Survey Reveals Deepening Pessimism Among EU Businesses
The confidence of European companies operating in China has plummeted to an all-time low, as detailed in the European Union Chamber of Commerce in China's 2025 Business Confidence Survey, published on May 28. The survey, which included 503 member companies and was conducted in January and February, found that a staggering 73 percent of respondents reported increased difficulties in doing business in China. This marks the highest level of pessimism since the survey's inception in 2011, with only 5 percent of companies noting any improvement in conditions.
Key factors contributing to this downturn include China's slowing economic growth and escalating geopolitical tensions. Many European firms are grappling with a challenging business environment, compounded by structural issues such as high debt levels and demographic challenges within China. The survey results suggest a growing frustration with the lack of a level playing field for foreign businesses, a concern echoed by numerous chamber members.
Economic Slowdown and Geopolitical Strains Take Toll
China's economic downturn has emerged as the dominant concern for European businesses, overshadowing even the challenges faced during the global pandemic. According to the survey, only 29 percent of respondents expressed optimism about growth prospects in China, while 49 percent were pessimistic about profitability. This sentiment is a sharp decline from previous years and reflects broader worries about the world's second-largest economy slowing to a crawl.
Geopolitical tensions have further exacerbated the situation, with many companies citing an increasingly politicized business environment. The recent escalation of trade disputes, including tariff hikes that intensified after the survey period in April, has added another layer of uncertainty. As one analyst noted in a report by The Epoch Times, there appears to be a 'silent decoupling' underway, with some firms reconsidering their long-term commitment to the Chinese market.
Future Outlook and Calls for Reform
Looking ahead, the outlook for European businesses in China remains bleak without significant reforms. The European Chamber of Commerce has urged Chinese authorities to prioritize economic growth and create a more equitable environment for foreign companies. Issues such as restrictions on critical raw materials and uneven regulatory practices continue to hinder operations for many firms.
The survey's findings have sparked discussions about the potential for further disengagement if conditions do not improve. With record lows across multiple metrics—optimism, profitability, and ease of doing business—European companies are at a crossroads. The coming months will be critical in determining whether China can address these concerns and restore confidence among international investors.