BEIJING, China: European companies are spending less and cutting back on investment plans in China because the Chinese economy is slowing down, and strong competition is pushing prices lower. This is based on an annual survey released this week.

These companies’ problems are part of bigger troubles in China’s economy, which is suffering from a long-lasting real estate crisis that has made people spend less. At the same time, Europe and the United States are pushing back against the large amount of Chinese goods being exported.

“The picture has deteriorated across many key metrics,” said the European Union Chamber of Commerce in China in its 2025 Business Confidence Survey.

One reason Chinese exports are rising is because many Chinese companies, helped by government support, have built too many factories in key industries like electric vehicles. But there isn’t enough demand to match this ample supply.

This has led to price wars, where companies cut prices to compete, hurting their profits. Many are also trying to sell more products overseas.

In Europe, people worry that cheap imports from China could harm local factories and jobs. Last year, the EU put tariffs on Chinese electric vehicles, saying China gave unfair help to its EV makers.

Jens Eskelund, president of the EU Chamber in China, believes there is a growing feeling that the trade and investment relationship between Europe and China is no longer fair.

He said China is trying to get people to spend more but also needs to make sure that supply doesn’t grow faster than demand.

The survey found that profits have been under more pressure in the past year, and business confidence is still falling. Around 500 member companies took part in the survey between mid-January and mid-February.

“It is just very difficult for everyone right now in an environment of declining margins,” Eklund said.