Survey Reveals: European Companies In China Show Waning Business Confidence

The president of the chamber of commerce states that companies have managed to reduce the immediate effects of heightened tariffs.

Although European firms report that the immediate effect of the U.S.-China trade dispute on their activities in China has been fairly minimal, they express lesser optimism regarding near-future business prospects, as indicated by a survey carried out by the European Union Chamber of Commerce in China.

Jens Eskelund, the president of the chamber, stated that European businesses were more ready for the ongoing trade conflict compared to when the initial round occurred in 2018, allowing them to reduce the immediate effects of heightened tariffs.

Nevertheless, the trade war has considerably impacted business confidence, as 59 percent of those surveyed indicated that conducting business became more challenging this year.

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There was likewise skepticism regarding the prospects over the coming two years, as 64 percent of participants anticipated increased competitiveness and 58 percent voiced worries about potential profit declines.

The survey conducted among 162 chamber members revealed that they were primarily impacted by China’s tariffs on U.S. products, as nearly half of those surveyed identified these tariffs as an issue.

Eskelund mentioned that Chinese tariffs were impacting key commodities essential for manufacturing, which could cause significant distress for businesses.

In contrast, more than two-thirds of participants reported that they were unaffected by the U.S. tariffs on Chinese imports. The study suggests this might be due to the “made in China, for China” strategy that numerous businesses have implemented.

When entering the international market… China remains a location you must consider.

Jens Eskelund, European Union Chamber of Commerce in China

Even though over half of the participants reported disruptions in their supply chains to varying degrees, Eskelund stated that China remained “a steady and reliable place for investments.”

He stated, ‘If you aim to participate in the international market with worldwide supply networks, and if your objective is to remain competitive based on cost and excellence, then China remains a location you must consider.’

The presentation outlining the survey outcomes indicated that trade tensions would probably result in reduced overall effectiveness, with businesses delaying choices because of increased levels of ambiguity.

The survey revealed that 57 percent of participants had not altered their business approaches and were still keeping an eye on developments.

Among those who had already acted, 17 percent adjusted their procurement strategies, and 14 percent postponed investments or growth initiatives in China. Nonetheless, 14 percent intended to boost their financial commitment to the nation.

The survey took place from April 17 to 27, one week prior to the announcement by China and the U.S. that they would meet for talks.

initial direct discussions about the trade dispute

this weekend.

“We ought to be hopeful that positive outcomes will arise from the discussions in Switzerland,” Eskelund stated.