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Business Standard
6 days ago
- Business
- Business Standard
European businesses report record-low optimism in China: Survey
Confidence among European businesses operating in China has fallen to a record low, according to the European Union Chamber of Commerce's annual survey released on Wednesday. The survey, based on responses from 503 member companies conducted in January and February, highlights growing concerns even before US-China trade tensions escalated further in April. Only 29 per cent of respondents said they were confident about growth prospects in China over the next two years, the lowest level since 2013. An equal 29 per cent expressed outright pessimism, the highest in the survey's history. Optimism regarding profitability dropped three percentage points from last year to just 12 per cent, another historic low. In contrast, 49 per cent expressed pessimism—setting a new record. EU firms urge China to enact promised reforms The EU Chamber of Commerce urged the Chinese government to fully implement newly announced reforms aimed at improving conditions for foreign businesses. Jens Eskelund, president of the Chamber, noted that concerns over China's domestic economy and persistent producer-price deflation were weighing heavily on both European and Chinese firms. '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,' Eskelund said. Barriers to market access persist The survey also found that market access and regulatory hurdles remain ongoing challenges. About one-third of respondents said they do not expect significant progress in this area—unchanged from last year's sentiment. Beijing has promised to maintain an open market for foreign businesses. In February, it approved a new policy framework to attract overseas investment, removing restrictions on foreign manufacturing investments and expanding industries open to foreign firms. China's slowdown cited as top risk Of those surveyed, 71 per cent listed China's economic slowdown as one of the top three risks to their operations in the country. This was followed by US-China tensions and regional geopolitical conflicts. 'A new, more fragmented globalisation is taking shape, while China's economy is stabilising with slower growth and greater competition—signalling transformation rather than decline,' said Denis Depoux, global managing director of Roland Berger, which co-conducted the survey. He emphasised that companies must adapt by localising operations and forming stronger partnerships with domestic firms. Rising EU-China trade friction The report also noted intensifying trade tensions between the EU and China, with both sides launching multiple trade investigations in recent months. Eskelund highlighted the impact of China's April export controls on critical minerals, which have disrupted production across hundreds of European operations. 'A number of companies in Europe will be running out of some of these minerals and production this week,' Eskelund said.
Fibre2Fashion
12-05-2025
- Business
- Fibre2Fashion
US-China trade war notably affects biz confidence of EuroCham members
Insights Though there has been a relatively limited direct impact of the recent escalation of US-China tariffs and trade measures on members of the EU Chamber of Commerce in China, the trade war has resulted in significantly heightened uncertainty for firms operating in China, a survey revealed. Over two-thirds of respondents said they have been unaffected by such tariffs. Though there has been a relatively limited direct impact of the recent escalation of US-China tariffs and trade measures on members of the European Union (EU) Chamber of Commerce (EuroCham) in China, the trade war has resulted in significantly heightened uncertainty for companies doing business in China, an online survey revealed. EuroCham members are most affected by China's tariffs on US goods, with almost half of respondents reporting this to be the case. Though there has been a relatively limited direct impact of the recent escalation of US-China tariffs and trade measures on members of the EU Chamber of Commerce in China, the trade war has resulted in significantly heightened uncertainty for firms operating in China, a survey revealed. Over two-thirds of respondents said they have been unaffected by such tariffs. By contrast, over two-thirds of respondents stated that they have been unaffected by US tariffs on imports from China. This can be attributed to the 'in China, for China' approach that many Chamber members have adopted, a release from the chamber, which conducted the flash survey, noted. The trade war has significantly affected business confidence, however, with 59 per cent of respondents stating that doing business has become more difficult since 2025 began, more than 60 per cent expecting intensified competition and 58 per cent concerned about future profits. While 57 per cent of respondents reported that their business strategy has not changed, they continue to monitor the situation. Of those that have already taken action, 17 per cent are making changes to their sourcing, 14 per cent are delaying investments or expansion plans in China and an equal percentage are looking to increase their investments in the country. 'It is difficult to overstate how much uncertainty this trade war has created for our members,' said Jens Eskelund, president of the chamber. 'But we believe that China can turn crisis into opportunity and demonstrate that it is a stable and predictable investment destination.' Fibre2Fashion News Desk (DS) Disclaimer - All News/Articles items are subject to copyright and no article either in full or part may be reproduced in any form without permission from Fibre2Fashion Pvt. Ltd. Disclaimer - All News/Articles items are subject to copyright and no article either in full or part may be reproduced in any form without permission from Fibre2Fashion Pvt. Ltd.
