European companies operating in China are the most pessimistic about growth prospects since 2011, a published by the European Union Chamber of Commerce in China says.
“European business confidence currently sits at or around record low levels for many key metrics, despite several policy initiatives geared towards strengthening the economy and the improving business environment for foreign investment having been launched over the past two years,” the report reads.
Faced with greater challenges, a record 73% (+5 percentage points (pp)) reported that doing business in China became more difficult year-on-year (y-o-y) in 2024.
- 71% (+1pp y-o-y) expect their China business to be negatively impacted over the next two years by China’s economic slowdown, and 60% (-1pp y-o-y) are pessimistic about the outlook for competitive pressure in their sector over the same time frame.
- A record 63% (+5pp y-o-y) missed business opportunities in 2024 due to market access and regulatory barriers, while 44% expect to see an increase in the number of regulatory obstacles faced over the coming five years.
- 52% reported that the business environment in China become more politicised in 2024 – a reflection of escalating geopolitical tensions. This percentage has likely increased as members were polled prior to the US-China April 2025 tariff hikes.
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“Uncertainty resulting from escalating trade and geopolitical tensions, concerns about China’s domestic economy and persistent producer price deflation weigh on the minds of both European and Chinese companies,” said Jens Eskelund, president of the European Union Chamber of Commerce in China. “Our key message to policymakers is: the disparity between supply growth and demand is eroding both profits and business confidence. Achieving a better balance, will not only benefit companies and make China a more attractive investment destination but may also lead to a reduction in trade tensions.”
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