EU business optimism in China at all-time low

Optimism about profitability among European companies in China has fallen to an all-time low, a survey showed on Thursday, with only 29 percent saying the outlook was positive in the world's number two economy. The statistic in the European Union Chamber of Commerce in China poll of more than 500 of its members was down from 34 percent last year and the lowest since the first survey in 2004. "Financial performance is worsening and optimism about profitability is at its lowest ebb," Davide Cucino, president of the European Chamber, said in a statement. The survey, which was carried out in March, showed 64 percent of respondents reported profitability for 2012, down from 73 percent in the previous year. The underperforming Chinese economy was a key reason dampening market sentiment as a stronger recovery had been expected, Adam Dunnett, secretary general of the European Chamber, told a press conference. "The figures that we've seen coming out of the National Bureau of Statistics... have shown... we are in for a longer haul, so I think that has caught some people by surprise that it hasn't been a sooner recovery," he said. China's economy grew 7.8 percent in 2012 -- its slowest pace in 13 years -- and registered a surprisingly weak 7.7 percent expansion in the first three months of this year, well below forecasts. Other challenges faced by European companies operating in the country included increased competition, rising labour costs and a sluggish global economy, according to the survey. The situation was exacerbated by China's limits on market access and a demanding and sometimes discriminatory regulatory environment, which led to lost revenues estimated at 17.5 billion euros ($22.7 billion) last year, said Davide.