European Firms Rebuild China Confidence for First Time Since 2022 as 68% Still See Tougher Conditions
Updated
Updated · South China Morning Post · May 27
European Firms Rebuild China Confidence for First Time Since 2022 as 68% Still See Tougher Conditions
5 articles · Updated · South China Morning Post · May 27
More than 500 European firms surveyed by the EU Chamber of Commerce in China showed the first rebound in confidence since 2022, with companies reporting better expectations for growth and profitability.
China’s appeal improved because Beijing was increasingly seen as a source of stability amid global turbulence, making the country look relatively dependable for manufacturing, sourcing and investment.
68% of respondents still said business conditions in China had become more difficult, but that was an improvement from a record 73% a year earlier.
Less than half of firms said China’s business environment had become more politicised, down from 52% last year, suggesting the broader deterioration in sentiment is easing.
The survey adds to signs that European companies are still leaning on China operationally, with many maintaining or expanding local manufacturing despite Europe’s de-risking push.
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Strategic Shifts in 2026: European Supply Chains in China Under Dual Regulatory and Geopolitical Pressures
Overview
As of Q2 2026, European firms remain deeply embedded in Chinese supply chains, driven by the need to compete with rivals who leverage China’s manufacturing strengths. While the EU is pushing for diversification and resilience to reduce over-reliance on single suppliers, this shift brings immediate costs and operational challenges. Heightened global uncertainties and regulatory pressures from both the EU and China are forcing companies to review sourcing strategies and accept a 'resilience premium.' Despite a strong strategic imperative to diversify, practical realities mean European firms must balance cost efficiency with the need for more robust and secure supply chains.