According to a survey conducted by the European Round Table for Industry (ERT), which includes leaders from major European companies like ASML and Unilever, a majority of Europe’s top executives predict that relations between Europe and China will worsen in the next three years. They cite the European Union’s strategy of reducing dependencies and Beijing’s strong ties with Moscow as primary sources of tension. Specifically, 54% of those surveyed anticipate a decline in EU-China relations, while only 7% expect improvements.
The European Union (EU) is China’s largest export market for goods, while China is the third largest market for EU goods.
In the ERT’s survey published on Wednesday, China-based CEOs of Western multinationals were more upbeat than counterparts in Europe, with the number expecting no change outweighing those who saw a worsening of ties.
Both groups saw de-risking, the EU strategy to reduce its reliance on China, notably for critical minerals and technology, as a top point of friction.
CEOs, especially those based in China, also saw Beijing and Moscow’s “new era” of partnership as a key risk.
Chinese relations with the United States and Chinese industrial overcapacity were seen as other key areas of future friction for EU-China ties.
The survey separately found European CEOs and chairs more upbeat overall than at any time since late 2021. However, the increased optimism was mainly related to prospects outside Europe rather than within.
The CEOs believed the new EU leadership that emerged after the European Parliament election on June 6-9 would have the greatest positive impact for Europe’s economic prospects by simplifying regulation and by completing the EU single market.
With Inputs From Reuters
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