(Bloomberg) -- A majority of European business leaders said the continent’s relationship with China will likely deteriorate over the next few years as challenges with trade and the geopolitical climate drive tensions.

About 54% of executives expect Europe-China relations will become worse over the next three years while only 7% believe there will be an improvement, according to a survey conducted by the European Round Table for Industry and Conference Board. 

Company heads in Europe listed the US-China relationship, de-risking and industrial overcapacity as the top friction points. 

Overall, CEOs were more optimistic about the business environment than six months ago due to improving sentiment around economic conditions. However, most of the positivity came from companies’ business outlook outside Europe.

“Leaders are optimistic for their companies’ investment and employment outside Europe – but within Europe expectations are a lot less bright,” Ilham Kadri, chief executive of Belgian chemical company Syensqo SA and chair of ERT’s Committee on Competitiveness & Innovation, said in a statement. 

The survey was conducted from April 3 to April 25 among 57 ERT members, with a response rate of 98%. 

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