Overview
- The European Union Chamber of Commerce in China's 2026 Business Confidence Survey found softer declines in sentiment among 549 European firms operating in China, with 68% saying conditions grew more difficult compared with 73% the prior year.
- For the first time in five years fewer than half of respondents said the business environment had become more politicised, and the share 'optimistic' about profitability over the next two years rose to 17% from 12%.
- Companies singled out concrete operational problems driving the strain, including China's weak consumer demand, a prolonged property-sector crisis, high local government debt, regulatory hurdles and a fierce automotive price war.
- The Chamber and its president, Jens Eskelund, warned the improvements could reflect firms adjusting expectations after repeated shocks rather than a clear turnaround and noted the survey was conducted in January–February before later geopolitical events.
- If the softening holds, the shift could make China a relatively more stable sourcing and manufacturing base for European firms and influence investment and supply‑chain decisions, but policymakers and executives should watch for renewed regulatory or property-sector shocks.