Chinese firms operating in the European Union are facing increasingly difficult business conditions, according to Reuters marking the fifth consecutive year of decline in their confidence in the region. A recent survey by the China Chamber of Commerce to the EU, conducted with consultants Roland Berger, highlights how geopolitical tensions and a rise in anti-Chinese sentiment are weighing heavily on operations.
This comes during a year when the EU imposed tariffs on Chinese-made electric vehicles, further straining ties with Beijing.
The survey, which gathered responses from about 200 Chinese enterprises, revealed that 68% of the respondents feel the EU’s business environment has deteriorated over the past year. Over half believe that the EU market is no longer fair and open, citing barriers to public tenders, reduced access to subsidies, and prolonged investment screenings compared to their global counterparts.
While some 43% of Chinese firms reported plans to increase investments in the EU this year, this marks a sharp decline from the more optimistic 80% reported just a year earlier. Despite this, the EU remains attractive to these companies for reasons such as increasing global brand recognition, access to a large and diverse market, and opportunities in emerging digital and green industries.
However, significant hurdles persist. Companies are grappling with heightened trade barriers, rising labor costs, and ongoing geopolitical tensions. The EU’s strategic push towards “de-risking” and reducing its dependency on China, particularly for critical raw materials, has added to the strain, with 90% of surveyed companies reporting a direct impact on their operations.
The electric vehicle sector has been hit particularly hard. Nearly two-thirds of Chinese companies in this space reported declining sales in the EU, and over 80% expressed diminished confidence in further investments. Many also raised concerns about the challenges of collaborating with European partners amidst these tensions.
This complex landscape underscores the need for constructive dialogue and cooperation between the EU and China to navigate these challenges. For Chinese firms, balancing opportunity and adversity in the European market has never been more critical.
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