The Chinese market is becoming less attractive for European companies due to incomplete reforms and mounting challenges, according to a position paper published on Wednesday by the European Chamber of Commerce.
The annual position paper said that for some companies, the risks of investing in China were beginning to outweigh the rewards.
The Chamber, which represents more than 1,700 members, stressed the need for concrete measures to address the main concerns of companies.
According to Jens Eskelund, chairman of the Chamber of Commerce, a tipping point has been reached. Investors are taking a closer look at their activities in China, as the challenges of doing business outweigh the rewards.
“While China still has significant potential, this situation urgently requires more action from the Chinese government, not more action plans.”
The document contains more than 1,000 recommendations to the Chinese government and a “blueprint” for rebuilding trust.
Some companies found better margins outside China, Eskelund said. Between a third and half of EU companies were waiting to see how the economy developed before making further investments in China, he added.
Despite these issues, the EU chamber did not expect its members to want to withdraw from China completely, as the country remained an important location for industries such as automotive and chemicals, Eskelund said.