Despite woes, China is hard to resist

European firms operating in China say the market has become increasingly challenging

- KEITH BRADSHER

European companies, many of which have operated in China for decades, are finding it increasingly difficult to do business in the country, another sign of how China’s weak domestic economy and opaque regulations are testing even long-standing multinational business ties.

European automakers have been rapidly losing market share and face many political difficulties. Volkswagen agreed last December to sell its factory in northwestern China's Xinjiang region, where Beijing has repressed Muslim ethnic groups. European pharmaceutical and medical imaging equipment companies have found themselves locked out of much of the state-run health system.

An extensive annual survey of businesses released Wednesday by the European Chamber of Commerce in China found that nearly three-quarters said it was getting harder to operate in China. It was the fourth consecutive year that the survey showed deepening corporate pessimism.

The proportion of European companies that plan to expand their operations in China has also fallen to a record low, with just 38% saying that they intend to do so this year. European investment has been important in bringing Western technology to China and in bringing Chinese products to world markets.