European businesses in China are increasingly questioning their positions in the face of tough new security laws and a politicisation of trade, a commissioner from the EU warned in Beijing on Monday.
"European companies are concerned with China's direction of travel," Valdis Dombrovskis said in a speech at Beijing's Tsinghua University.
"Many are questioning their position in this country."
The trade commissioner pointed to a new foreign relations law and a recent update to China's anti-espionage laws as being of "great concern to our business community".
"Their ambiguity allows too much room for interpretation," he warned.
"This means European companies struggle to understand their compliance obligations: a factor that significantly decreases business confidence and deters new investments in China," Dombrovskis said.
The EU trade commissioner is on a multi-day trip to China where he is set to meet senior economic officials and press the bloc's case that it is not seeking an economic decoupling from China.
His trip follows a report by the Chamber of Commerce of the European Union last week that showed business confidence was at one of its lowest levels in decades.