The European Union's Chamber of Commerce in China is launching its Business Confidence Survey. In it, over 500 companies share their feelings about doing business in China. Our reporter Zou Yun takes a closer look at what industry leaders consider progress, and what their concerns are.

Enduring optimism for European companies doing business in China. According to the latest Business Confidence Survey, despite fiercer competition and rising labor and living costs, European businesses delivered strong financial results in 2017. The annual survey also showed the highest percentage of companies reporting positive earnings before interest and tax (EBIT) since 2005. And nearly 60% percent of the more than 500 companies polled believe China remains a top-three destination for present and future investment.

MATS HARBORN, PRESIDENT EU CHAMBER OF COMMERCE IN CHINA "It will continue for the simple reason that China is the second largest economy in the world, and growing. In many areas, China is the biggest home market in the world. So of course, as an international company, if you don't have a position in the Chinese market, your global position may actually be threatened."

This year's survey saw, for the first time, most respondents reporting that they think Chinese companies are equally or even more innovative than European firms. What's most notable is the dramatic increase in domestic firms' capability for product and service innovation. Survey results show that's catching up with their capacity for go-to-market and business model innovation.

MATS HARBORN, PRESIDENT EU CHAMBER OF COMMERCE IN CHINA "It means 2 things really, one is that of course as European companies, we need to stay on our toes, keep innovating and make sure we are competitive in an open and fair environment. But it also means the Chinese government, that we have a number of Chinese increasingly innovative companies, to ensure this good momentum kept up. It's time now for the Chinese government to stop pampering and protecting its own industries, and exposing even more to open and fair competition."

While European enterprises welcome these positive developments in China, a large number of them also report persistent regulatory barriers as one of their top concerns and challenges. The Chinese government underwent a large-scale organization restructuring during the political season this March. Many believe that now is a good window to address many of the country's regulatory problems.

ZOU YUN BEIJING "The Chinese government has made great strides toward fully opening up. They are committed to helping foreign and Chinese companies compete on a level playing field. And European companies say they look forward to the government taking more concrete measures, since this is vital to ensuring that China remains one of the most lucrative investment destinations. ZY, CGTN, BJ."