EU business conditions have deteriorated for Chinese companies for the sixth consecutive year, according to a new survey. The report, published by the China Chamber of Commerce to the EU (CCCEU), cites rising political challenges and operational costs as primary pressures. This sustained decline highlights the growing strains in the economic relationship between the two global powers.
The survey, conducted by consultants Roland Berger, polled 200 Chinese companies and organizations. It assigned an overall score of 61 points to the EU business environment, a significant drop from 73 points in 2019. This score also marks a one-point decrease from the previous year, confirming a continuing negative trend.
Key Challenges: Politics and Market Access
The report identifies a complex web of challenges facing Chinese firms. Political factors, particularly the EU’s “de-risking” strategy, are creating significant headwinds. This strategy aims to reduce the bloc’s dependence on China, especially for critical goods.
Consequently, Chinese companies report facing stricter investment screenings and tariffs, such as those on electric vehicles. The CCCEU report states that while “extreme negative sentiment” has recently eased, core issues remain unresolved. “Barriers to market entry and restrictions on research collaboration continue to hinder Chinese companies’ operations in the EU,” the report said.
Specific operational hurdles identified include:
- Exclusion from government procurement opportunities.
- Prolonged and uncertain approval processes.
- Limited access to public subsidies.
- Restricted channels for engaging with EU policymakers.
A Paradox of Pessimism and Investment
Despite the gloomy assessment of EU business conditions, the survey reveals a paradox. Many Chinese companies still see the region as a vital market.
Approximately 62% of respondents forecast an increase in their EU revenue this year. Furthermore, just under half expect a rise in profits. This suggests that companies navigating the challenges can still find success.
Most notably, investment intentions remain strong. Half of all respondents said they plan to increase their investment in the EU. In contrast, only 11% expect a reduction. This indicates a long-term commitment to the market, even amid rising difficulties. For more data on international trade policy, the European Commission’s trade website offers extensive resources.
The Bottom Line
The survey paints a picture of a difficult yet indispensable market. Chinese firms are grappling with a tangible deterioration in EU business conditions, driven by political friction and protective measures. However, their continued revenue optimism and investment plans reveal a pragmatic determination to maintain a presence in the bloc. The future of this economic relationship will depend on whether political de-risking evolves into constructive engagement or leads to further economic decoupling.
