The mood among European companies in China has reached a new low, according to a new survey by the European Union Chamber of Commerce in China published on Wednesday.

Just 29% of the firms surveyed said they were optimistic about their growth prospects in China over the next two years.

Chamber president Jens Eskelund said in Beijing that the current level of unpredictability is hurting business confidence, making it hard for companies to remain optimistic. He cited US tariffs and recent developments in the EU as sources of unease.

Sentiment has slipped another three percentage points from last year. For 2024, nearly three-quarters of surveyed companies said doing business in China had become more difficult.

From easy profits to tighter margins

According to Eskelund, the predictability and reliability of the market had made China attractive and companies were earning good money there.

But the days of high profits and filling bank accounts with little effort now seem to be over, he said, adding that companies have to work harder for their money.

Among the 503 companies surveyed, the majority voiced concerns about China’s overall economic outlook. Demand remains sluggish, partly due to the prolonged property sector crisis, which has led many consumers to tighten their spending as home values fall.

At the same time, domestic Chinese companies are emerging as tougher competitors, with intense price wars squeezing profits across multiple sectors.

The chamber also highlighted growing unease over Beijing’s unpredictable and non-transparent regulations. In some industries, businesses say rising political interference is making operations even more difficult.