Europe's companies in China: Great pessimism reaches highs!

Europe's companies in China: Great pessimism reaches highs!

Peking, China - The mood among European companies in China has reached an alarming low. According to a survey by the European Union in China, only 29% of companies surveyed show optimism with regard to their growth prospects for the next two years. This value has dropped by three percentage points compared to the previous year, which illustrates the precarious situation in which these companies are located. Almost three quarters of companies report more difficult business for 2024, which takes into account the pressure on the European market in China.

The main reason for this pessimism is the existing inconsistency and uncertainty in the market, which are shaped by a weak demand, especially as a result of the real estate crisis. Consumers save on real estate values ​​due to the falling real estate values, while the competition increases in many industries and gain price struggles to intensity. In addition, there are frequent and opaque changes to the regulatory framework in China, which make it more difficult for many European companies to operate profitably.

challenges for European companies

In the survey, several industries stated that they were particularly affected by these problems. These include the cosmetic industry, the construction, the auto industry, as well as the petrochemical industry and the IT and telecommunications industry. The situation in the construction system, which suffers from the burden of a deep indebted real estate crisis, is particularly worrying. The aviation industry, on the other hand, seems to have hardly been affected by the deteriorations described.

like the Tagesschau reports, European companies in China are struggling with the most difficult market access so far. 68% of the companies surveyed state that access to the market is a serious obstacle. Over 50% of companies see the biggest challenge in the stagnant Chinese economy and 44% are pessimistic about their winning ideas for the next two years.

global competitive conditions and reform needs

The President of the EU Chamber of Commerce in China, Jens Eskelund, expressed his discomfort about the decreasing attractiveness of China for investors. According to numerous European companies that include medium-sized and large corporations such as BASF or BMW, it is interested in strategically rethinking their approach to the Chinese market. The EU Commission also examines possible Chinese subsidies that could violate international competition rules. This could lead to punitive tariffs on products such as electric cars, which affects resistance from German automobile manufacturers.

The burdens for companies in China not only press the profit margins; According to the Merkur report two thirds of the companies surveyed, which are up or below the global average levels. Despite these adverse circumstances, almost 25% of companies are willing to continue to invest in China, even if fewer than half are striving for cost reductions, often with personnel breakdowns.

While geopolitical tensions are intensified and production in China slowed down, the inadequacy of the Chinese reforms shows that companies may be forced to make strategic decisions in order to protect their own business interests. This makes it clear that the challenges that European companies face in China not only affect the current business, but also have far -reaching changes in the corporate structures and strategies.