Chinese companies are planning to deepen their presence in the European Union (EU) market despite concerns over regulation and policy uncertainty, according to a report released this week at a forum in Luxembourg.

Released at the 2026 New Quality Productive Forces and Cross-Border Finance Forum in Luxembourg, the report was based on surveys and in-depth interviews with around 100 Chinese enterprises operating across Europe. It was jointly published by the China Chamber of Commerce to the EU, China Economic Information Service Shanghai Headquarters, and Xinhua News Agency's Europe Regional Bureau.

MORE INVESTMENT, GREATER LOCALIZATION

Nearly 80 percent of surveyed Chinese firms said they planned to expand investment in the bloc over the next three years, with around 15 percent saying they would increase investment significantly, the report showed, underscoring Europe's central place in their long-term global strategies.

"Chinese investment in Europe has become increasingly diversified in recent years, spanning 18 industrial sectors," it said. New energy vehicle and auto-parts makers accounted for more than a quarter of the surveyed firms, followed by IT and software services companies and renewable energy businesses.

Liu Jiandong, chairman of the China Chamber of Commerce to the EU, speaks at the 2026 New Quality Productive Forces and Cross-border Finance Forum held in Luxembourg on March 24, 2026. (Photo by Peng Ziyang/Xinhua)

Speaking at the forum, Suo Peng, minister for trade and economy at the Chinese Mission to the EU, said sectors such as electric vehicles, renewable energy, artificial intelligence and biotechnology were becoming new frontiers for bilateral cooperation.

He called on European financial institutions to provide more long-term capital for technological innovation and urged Brussels to foster an environment conducive to long-term technological breakthroughs and broader sharing of innovation gains.

Suo also called on the EU to seize opportunities in the Chinese market as the country embarks on its 15th Five-Year Plan (2026-2030), with a commitment to advancing high-standard opening up and fostering a new development paradigm marked by greater market access, a better business environment and enhanced institutional openness.

"China's commitment to green development and digital transformation aligns closely with Europe's strengths, creating fertile ground for long-term, win-win cooperation," Suo said.

The report also showed that Chinese firms are increasingly localizing their operations in Europe, shifting from exporting to Europe to pursuing an "in Europe, for Europe" strategy.

That shift reflects a maturing approach to the European market, said Luigi Gambardella, president of the Brussels-based international digital association ChinaEU. He said at the forum that Chinese firms now need to strengthen not only their industrial footprint but also their institutional engagement in Europe.

As companies move into higher value-added industries, they face more complex regulatory, political and social scrutiny, he noted, adding that investment in public affairs, branding and local communication has become increasingly important.

EU POLICY UNCERTAINTY WEIGHS

Yet the survey also highlighted the pressures faced by Chinese firms in the EU. More than half of respondents cited policy uncertainty as their top concern, ahead of geopolitical risk, market access barriers and cultural differences. More than 72 percent identified greater policy stability and predictability as the most needed improvement.

A cargo plane of China Postal Airlines from China's Zhengzhou to Luxembourg is pictured on the tarmac before its maiden flight at Zhengzhou Xinzheng International Airport in Zhengzhou, central China's Henan Province, June 23, 2025. (Xinhua/Li Jianan)

Among the EU rules and measures seen as having the greatest operational impact were the General Data Protection Regulation, the Foreign Subsidies Regulation, anti-subsidy measures targeting Chinese electric vehicles, and the bloc's batteries regulation.

Jacques Bortuzzo, president of the China-Luxembourg Chamber of Commerce, described the uncertainties created by EU policies as "unfortunate." He called for a more cooperative policy orientation from the EU, so both sides could address shared challenges together, and urged European stakeholders to engage more directly with China to build mutual understanding.

Gambardella said Europe had every right to safeguard its economic security, but warned against a drift toward protectionism. In key sectors, he said, regulated cooperation with Chinese firms could support innovation, competitiveness and the resilience of European value chains.

Suo also pointed to the growing protectionist tendencies in Europe in recent years, citing a range of acts and instruments that have imposed restrictions in areas such as public procurement and greenfield investment, thereby hindering normal China-EU economic and trade cooperation.

He called on the EU to step out of the "small attic" of protectionism, refrain from introducing further restrictive trade measures, and provide Chinese companies with a fair, transparent and predictable business environment.

FINANCE AS A BRIDGE

Luxembourg featured prominently in the discussion as an example of relatively stable financial engagement between China and Europe.

Chinese Ambassador to Luxembourg Hua Ning said the country had played an important role in promoting bilateral economic ties, as it is the largest offshore renminbi clearing center outside Asia and a major platform for listings of Chinese euro-denominated bonds.

He noted that seven major Chinese commercial banks operate in Luxembourg, providing comprehensive financial services for Chinese enterprises expanding into Europe and European businesses entering the Chinese market.

Last year, several Chinese and foreign-funded banks assisted China's Ministry of Finance in issuing 4 billion euros (about 4.62 billion U.S. dollars) of sovereign bonds in Luxembourg for the first time, he said, adding that the next stage of cooperation should focus on improving financial infrastructure and expanding cross-border financial products to support investment in emerging industries.

Luxembourg's Minister of Finance Gilles Roth speaks at the 2026 New Quality Productive Forces and Cross-border Finance Forum held in Luxembourg on March 24, 2026. (Photo by Peng Ziyang/Xinhua)

Luxembourg Finance Minister Gilles Roth also stressed the need to continue cooperation at a time of geopolitical tension, technological change and supply-chain reorganization. Cooperation is no longer optional but necessary in such an environment, he added.

Roth underscored the growing importance of renminbi internationalization, noting that its next phase in Europe should further integrate capital markets, payment systems and sustainable finance.

"Finance will continue to support growth, innovation and stability across borders -- that is in Luxembourg's interest, in Europe's interest, and also in China's interest," Roth said.