World

Chinese Companies Thrive in EU Despite Beijing-Brussels Tensions: How are They Navigating the Storm?

Chinese firms in EU report stable revenue and profits, despite tensions. Most expect growth, but face EU’s “de-risking”.

byAndres Castro

November 12, 2025, 9:16 AM

Exterior of the BYD car showroom in Milan, Italy, with a green electric car visible through the window.

The exterior of the BYD Autotorino Pioneer Store showroom in Milan, displaying an electric vehicle. By Antonello Marangi / Shutterstock.com.

Executive Summary

The majority of Chinese companies in the EU reported stable or increasing revenue and profits in 2024, with 84% seeing stable or rising revenue and 82% experiencing stable or increased profits.

Despite economic resilience, 90% of Chinese firms in the EU reported negative impacts from the bloc’s “de-risking” strategy and economic security focus, with 81% finding the business environment more unpredictable.

EU-China relations are increasingly affected by the US-China rivalry, with issues like rare earth export curbs and the Nexperia case highlighting Europe’s position “caught in the cross-fire,” despite recent minor de-escalation.

The Story So Far

The current situation arises from the European Union’s strategy to reduce its strategic dependence on China, driven by concerns over China’s substantial trade surplus and its strengthening ties with Russia, leading to actions like tariffs and anti-subsidy investigations. This dynamic is further complicated by the escalating economic rivalry between the US and China, exemplified by issues such as rare earth export curbs and the Nexperia dispute, which places the EU in a challenging “cross-fire” position. Despite these significant geopolitical headwinds, Chinese companies operating within the EU largely report stable or increasing revenues and profits, underscoring the enduring economic interdependence amidst political friction.

Why This Matters

Despite escalating geopolitical tensions and the EU’s “de-risking” efforts, Chinese companies operating in the bloc largely report stable or increasing revenues and profits, with many planning further investment, underscoring the resilience of economic ties. However, these firms are significantly impacted by the EU’s focus on economic security and perceived discrimination, while the EU itself risks becoming “collateral damage” in the intensifying US-China rivalry, with actions by President Trump and Beijing directly affecting critical supply chains like rare earths and semiconductors, necessitating a focus on self-reliance.

Who Thinks What?

Chinese companies operating in the EU report stable or increasing revenue and profits, view the EU as a key market, and plan to increase investment, despite concerns about the EU’s “de-risking” strategy and perceived discrimination.

The European Commission is actively pursuing a strategy to reduce the bloc’s strategic dependence on China, implementing tariffs and investigations due to concerns over China’s trade surplus and ties with Russia.

Denis Depoux of Roland Berger warns that EU-China ties risk becoming “collateral damage” in the US-China rivalry, emphasizing that Europe is “caught in the cross-fire” and needs resilience and self-reliance amidst persistent geopolitical headwinds.

The overwhelming majority of Chinese companies operating within the European Union have reported stable or increasing revenue and profits, despite escalating geopolitical tensions between Brussels and Beijing. A recent survey, released on Wednesday by the China Chamber of Commerce to the EU (CCCEU), which represents over a thousand Chinese firms in the bloc, indicates a remarkable resilience in economic ties.

Survey Highlights

According to the CCCEU’s annual poll, 84% of its members saw stable or rising revenue in 2024, with 82% experiencing unchanged or increased profits. Only a small minority, 16% and 19% respectively, reported declines in revenue and profits.

The survey also revealed that just over half of Chinese firms consider the EU a key regional market, with 93% anticipating its strategic importance to grow further. Nearly two-thirds of businesses expect continued revenue growth, and 50% plan to increase investment in the EU.

Liu Jiandong, chairman of the CCCEU, acknowledged the “remarkable resilience” of the China-EU economic and trade relationship. He encouraged Chinese firms to “continue to deepen their presence in the European market” despite “multiple hurdles,” including increasing market access obstacles.

Geopolitical Friction and Economic Security

These findings emerge amid persistent friction between Brussels and Beijing. Key points of contention include China’s substantial global trade surplus, which reached a record $1 trillion last year, and its strengthening political and economic ties with Russia following the 2022 invasion of Ukraine.

The European Commission has been actively pursuing a strategy to reduce the bloc’s strategic dependence on China, which stands as the world’s second-largest economy and the EU’s second-largest trading partner after the United States. Over the past year, the EU executive has implemented tariffs on Chinese electric vehicles and steel exports, initiated multiple anti-subsidy and anti-dumping investigations, and deepened cooperation with the US on “economic security,” a move widely interpreted as targeting Beijing.

Impact on Chinese Firms

Despite the overall optimism regarding revenue and profit, the survey highlighted significant concerns among Chinese businesses. 90% of respondents stated that the EU’s focus on economic security and “de-risking” from China had negatively affected their operations. Furthermore, 81% of firms reported that the business environment in Europe had become more unpredictable, and four out of ten companies felt they had experienced discrimination for being Chinese.

US-China Rivalry and EU Implications

Denis Depoux, global managing director of Roland Berger, a consultancy firm that compiled the survey with the CCCEU, warned that EU-China ties risk becoming “collateral damage” in the escalating rivalry between Washington and Beijing. China’s export curbs on strategically critical rare earths, implemented shortly after President Trump’s announcement of “reciprocal tariffs” in April, have particularly alarmed European industries already facing intense competition from Chinese manufacturers.

China holds a dominant position, controlling 70% of global rare earth mining and 90% of refining capacity, giving it significant leverage over the supply of metals vital for advanced technologies, including electric vehicles and defense systems. Tensions were further exacerbated when, under US pressure, the Dutch government seized control of Nexperia, a Chinese-owned semiconductor firm based in the Netherlands, last month. Beijing retaliated by banning exports from Nexperia’s Chinese subsidiary, which processes the majority of the firm’s chips, causing panic among European carmakers.

Recent De-escalation and Future Outlook

In recent weeks, tensions have shown some signs of easing. Beijing announced a partial resumption of Nexperia’s chip exports and a one-year suspension of some rare earth restrictions following a meeting in late October between President Trump and his Chinese counterpart, Xi Jinping. Negotiations are also ongoing between European and Chinese officials to “improve the implementation” of Beijing’s remaining rare earth restrictions, as stated by EU Trade Commissioner Maroš Šefčovič earlier this month.

However, Depoux cautioned that the “geopolitical headwinds” impacting EU-China relations are “unlikely to improve down the road.” He concluded that Europe finds itself “caught in the cross-fire of the economic war between the US and China,” necessitating resilience, self-reliance, and anti-coercion policies in an increasingly transactional global environment.