European Business in China Business Confidence Survey 2018 - 中国欧盟商会商业信心调查2018 Go back »

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This year’s Business Confidence Survey highlights an emerging contradiction: China’s increasingly sophisticated economy stands in stark contrast to its highly burdensome regulatory environment.

The growing appetite of China’s rising middle-class for high quality goods and services contributed to more European companies reporting positive financial results, while competition from Chinese firms—a majority of which were rated as equally or more innovative than EU companies for the first time—drove market efficiency. However, the regulatory environment has failed to keep pace, leaving many European enterprises facing the same challenges that have burdened them for years.

While China’s state-led industrial policies, such as China Manufacturing 2025, have resulted in some opportunities for European firms, many are still barred from participation. All foreign businesses are affected by these issues, but SMEs are particularly exposed and have reported fewer opportunities and worse outcomes than their larger counterparts across the board.

Overall, the glass is half full for the outlook on future business, with a majority of respondents still recognising China as a top three destination for present and future investment. However, the glass is clearly half-empty as far as ease of doing business is concerned, with half of European enterprises expecting the regulatory environment to worsen over the next five years.