EU Chamber in China: Most European Firms Say Business Environment Has Deteriorated

The European Union Chamber of Commerce in China stated today that European companies operating in China are facing another year of increasing challenges, with most respondents saying the business environment has deteriorated since 2022. AFP reported that while Beijing is striving to revive the economy post-COVID-19, sluggish consumption is dragging down growth despite record-high exports. Specific difficulties faced by European firms include intense price wars in the automotive industry, regulatory barriers, high local government debt, and the long-standing real estate crisis. According to the Chamber's annual business confidence survey, 68% of the 549 respondents said the situation has become "more difficult" over the past year. However, the Chamber believes the pessimism may be bottoming out. The report notes that for the first time since the pandemic, the deterioration of business confidence has slowed compared to the same period last year. Chamber President Jens Eskelund stated, "We cannot say this is a turning point yet," but added that some data suggests "some things have changed." For instance, 17% of respondents are optimistic about profit prospects for the next two years, up from 12% last year.