Most Chinese companies are faring well in the European Union despite rising challenges such as higher labour costs, trade barriers and the bloc’s efforts to reduce dependence on Beijing, the China Chamber of Commerce to the EU (CCCEU) said in its annual report.

Over 80 per cent of surveyed companies reported stable or improved performance in Europe in 2024, with more than half posting revenue growth and 40 per cent turning higher profits, according to the report published on Wednesday by the CCCEU, in collaboration with consulting firm Roland Berger.

CCCEU chairman Liu Jiandong said China–EU economic ties were evolving from “complementary interdependence” to “strategic co-shaping”.

He noted that Europe had shifted from more than just an export destination for Chinese enterprises into a “hub for technological innovation, a proving ground for global brands and a key arena for standards alignment”.

Chinese investment in Europe surged last year, with a growing focus on Eastern European markets, particularly Hungary. The report noted that nearly 3,000 Chinese-invested enterprises operated across the EU’s 27 member states by the end of 2024, employing more than 260,000 local staff.

It also highlighted that Chinese companies have increasingly localised production within the bloc, following the principle of “in the EU, for the EU”.

This shift came amid European concerns about Chinese exports and competition, particularly whether they threaten jobs and industry. These fears – along with geopolitical issues such as China’s stance on the Ukraine war – have fuelled trade tensions, making the bloc increasingly wary of Chinese businesses and investment.