Business conditions tougher, Chinese firms in EU say, amid global tensions

By Philip Blenkinsop

BRUSSELS (Reuters) - Chinese companies in the European Union say business conditions have worsened for a fifth consecutive year, with a rise in geopolitical tensions and anti-Chinese sentiment hampering operations, according to a survey published on Monday.

The survey for the China Chamber of Commerce to the EU, carried out by consultants Roland Berger, gauged the views of about 200 Chinese enterprises in the year the EU imposed tariffs on electric vehicles made in China, souring ties with Beijing.

Their overall rating of the EU's business environment fell for the fifth year, with 68% believing it had worsened over the past year and over half saying the EU market is no longer fair and open.

Chinese companies pointed to barriers to participation in public tenders, reduced possibilities of qualifying for subsidies and longer screening of investments than companies from other countries.

Some 43% of Chinese companies said their investments in the EU would be higher this year than in 2023. However, that compared to over 80% in the survey a year ago.

The top factors attracting them to invest in the European Union were the opportunity to boost global awareness of brands, access to a large market with robust demand, and newer opportunities in the digital and green areas.

The top challenges were increased trade barriers, rising labour costs and geopolitical tensions.

Chinese companies expressed concern over the EU's focus on economic security and 'de-risking', much of it centred on a push to reduce EU reliance on China, particularly for critical raw materials. Some 90% of Chinese companies said it was impacting their operations.

In the electric vehicle sector, nearly two-thirds said their sales in the European market had fallen, with more than 80% saying they had less confidence to invest, and raised concerns over collaboration with European partners.

(Reporting by Philip Blenkinsop; Editing by Bernadette Baum)