(Bloomberg) -- British and German firms in China are having a tougher time doing business and worry about the outlook for next year, according to two new surveys.
About 58% of UK companies found it more difficult to operate in the Asian nation over the last 12 months, the fifth straight year that a majority of respondents reported a tougher environment, the British Chamber of Commerce in China found in a recent survey of members.
A separate survey by the German Chamber of Commerce in China released Wednesday found that less than one-third of firms were optimistic about their industry in 2025, a new low.
The surveys come as foreign investment into China slumps on geopolitical tensions, pessimism about the world’s second-largest economy and stronger competition from Chinese firms in industries such as autos. China has also struggled with weak consumer sentiment this year, prompting the government to take some steps like giving one-off cash handouts to people facing hardships.
US President-elect Donald Trump’s return to office could make running a firm in China more difficult. His vows to ramp up tariffs on shipments from the country may convince company executives to shift at least some of their businesses to other nations to avoid levies.
German firms identified weak demand in China and price pressure as leading challenges, while British ones cited China’s economy as the most significant difficulty for their operations.
Some 51% of German companies said they planned to step up investment over the next two years, the lowest figure in data going back to 2020. Though 76% of British firms said they would maintain or increase spending next year, which the chamber’s report said was a sign investment was stabilizing.
German companies continue to invest in China to remain competitive and as part of localization efforts, Maximilian Butek, executive director and board member of the German Chamber of Commerce in East China, said at a press briefing.
More than 300 British firms responded to the chamber’s survey from late September to early November. The German chamber’s research was done from early September to early October, with 546 member companies responding.
©2024 Bloomberg L.P.