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EU businesses ‘questioning their position’ in China: trade commissioner

European businesses in China face mounting concerns due to new security laws and political factors, leading to reevaluation and decreased confidence. EU Commissioner Valdis Dombrovskis highlighted challenges and urged for clarity.

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12 months ago

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BEIJING, CHINA — European businesses in China are increasingly questioning their positions in the face of tough new security laws and a politicisation of trade, an EU commissioner warned in Beijing on Monday.

“European companies are concerned with China’s direction of travel,” Valdis Dombrovskis said in a speech at the capital’s Tsinghua University.

“Many are questioning their position in this country.”

He pointed to a new foreign relations law and a recent update to China’s anti-espionage laws as being of “great concern to our business community”.

“Their ambiguity allows too much room for interpretation,” he warned.

“This means European companies struggle to understand their compliance obligations: a factor that significantly decreases business confidence and deters new investments in China,” Dombrovskis said.

The EU trade commissioner is on a multi-day visit to the world’s second-biggest economy, where he is set to meet senior economic officials and press the bloc’s case that it is not seeking an economic decoupling from China.

His trip follows a report by the Chamber of Commerce of the European Union last week that showed business confidence was at one of its lowest levels in decades.

“For decades, European companies thrived in China,” the Chamber’s president Jens Eskelund said.

But, after three “turbulent” years, he said, “many have re-evaluated their basic assumptions about the Chinese market”.

And it comes in the face of mounting trade tensions between the EU and China, following Brussels’ decision to launch a probe into Beijing’s electric car subsidies.

The investigation could see the EU try to protect European carmakers by imposing punitive tariffs on vehicles it believes are unfairly sold at a lower price.

The day after that announcement, the Chinese commerce ministry hit back at the EU’s “naked protectionism”, and said the measures “will have a negative impact on China-EU economic and trade relations”.

Speaking in Beijing on Monday, Dombrovskis insisted China remained an attractive investment opportunity for European businesses.

“The EU and China both benefited immensely from being open to the world,” he said. “Trading and cooperating across borders helped to shape our economic and geopolitical strength.”

But, he said, growing challenges for business risked turning “what many saw as a ‘win-win’ relationship in past decades could become a ‘lose-lose’ dynamic in the coming years”.

Ukraine war

China’s refusal to condemn Russia’s war in Ukraine also poses a “reputational risk”, he said.

Beijing’s position “is affecting the country’s image, not only with European consumers, but also businesses”, he said.

China has sought to position itself as a neutral party in the Ukraine conflict, while offering Moscow a vital diplomatic and financial lifeline as its international isolation deepens.

Russian leader Vladimir Putin is due to visit China next month.

“China always advocates for each country being free to choose its own development path,” Dombrovskis said.

“So it’s very difficult for us to understand China’s stance on Russia’s war against Ukraine, as it breaches China’s own fundamental principles.”

— AFP

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ST Telemedia Global Data Centres reinforces commitment to Digital India with US$3.2 billion investment

ST Telemedia Global Data Centres (STT GDC) is investing US$3.2B to expand its data centre capacity in India by 550MW, tripling its IT load. The move supports India’s growing digital economy and aligns with PM Modi’s Digital India vision, discussed during his recent visit to Singapore.

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1 week ago

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6 September 2024

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ST Telemedia Global Data Centres (STT GDC), a leading data centre colocation services provider headquartered in Singapore, has announced a major investment of US$3.2 billion (INR 26,000 crores) to significantly expand its data centre capacity in India.

This investment will add 550MW of data centre capacity over the next 5-6 years, nearly tripling the Temasek-backed company’s IT load capacity to meet the increasing demands of India’s rapidly growing digital economy.

The expansion is set to support the surge in data consumption, cloud computing, digital transformation, and the adoption of artificial intelligence (AI) applications across India. STT GDC, which already holds a 28% market share in India by revenue, views this move as a reflection of its confidence in the country’s digital infrastructure needs and the broader vision of Digital India.

“India’s digital economy is growing at almost three times the overall GDP growth rate and is expected to reach US$1 trillion by 2027-2028,” said Bruno Lopez, President and Group CEO of STT GDC.

“As we celebrate our 10th anniversary, this ambitious expansion underscores our commitment to Digital India, and we are confident in our ability to contribute to its long-term success.”

STT GDC India, majority-owned by STT GDC in partnership with Tata Communications Ltd, currently operates 28 data centres across 10 cities with a total capacity of over 318MW.

It serves approximately 1,000 enterprise clients, including many Fortune 500 companies. STT GDC India has also been recognized as a Great Place to Work for five consecutive years and is ranked among the Best Places to Work in Asia.

The announcement follows STT GDC’s participation in a Business Roundtable with Indian Prime Minister Narendra Modi on 5 September 2024, hosted by the Singapore Business Federation.

This strategic engagement further emphasizes STT GDC’s commitment to supporting India’s digital transformation through long-term investment and collaboration.

Prime Minister Modi’s visit to Singapore resulted in various agreements across key sectors, including a healthcare cooperation agreement between India and Singapore to collaborate on healthcare delivery, medical research, and digital health solutions.

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Giant to shut Toa Payoh supermarket in September, ninth closure in 2024

Supermarket chain Giant will shut its ninth store in Singapore by September 2024, citing tough competition from online retailers and grocery rivals. The Toa Payoh outlet is part of a series of closures this year, reflecting broader regional challenges for its parent company, Dairy Farm International (DFI).

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1 week ago

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6 September 2024

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SINGAPORE: Supermarket chain Giant will close its ninth store in Singapore by September 2024 as it faces intense competition from online retailers and other grocery chains.

The store, located in Toa Payoh Lorong 4, is the latest in a series of closures that have taken place this year, as reported by The Straits Times.

Since February, Giant has shut down a hypermarket in Sembawang Shopping Centre, supermarkets in Bishan, Ang Mo Kio, and Bukit Panjang, along with four smaller “Express” stores in Nanyang Technological University, Pasir Ris, Redhill, and Punggol.

Following the closure of the Toa Payoh outlet, Giant will operate 45 stores across Singapore, down from 53 earlier this year.

Despite these reductions, the grocer has also opened a new outlet in Tengah in 2024.

From 2020 to 2023, the number of Giant stores in Singapore remained relatively stable, hovering between 53 and 55.

However, the recent closures highlight broader challenges faced by its parent company, Hong Kong-based Dairy Farm International (DFI), which has seen a contraction in its regional presence.

DFI, which first entered the Malaysian grocery market in 1999, exited the country in March 2023 by selling its stake in GCH Retail, the operator of the Giant, Mercato, and Giant Mini chains.

Similarly, in 2021, PT Hero Supermarket, a retail group majority-owned by DFI, closed all of its Giant supermarkets in Indonesia after the group’s revenue fell by 34% year-on-year.

In April, the Business Times reported that DFI had put the 9,731 sq ft Housing Board retail unit in Toa Payoh, currently occupied by Giant, up for sale at a guide price of S$16.5 million.

The company stated that the sale was part of a strategy to reallocate resources and focus on improving customer experience in other stores.

DFI’s half-year earnings report published on 1 August 2024 revealed that its food operations in Singapore experienced declining sales due to challenging consumer sentiment.

Despite this, the group posted underlying profit growth, reaching US$76 million.

The company attributed this profitability boost to an improved product margin mix and effective cost control measures.

In response to the Singapore’s Toa Payoh outlet closures, a DFI spokesperson told ST that the company continuously evaluates its store network and adapts to market trends and consumer needs.

“Giant and Cold Storage remain core businesses of DFI Retail Group, and our commitment to growth and expansion in Singapore remains unchanged,” the spokesperson added.

According to DFI’s official website, the group operates in 13 countries and territories, with around 11,000 outlets and a workforce of approximately 200,000 employees.

In Singapore, DFI operates not only Giant supermarkets but also 7-Eleven convenience stores and the Guardian health and beauty chain.

The group’s parent company, DFI Retail Group Holdings Limited, is incorporated in Bermuda and is primarily listed on the London Stock Exchange under the equity shares (transition) category, with secondary listings in Bermuda and Singapore.

DFI’s businesses are managed from Hong Kong by DFI Retail Group Management Services Limited, through its regional offices. The group is a member of the Jardine Matheson Group.

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