European Business in China: Key Insights from the EU Chamber’s 2024/2025 Position Paper

The EU Chamber’s Position Paper 2024/2025 highlights challenges faced by European businesses in China, including economic slowdown and regulatory compliance. It offers recommendations for policy reform, bilateral cooperation, and emphasizes the need for consistent regulations to enhance investment attractiveness amidst uncertainty.

In our overview of the EU Chamber’s European Business in China Position Paper 2024/2025, we delve into the key challenges European businesses face amid China’s slow economic recovery and regulatory uncertainties. The Position Paper highlights significant issues, including economic slowdown, overcapacity, and regulatory compliance difficulties, while providing targeted recommendations for policy reform and enhanced bilateral cooperation. The report emphasizes the need for consistent policy implementation and clear regulatory guidelines, while advocating for proactive EU engagement and strategic adjustments by European companies to navigate the evolving market landscape effectively.

On September 11, 2024, the European Chamber released its annual European Business in China Position Paper 2024/2025 (the “Position Paper”), addressing the growing challenges faced by European companies operating in China.

Drawing on insights from over 1,700 member companies and 35 working groups, the Position Paper offers comprehensive recommendations to improve the business environment. It outlines the increasing difficulties European companies are encountering and proposes key areas for policy reform.

While European companies remain invested in China’s success, the growing risks associated with operating in the country are making it increasingly difficult to justify further investments.

Below we explore the key challenges European companies face and the EU Chamber’s recommendations for making China a more attractive destination for European investors.

In 2024, European companies are contending with a sluggish economic recovery in China. According to the Position Paper, China’s growth has hit historically low levels. The weaker-than-expected post-COVID rebound has significantly dampened business confidence, with the automotive sector, for example, experiencing reduced demand and slower sales compared to pre-pandemic times. This economic slowdown has made long-term investments and strategic planning more challenging.

China’s recent economic policies, including substantial investments in manufacturing and green technologies, have led to notable overcapacity. The Position Paper points to the solar panel industry as a prime example, where the surge in production has created a surplus that outstrips domestic demand.

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