Chinese firms say EU business conditions have deteriorated for sixth year

Audio By Carbonatix

Enlarge

BRUSSELS (Reuters) -Chinese companies in the European Union say business conditions in the bloc have deteriorated for a sixth consecutive year, with rising labour costs and political challenges pressuring their operations, according to a survey published on Wednesday.

The survey for the China Chamber of Commerce to the EU of 200 Chinese companies and organisations said that the bloc’s performance in research, talent, digitalisation and market access represented obstacles.

In the survey carried out by consultants Roland Berger, Chinese companies and organisations gave an overall score of 61 points to the EU business environment, down from 73 points in 2019 and a point lower than in 2024.

EU-China relations have been strained by the EU’s “de-risking” strategy aimed at reducing its reliance on China, particularly for critical minerals, with stricter screening of investments and tariffs, notably on Chinese-built electric vehicles from October last year.

The CCCEU said that a recent easing of “extreme negative sentiment” had not yet resulted in fundamental improvements.

“Core issues, such as barriers to market entry and restrictions on research collaboration, remain unresolved and continue to hinder Chinese companies’ operations in the EU,” the CCCEU’s report said.

Some 81% of respondents saw rising uncertainty and 67% strong anti-China sentiment impacting their business in the EU.

Specific challenges included exclusion from market access and government procurement opportunities, prolonged approval processes, limited access to subsidies and restricted channels for government engagement.

Still, 62% of Chinese companies forecast an increase in their revenue in the European Union this year and just less than half expect a rise in profits.

Half of all respondents said they planned to increase investment in the EU, with only 11% expecting a reduction.

(Reporting by Philip Blenkinsop; Editing by Hugh Lawson)