It is unbelievable what has come to this: European multinationals are crying at the mercy of the Chinese economy

Multinational groups from Volkswagen, AB InBev and L’Oréal have issued the alarm about demand in China, the effects of an economic slowdown exacerbated by the decrease in appetite for foreign brands and the tightening of competition domestic, writes mediafax.ro.

Results this week from WPP, the London-listed advertising giant, saw sales in China fall by almost a quarter over the past three months, a poor outlook in the country and signs of consumer caution.

“People expected post-Covid China to recover more than it did,” said Mark Read, managing director of WPP.

L’Oréal, which sells luxury and mainstream beauty products in China, estimated that sales growth in the country fell by around 2-3 percent in the first half of the year, while Porsche, which is owned by VW, that sales in China in the six months. to June down a third compared to the previous year.

China’s heavily indebted housing sector has been in sharp decline since late 2021, with home prices falling faster in recent months. Despite the relaxation of strict Covid-19 control at the end of 2022, the weakness of the housing market has affected confidence as well as demand for consumer goods.

As a result of the pandemic, many businesses with experience in China – local and overseas – expected consumption-based incentives to boost growth. Although this has not happened, economists believe that Beijing could take such measures if Donald Trump is re-elected.

Fitch Ratings analysts pointed to data which showed that in the first half of the year, growth in China’s supply sector slowed to below 8% for the first time since 2010, excluding the Covid period.