Dear Members and Friends

I hope this message finds you refreshed and reenergized after the summer break, ready for the challenges ahead and brimming with new ideas to discuss and implement. For many of us, the months of July and August provide a crucial pause for relaxation. However, it seems that we have increasingly less time to rest and focus on our intentions. In Asia, the concept of summer breaks is less familiar, so those of us with an Asia-centric focus find even less time to rest.

Recent data emerging from the Chinese economy, the world's second-largest, has raised concerns. Some statistics are no longer being released, others reveal troubling trends compared to the same time last year, and yet others offer seemingly contradictory information. How should we interpret this data, especially when considering our business strategies in China? Since 2008, China has been the driving force of global growth. Is this era nearing its end? If so, what are the implications and who will assume that role?

Reading both local Chinese news and international reports on China paints a picture of daunting challenges juxtaposed with equally daunting opportunities. The messages from the Chinese government emphasize these opportunities, aiming to reassure both domestic and international investors and entrepreneurs. Sometimes this can be confusing.

Our current understanding often feels like observing from a distant riverbank through binoculars. Frequent obscuring mists, metaphorically speaking, blur our view. The past three years have seen the erosion of the economic bridge built over 74 years with mainland China. Our deep understanding of the 'other' riverbank, as it existed before 2020, has dimmed for both sides.

The Chinese delegations we hosted in the initial five months of this year sought to bridge this gap and foster mutual understanding. Our observation revealed a significant learning curve, as both sides recognized how the respective markets have evolved. A staggering 41% of China's GDP is now e-business related — a dramatic shift that many European entrepreneurs still grapple with. Conversely, Chinese entrepreneurs have come to realize that their e-business models may not be as effective in Europe, primarily due to differing legal environments. European entrepreneurs have also turned their view more towards the West.

Given these nuances, it's increasingly vital to gather firsthand information by visiting China. This allows direct engagement with business partners in mainland China and offers a clearer view of the evolving landscape. The SCCC trailblazer trip in early November is designed precisely for this. If you haven't yet considered it, I urge you to review the program and join us if it aligns with your schedule and objectives.

Last but not least, good news for foreigners working in China, the preferential individual income tax (IIT) policy on foreigners has been extended for another four years until December 31, 2027.

We hope September brings cooler, yet sunny days, along with the festive spirit of the Mid-Autumn Festival. Our next newsletter will be released in early October.

Kind regards

Chī yí qiàn, zhǎng yí zhì.

A fall into the pit, a gain in your wit. / Experience is the best teacher.