The European Union Chamber of Commerce in China released a survey on May 27 showing that since 2022, 68% of European firms operating in China have experienced worsening business conditions over the past year [1, 2]. Companies cited fierce price competition in the automotive sector, regulatory hurdles, high local government debt, and an ongoing property crisis as major challenges [1, 2].
China's economic slowdown topped the list of concerns expected to negatively impact future business, while geopolitical tensions, notably conflicts in Ukraine and Iran, have increased worries for international firms [1, 2]. Despite these pressures, signs indicate business confidence deterioration in China may be easing. Indicators showed a slower rate of decline year-on-year, with less than half of surveyed respondents saying conditions had become more politicized—the first time in five years this fell below 50% [1, 2].
The survey of 549 respondents also found optimism about profitability on the rise for the first time since 2021. Seventeen percent expressed confidence in profitability over the next two years, up from 12% in 2025 [1, 2]. Jens Eskelund, Chamber President, said, "We are not really ready yet to call it a turning point. You had five consecutive years where business confidence had deteriorated. Now, certain data suggests to us that maybe something has shifted" [1]. He added, "There’s an element of crisis fatigue, so much volatility. We see the world becoming more turbulent but China may be a relatively stable and predictable market" [1].
Eskelund’s comments reflected a recognition that firms are adapting to repeated disruptions including the pandemic, multiple wars, and US-China trade tensions [1, 2]. The survey indicates a possible floor in confidence as companies adjust to ongoing uncertainties.
The Chamber’s annual survey provides a snapshot amid a complex and changing environment for European businesses in China. The next major update on these trends is expected with the Chamber’s 2027 survey release.
