EU Chamber 2026 Survey: European Business Confidence in China Grows

The EU Chamber China 2026 Business Confidence Survey reports increased optimism in European businesses, noting eased challenges despite ongoing market access, regulatory, and economic hurdles, highlighting China’s importance.

Key Points

• The EU Chamber of Commerce in China’s 2026 Business Confidence Survey highlights a modest improvement in European business sentiment. Despite ongoing challenges like market access, regulatory barriers, and economic slowdown, the proportion of companies reporting a worsening environment declined for the first time in five years.

• Challenges persist, with 68% of companies noting increased difficulty in doing business, especially in sectors like automotive and civil engineering. However, sentiment toward market access and regulatory barriers improved, with a drop in reported missed opportunities due to these issues.

• While 53% of businesses still consider China a top investment destination, operational dependencies remain, with 94% using China for sourcing. Positive developments in the 15th Five-Year Plan could improve business confidence, but self-sufficiency policies pose concerns. The Chamber recommends administrative improvements and enhanced communication for better foreign investment conditions.

The EU Chamber of Commerce in China’s 2026 Business Confidence Survey indicates a shift in European business sentiment, with fewer companies reporting a deteriorating environment than in previous years. This change, occurring for the first time in five years, suggests a potential positive inflection point. Despite ongoing concerns such as market access issues, regulatory barriers, and economic slowdown, optimism has slightly increased due to China’s economic resilience amidst global volatility.

The survey highlights significant challenges that persist for European businesses, including inconsistent application of regulations and a slowing economy. While 68% of companies still find the business environment in China more challenging than the previous year, the percentage reporting a worsening environment has decreased since 2021. Industries like automotive and medical devices face significant pressures, while the environment and retail sectors fare better.

Key issues affecting business outlook include the economic slowdown, with 57% of companies citing it as a challenge—a reduction from previous years. Competition from domestic companies is also a concern, particularly in saturated markets like machinery and medical devices. Geopolitical risks persist, especially for industries like aviation.

Improvements in sentiment towards market access and regulatory barriers were noted, with fewer companies reporting missed opportunities due to these issues compared to last year. However, strategic sectors like pharmaceuticals and IT face localization pressures and domestic favoritism. Despite improvements, the percentage of companies facing market access barriers is still higher than pre-pandemic levels.

China remains a critical market for European businesses in terms of sourcing and production, yet investment attractiveness is waning. With only 53% ranking China as a top investment destination and the highest percentage on record having no investment plans, there is a paradox where operational reliance coexists with investment reluctance.

To bolster business confidence, the Chamber suggests leveraging China’s 15th Five-Year Plan, which emphasizes stable growth, national treatment for foreign enterprises, and balancing trade. However, concerns regarding industrial policies that prioritize domestic companies persist. The Chamber recommends both minor administrative improvements and significant structural reforms to enhance the business environment for European firms, suggesting a focus on streamlining processes and increasing dialogue between businesses and the government.

This complex landscape reflects persistent operational dependencies on China, juxtaposed with increasing caution among European companies about further investment, necessitating strategic navigation of the challenges ahead.

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