Brussels (Eurotoday) – Chinese companies operating in the European Union report that their business conditions have worsened for the sixth year in a row, citing increasing labour costs and political issues as key pressures on their operations, according to a survey released on Wednesday.
The China Chamber of Commerce to the EU (CCCEU), in collaboration with consulting firm Roland Berger, representing 200 Chinese companies and organisations, published its annual report.
According to the report, Europe’s performance in research, talent, digitalisation, and market access represented obstacles.
Chinese businesses 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. Approximately 81% of respondents perceived increasing uncertainty, and 67% reported that strong anti-China sentiment was affecting their business in Europe.
How has the EU de-risking strategy impacted Chinese firms?
The report said EU-China ties have become tense because of the EU’s “de-risking” strategy, which seeks to lessen dependence on China, especially for critical minerals. This approach includes tighter screening of investments and tariffs, particularly on Chinese-made electric vehicles starting from October last year.
What factors are driving rising business uncertainty in Europe?
The CCCEU stated that although there has been a recent easing of “extreme negative sentiment,” it has not yet led to significant 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
The report said.
Specific challenges encompassed being excluded from market access and government procurement opportunities, facing lengthy approval processes, having limited access to subsidies, and encountering restricted channels for government engagement.
How are Chinese companies maintaining profits despite tougher conditions?
Despite increasing challenges, over 80 per cent of surveyed companies in Europe also reported stable or better performance in 2024, with more than half experiencing revenue growth and 40 per cent achieving higher profits.
Last year, Chinese investment in Europe increased significantly, with a particular emphasis on Eastern European markets like Hungary. The report highlighted that by the end of 2024, almost 3,000 Chinese-invested companies were operating throughout the EU’s 27 member states, providing jobs for over 260,000 local workers.
It also noted that Chinese companies are increasingly localising their production within the EU, adhering to the principle of “in the EU, for the EU.”
Leave a Reply