lever for “destructive discounting” and “unproductive outcomes”.