European businesses’ optimism about growth and profitability in China has hit a record low, overshadowed by economic downturns and rising geopolitical tensions, according to annual survey findings by a leading foreign business association, which called for the full implementation of recently announced measures aimed at improving the business environment.

Conducted in January and February, the survey of 503 chamber members showed a bleak outlook even before the China-US trade war intensified in April with soaring tariffs.

Only 29 per cent of respondents reported optimism about their growth prospects in China over the coming two years – the lowest level since 2013 – while another 29 per cent expressed pessimism, a record high over the same period, according to the business confidence survey results unveiled by the European Union Chamber of Commerce on Wednesday.

“Uncertainty resulting from escalating trade and geopolitical tensions, concerns about China’s domestic economy, and persistent producer-price deflation weigh on the minds of both European and Chinese companies,” chamber president Jens Eskelund said at a press conference.

The level of optimism about future profitability in China over the next two years also fell by 3 percentage points compared with last year, reaching just 12 per cent – another historical low – while a record-high 49 per cent of respondents expressed pessimism.

Similar to the previous year’s survey, market access and regulatory barriers remain widespread, with one-third of survey respondents not expecting to see meaningful improvements in market access.