Survey shows 73% found doing business more difficult in 2024, despite supply chain onshoring trend

European business confidence in China has plummeted to record lows across multiple key metrics, according to a survey released , even as companies increasingly move their supply chains into the country.

The European Business in China Business Confidence Survey 2025, conducted by the European Union Chamber of Commerce in China with Roland Berger, found that 73 percent of respondents reported doing business in China became more difficult year-on-year in 2024 - a record high that marks a five-percentage point increase from the previous year.

The findings highlight the complex dynamics facing multinational corporations operating in the world's second-largest economy, where regulatory hurdles and geopolitical tensions are weighing on sentiment despite the competitive advantages of Chinese manufacturing.

A record 63 percent of respondents said they missed business opportunities in 2024 due to market access and regulatory barriers, representing a five percentage point increase from the previous year. Looking ahead, 44 percent expect to encounter more regulatory obstacles over the next five years.

The survey revealed that 71 percent of companies expect their China operations to be negatively affected by the country’s economic slowdown over the next two years, whilst 60 percent remain pessimistic about competitive pressures in their sectors.

Political considerations have also become more prominent, with 52 per cent  reporting that China's business environment became more politicised in 2024. The chamber noted this figure was likely to have increased since the survey was conducted before the US-China tariff increases were implemented in April 2025.

Despite the challenging environment, the survey uncovered a notable trend towards supply chain localisation within China. Some 26 percent of respondents reported they are partly or fully onshoring their supply chains into the country - a five percentage point increase year-on-year. By contrast, only 13 percent are offshoring or establishing alternative supply chains elsewhere.

Companies cited the need to strengthen supply chain resilience and leverage competitive Chinese manufacturing capabilities as the primary drivers behind this onshoring trend.

The confidence crisis has translated into record-low optimism about profitability and growth prospects. Only 12 percent of respondents expressed optimism about near- and medium-term profitability, whilst just 29 percent were positive about growth outlook.

A historic low of 38 percent reported plans to expand their China operations, compared with 36% who have no expansion plans. Meanwhile, 52 percent indicated cost-cutting measures are planned, matching last year's record high.

"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," said Jens Eskelund, president of the European Union Chamber of Commerce in China.

"Our key message to policymakers is: the disparity between supply growth and demand is eroding both profits and business confidence. Achieving a better balance, will not only benefit companies and make China a more attractive investment destination but may also lead to a reduction in trade tensions."

Denis Depoux, global managing director of Roland Berger, said the findings reflected broader shifts in the global economy rather than simple decline.

"A new, more fragmented globalisation is taking shape, while China's economy is stabilising with slower growth and greater competition – signalling transformation rather than decline," Depoux said.

"This evolving landscape presents fresh challenges for multinational companies, requiring highly localised China and Asia operations, fully integrated from R&D to customer service. MNCs must leverage regional supply chain hubs, partnerships with Chinese firms and local ecosystems, and innovative business models to successfully adapt and compete in this dynamic environment."

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JK Tyre & Industries Ltd has inaugurated the Phase III expansion of its passenger car radial tyre manufacturing facility at Banmore in Madhya Pradesh, increasing production capacity as it steps up domestic manufacturing investment.

The expansion lifts the plant’s output to 30,000 passenger car radial tyres a day, equivalent to about 10.5 million tyres a year. The development forms part of a multi-phase investment of more than INR 10 billion at the Banmore site.

The new facility was inaugurated by Hisashi Takeuchi, in the presence of Raghupati Singhania and Anshuman Singhania, alongside senior representatives from Maruti Suzuki India Limited.

JK Tyre said the expansion supports its strategy to serve India’s aftermarket, original equipment manufacturers and export markets, as passenger vehicle demand continues to grow. With the commissioning of Phase III, the Banmore plant has become a key hub for high-performance passenger car radial tyre manufacturing.

Speaking at the inauguration, Dr Raghupati Singhania said: “The inauguration of Phase III expansion by Hisashi Takeuchi San at our Banmore plant reflects JK Tyre’s unwavering commitment to strengthening India’s manufacturing ecosystem and supporting the country’s mobility growth story. As passenger vehicle demand continues to rise, our focus remains on incessant capacity enhancement, modernisation, and technology-led innovation. Banmore has been a cornerstone of our passenger car radial journey, and this expansion further reinforces our ability to serve OEMs and consumers with high-quality, sustainable, and future-ready products, while contributing to industrial growth and employment generation in Madhya Pradesh.”

The company said the Banmore facility continues to contribute to regional industrial development through direct and indirect employment, sustainability-focused manufacturing practices and community initiatives, including programmes in healthcare, education, livelihood development and sports.

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Caterham Motorsport has entered a new multi-year partnership with Nova Motorsport, appointing them as the Official Tyre Partner. This agreement effectively continues the successful, long-term relationship previously held with Avon Motorsport, as Nova Motorsport now manufactures the same championship-winning tyre products under licence.

The partnership ensures a supply of high-performance tyres across four official Caterham championships: the Roadsport and 270R Championships will utilise the Nova ZZS; the 310R Championship will use the Nova ZZR and ZZS and the flagship UK Championship will be equipped with Nova Motorsport Slicks and Wets. These tyres, rebranded from the former Avon line, are specifically engineered for the unique demands of the Caterham Seven.

Freed from the constraints of road tyre labelling regulations, the new Nova ZZR and ZZS products are dedicated entirely to track performance, offering enhanced capabilities. This transition to the Nova brand and the secure, long-term nature of the alliance underscore Caterham Motorsport's strategic confidence in Nova Motorsport to deliver proven, ultra-high-quality products for its driver-focused racing series.

Daniel Stanton, Head of Sales & Marketing, Nova Motorsport, said, “We are immensely proud to solidify our relationship with Caterham Motorsport as the brand’s official tyre partner. This builds on a working relationship that has lasted many successful years under the Avon Motorsport banner. Nova Motorsport and Caterham share key synergies as businesses; we are both focused on the specialist, niche and high-performance segments of the automotive and motorsport world. This multi-year partnership is a major strategic pillar for Nova Motorsport. It underscores our unwavering commitment to reliably supplying Caterham competitors around the world with the tyres they need to compete and win at the highest level.”

Alex Read, Head of Motorsport, Caterham, said, “Nova Motorsport is the perfect fit for Caterham Motorsport. Our products demand specialist tyres, and the Nova team, with its heritage rooted in Avon Motorsport, understands this implicitly. The tyres supplied are uniquely designed for our Sevens, meaning our competitors will directly benefit from Nova Motorsport’s renewed dedicated focus on the Caterham product. We are fully confident in the quality and service our drivers will receive and are looking forward to getting the 2026 Caterham Motorsport racing season underway with our new partners.”

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A pivotal strategic collaboration agreement between Norwegian innovator reTyre and global high-performance bicycle tyre leader Vittoria anchors a new EUR 7 million investment round. This financing, led by Hatch Blue’s Blue Revolution Fund with Fundracer and existing investors, fuels reTyre’s mission to transform the bicycle tyre industry. The capital will scale production, fulfil a substantial order book and accelerate the path to profitability.

The foundation of this venture is reTyre’s patented injection moulding technology, the result of over a decade of research. This process enables fully automated, decentralized production near OEM assembly lines, slashing transport costs and emissions. It achieves an 80 percent reduction in CO₂, allows for 100 percent recyclability and operates dust-free.

The investment will immediately establish a fully automated production cell in Norway, with a second Asian facility planned for 2026. While already serving a broad customer base, reTyre’s partnership with Vittoria specifically targets the performance utility tyre segment. Together, they will co-develop and commercialise a new generation of high-performance tyres leveraging reTyre’s sustainable technology.

This confluence of strategic collaboration, substantial funding and deep-tech innovation marks a definitive turning point. It unites sustainable production, market-leading performance and strategic investment to reshape the future of the global bicycle tyre industry.

Paul Magne Amundsen, CEO and Founder, reTyre, said, “After a decade of focused R&D, we’re proud to disrupt the industry with a technology that delivers a new level of performance while enabling true circularity and a sustainable solution in tyre manufacturing. Support from Hatch Blue, Fundracer and our co-development partnership with Vittoria, reflects deep confidence in both our vision and the breakthrough potential of our platform as we continue to scale.”

René Wiertz, Managing Partner, Fundracer, said, “We are proud to support reTyre and to work alongside their team in scaling this groundbreaking technology. reTyre’s deep-tech platform enables clean, local and automated production of all types of tyres. It aligns perfectly with Fundracer’s mission to back sustainable, high-performance innovations that will redefine the future of mobility.”

Georg Baunach, Managing Partner, Hatch Blue, said, “I’m excited to work with Paul and the rest of the reTyre team over the next few years. It is rare to come across truly disruptive innovation, and we are convinced that reTyre can completely change the way the multi-billion-dollar tyre market is structured. As reTyre scales, incorporating side and waste streams from regenerative aquaculture could meaningfully improve the economics and sustainability of aquaculture production.”

Stijn Vriends, Chairman & CEO, Vittoria, said, “We’ve followed reTyre for many years and are convinced that their unique production method can successfully be applied to utility bicycle tyres. Vittoria stands for performance and sustainability, and reTyre’s technology delivers both. We’re excited to collaborate and bring this next generation of sustainable performance tyres to market.”

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The second round of ABB FIA Formula E World Championship's Season 12 concluded with the Hankook Mexico City E-Prix, a vibrant festival of motorsport held at the iconic Autódromo Hermanos Rodríguez. Hankook Tire's iON Race tyres were integral to the spectacle and strategy at the celebrated venue, where intense racing met a uniquely challenging environment. The high-altitude circuit, located over 2,200 metres above sea level, placed a premium on thermal management and consistent grip, demands met by the predictable performance of the iON Race compound throughout the evolving conditions.

Across this demanding circuit, all teams competed on Hankook's race-proven iON Race tyres. These tyres provided a stable and reliable platform, crucial for managing the unique energy and heat constraints of the high-altitude event. The iON Race tyres delivered predictable warm-up and consistent grip, allowing drivers to push with confidence through both high-speed and technical sections of the lap. Their ability to maintain a steady contact patch and effective thermal control supported strategic flexibility and vehicle balance as track conditions evolved throughout the race distance.

The event, which also marked Formula E's 150th race, was ultimately won by Nick Cassidy, securing a maiden victory for Citroën. He finished ahead of Edoardo Mortara for Mahindra Racing and Oliver Rowland for Nissan. With the Hankook Mexico City E-Prix complete, the championship now looks ahead to Round 3, the Miami E-Prix, scheduled for 31 January 2026 at the Miami International Autodrome.

Manfred Sandbichler, Senior Director of Hankook Motorsport, said, “Mexico City once again proved how decisive stable tyre behaviour is at high altitude. Across a race that demanded constant adaptation, the iON Race delivered the confidence and consistency teams needed to manage energy, temperature and balance under challenging conditions.”

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