“The improvement we see in the survey is consistent with our anecdotal observations. Supportive measures announced by the government at the end of last year seem more convincing now, lending some support for an upswing in sentiment,” says Juliette Xue Lascoux, General Manager of SEB Shanghai.
However, companies remain very cautious about further investments amid continuous geopolitical uncertainty and challenges from intensifying local competition. Many Northern European companies say their future China strategy will require much more precision. The days when investment decisions were based on general faith in China as a market are gone.
At the time of this survey, the future landscape for international trade has not yet been settled with all the pauses and grace periods of announced tariffs.
“The potential impact of trade wars on business sentiment in China is not fully reflected,” Juliette Xue Lascoux says.
Three of the four index components (order intake, investment, staffing, and profit outlook) rose from the previous survey in December last year. However, the index is still well below the historical average of 57.2.
The current survey shows that respondents expect an enhanced overall performance. In terms of the sales outlook, it is flat compared to the outlook six months ago. Forty-four per cent of respondents expect little or no change in sales. The share of respondents that expect 5-20 per cent sales growth decreased to 31 per cent from 35 per cent, but those expecting over 20 per cent sales growth rose to 4 per cent from 1.4 per cent. Profit prospects have increased from last autumn’s weak situation. Most survey respondents (47 per cent) expect profit to stay almost flat. However, the share of respondents expecting profit growth over 5 per cent increased to 31 per cent (from 23 per cent), and those expecting profit growth of more than 20 per cent rose to 8 per cent from none.
As in the previous survey, the top three concerns for corporations were customer demand, geopolitics, and competition. Geopolitics and customer demand shared the top spot with a share of 21 per cent, while competition came in at 15 per cent. Though far behind, FX rates, material costs, and payment collection have risen as concerns.
“This is not surprising given the ongoing US-China trade disputes and the fact that most respondents have imports, exports, or both,” Juliette Xue Lascoux says.
Interestingly, even though the survey sample consisted of Northern European companies, 57 per cent of the respondents pointed to the US-China relationship as having a significant negative impact on business. However, this share had declined from the December 2024 survey. The agreed-upon trade framework in Geneva in May likely eased some of the near-term uncertainty.
Expectations on EU-China tariffs changed substantially from last autumn. A vast majority of respondents (67 per cent) expected tariffs on Chinese imports to be unchanged, a big jump from 34 per cent in the previous survey. Since the EU imposed tariffs on Chinese-made electric vehicles in October 2024, the talk of tariffs has largely stabilised.
About the survey
SEB’s China Financial Index was first launched in 2007 and is based on input, in this edition, from CEOs, CFOs or Treasurers at 68 subsidiaries of major Swedish, Finnish, Norwegian, Danish, German, British and Swiss companies. The survey was carried out between 18 June and 27 June 2025.