Emerging Markets

The reason is because the potential for growth in the Chinese market remains high, the European Union Chamber of Commerce in China said when releasing its annual business confidence survey.

"This year's survey reconfirms that the Chinese market is the most important emerging market for European businesses, and given the global slowdown, it might actually rise in significance," said Joerg Wuttke, president of the Chamber.

While the worldwide downturn has impacted exporting nations as their customers buy fewer of their goods, European businesses in China have a focus on the domestic market, not on exports, Wuttke said.

Lack of transparency problematic

He added, however, that investment in China is constrained by a lack of regulatory transparency, rising economic nationalism, violations of intellectual property rights and the arbitrary enforcement of environmental regulations.

Resolving these issues could lead to higher domestic economic growth, Wuttke said.

The survey found that "European companies in China are generally optimistic and committed to the Chinese market and its future despite mounting challenges," the Chamber said after polling more than 250 businesses.

While the Chamber said the growth of the Chinese economy was slowing, the number of European firms in China was rising, particularly among small and medium-sized companies, and the businesses in its survey reported rising profitability.