In China, easy money is no longer possible! European enterprises complain that investing in China is becoming increasingly difficult.

According to the "2025 Business Confidence Survey Report" released by the EU Chamber of Commerce in China on Wednesday, the sentiment among European enterprises in China has fallen to a new low. Jens Eskelund, Chairman of the EU Chamber of Commerce in China, believes that the days of easily earning substantial profits are gone for good.

The report shows that only 29% of surveyed companies expressed optimism about their growth prospects in China over the next two years, down 3 percentage points year-on-year. Seventy-three percent of surveyed companies said that doing business in China had become even more difficult over the past year. This proportion increased by 5 percentage points compared to last year, setting a new record high.

Only 38% of surveyed companies plan to expand their operations in China, also a new low, compared to 42% last year; 36% have no plans for expansion. The remaining companies remain undecided. Fifty-two percent of surveyed companies plan to cut costs in the coming year, another record high.

So far, the biggest concern for enterprises is the slowdown in China's economic growth (71%). In addition to the conflict between the two major economies of the US and China and geopolitical risks, they are also concerned about increasingly fierce competition from Chinese private enterprises (46%) as well as rising economic nationalism (42%).

Despite this, the report states that more surveyed enterprises are repatriating their businesses to China, indicating that China's supply chain remains competitive. Data shows that 26% of surveyed enterprises are relocating their overseas supply chains back to China, an increase of 5 percentage points year-on-year.

Jens Eskelund, Chairman of the EU Chamber of Commerce in China, stated in Beijing that current uncertainties are undermining business confidence, making it difficult for enterprises to remain optimistic. He pointed out that the additional tariffs imposed by the United States and recent developments within the EU are reasons for the unease among enterprises.

In the past, European enterprises could easily earn substantial profits in China. However, this situation no longer exists today, and the days of "easy money and rapidly accumulating funds" are over. Now, companies must work twice as hard to achieve profitability.

In particular, domestic Chinese enterprises are becoming stronger competitors, squeezing profit margins across multiple industries through intense price wars. The competitiveness of European enterprises, especially in industries like automobiles, is declining further.

The Chairman of the EU Delegation to China expressed affirmation of China's efforts to boost consumption and hopes that the Chinese side will take more measures to ensure that supply growth does not exceed demand growth.

Original source: https://www.toutiao.com/article/1833370160865353/

Disclaimer: The article solely represents the views of the author.