China's economic slowdown was ranked as the top concern in the survey, which was conducted in January and February.
European companies operating in China said doing business became harder over the last year, with slowing output, rising wages, the trade war and other factors adding to challenges in the world's second-largest economy.
China's economic slowdown was ranked as the top concern in the survey, which was conducted in January and February. Since then, the economy has continued to lose momentum, with weak domestic consumption and exports weighing on growth.
"What we need for the European businesses in China is a predictable, reliable, fair business environment," Charlotte Roule, China Vice President of EU Chamber, said at a press conference on Monday. Many of the top concerns for the European companies in terms of China's regulatory obstacles are what triggered the dispute with the U.S., "but to us, those issues require or deserve a WTO case," she said, referring to the World Trade Organization.
That is what the European Union is doing, and the chamber doesn't support using U.S. methods to solve the challenges it faces in China, she said.
Only 6% of companies have moved or are considering moving relevant production out of China, but any escalation of tensions would "take a heavy toll on business sentiment, leading to a tightening of investments," the chamber said in the report.
"One of the more significant shortcomings of ChinaGs reform agenda is that certain high-level promises to improve its business environment for international companies have failed to translate into concrete action," it said.
In a recent policy paper on China, the EU described the country as a 'cooperation partner' in some areas and a 'systemic rival' in others. "This requires a flexible and pragmatic whole-of-EU approach enabling a principled defense of interests and values," said the March 12 paper by the European Commission, the bloc's executive arm.
The EU Chamber of Commerce report also highlighted the continued concerns about forced technology transfers, with 20% of respondents saying they had felt compelled to hand over know-how in order to maintain market access.
This was an increase from 10% in 2017, and was a particular issue in high-value, high-tech industries such as chemicals and petroleum, medical devices, pharmaceuticals and cars.
There was also a significant jump in European companies' perceptions of how innovative China over the past few years. In 2019, 38% of respondents said China's innovation and R&D environment was more favorable than the worldwide average, compared to 60% last year and 15% in 2016, the survey showed.