(Yicai) Nov. 13 -- Eighty-one percent of Chinese firms operating in the European Union describe the business environment in the EU in terms of "rising uncertainty," pointing to sustained macroeconomic pressures and an increasingly complex operating landscape, according to the latest report.

Chinese companies see increasing politicization of commercial issues, as the EU's intensive roll-out of regulatory policies has left many of them struggling to navigate a compliance maze, making long-term business planning difficult, according to the Weathering Challenges, Sharing Success report.

Weathering Challenges, Sharing Success is the seventh annual flagship study by the China Chamber of Commerce to the EU and global consultancy Roland Berge. It surveyed 205 Chinese firms and organizations operating in the EU.

The overall score for the EU business environment has declined for six consecutive years, falling to 61 in 2025 from 73 in 2019, underscoring the sustained operational pressure faced by Chinese companies in Europe.

The top challenges for Chinese enterprises operating in the EU are soaring labor costs, the EU's Economic Security Strategy, the increasingly complex global geopolitical landscape, uncertainty surrounding China-related policies at both EU and member state levels, and a shortage of highly skilled labor able to meet the needs of Chinese firms, according to the survey.

The broadening of the "economic security" agenda is now the foremost concern for Chinese companies in the EU, with 90 percent of the survey participants saying that it has "directly or indirectly undermined their operations and their confidence in the EU market."

The EU's tightened foreign direct investment screening, mainly on critical infrastructure, semiconductors, and artificial intelligence, has significantly increased uncertainty and compliance costs for Chinese investors. The survey found that 43 percent of Chinese firms actively investing or intending to invest in Europe postponed their investment plans due to the EU FDI Screening Regulation.

Against the backdrop of the EU's increasingly frequent and diversified use of trade defence instruments, the anti-subsidy investigation into Chinese electric vehicles stands out as "one of the most representative and far-reaching developments in recent years."

This investigation has introduced new uncertainties into China-EU economic and trade tensions, dealt a significant blow to Chinese carmakers committed to deepening their presence in the European market, and sparked intense debate within the EU over its economic interests and green transition agenda.

Survey respondents generally believe that the two sides should return to the negotiating table and resolve differences through constructive approaches, such as price undertakings.

After the implementation of the Foreign Subsidies Regulation in July 2023, the EU has launched several investigations into Chinese companies, with the scope expanding beyond the clean energy, locomotive, and security equipment industries to also include the automotive industry.

Survey data showed that 63 percent of the Chinese companies interviewed reported that their business had been affected by the FSR, 12 percent of which experienced direct impacts. Fifty-one percent of those not directly affected believed that the FSR had indirectly damaged their corporate image and undermined market confidence in them.

Fifty-three percent of companies said their revenue had increased last year from the year before, with 12 percent achieving significant growth. On the profitability front, 40 percent of firms reported an increase. Looking ahead to this year, 62 percent of survey respondents expect revenue growth and 46 percent project an increase in profits.

Half of all companies plan to raise investment in the EU, with 29 percent indicating a "significant increase." Only 11 percent intend to reduce spending.

"For Chinese companies, the European market has grown far beyond its initial role as an export destination," CCCEU President Liu Jiandong said. "It is increasingly regarded as a source of technological innovation, a touchstone for global brands, and a core region for aligning with international standards.

"By deepening mutual understanding and trust, we can move beyond narratives of 'competition and cooperation', and work towards a new paradigm of 'creative coexistence' based on mutual respect and shared understanding," Liu noted. "We hope that EU and Chinese companies will move forward together, using fair and transparent rules as the ballast of economic and trade cooperation."

Editor: Futura Costaglione