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(Bloomberg) — Stocks chalked up a modest rebound as traders tracked the selloff in long-dated bonds, fueled by anxiety over inflation and mounting government debt. Gold hit a fresh all-time high.

European stocks rose 0.3% after suffering their steepest loss in a month in the previous session. Nasdaq 100 futures advanced 0.5% as Alphabet Inc. rallied in extended trading on Tuesday, buoyed by a ruling that Google won’t be forced to sell its Chrome browser. Contracts on the S&P 500 climbed 0.3% after two days of losses.

While equities found firmer footing, the bond selloff deepened. The yield on 30-year Treasuries climbed three basis points, coming within a whisker of the 5% threshold. Japanese debt joined the rout, with 20-year yields hitting the highest since 1999. UK gilts weakened further, while euro-area bonds proved more resilient.

The fragility of bonds underscores the strain from heavy public spending, which demands ever-rising bond issuance, and a broader erosion of confidence in sovereign credit. That uncertainty has spilled into equities, where traders are grappling with stretched valuations after a record rally, alongside persistent concerns over monetary policy and inflation.

“I don’t see this movement as a threat to the rising trend of stock markets,” said Roland Kaloyan, head of equity strategy at Societe Generale SA. “We don’t see yields rising much further than their current levels. That being said, this bond selloff means that there will be an even greater focus on Friday’s US job data and their impact on the Fed’s easing policy.”

Gold’s latest record comes as growing expectations for US interest-rate cuts bolster the metal’s attractiveness. The drop in bond and equities has also strengthened its appeal as a haven. Bullion climbed as much as 0.4% to hit 3,546.96 an ounce before paring gains.

“President Trump’s continued efforts to erode the Fed’s policy independence are also shaking confidence, in turn helping hard assets such as gold,” wrote Michael Brown, senior research strategist at Pepperstone Group Ltd. “The bull case remains intact.”

Corporate News:

Alphabet Inc.’s Google will be required to share online search data with rivals while avoiding harsher penalties, including the forced sale of its Chrome business, a judge ruled in the biggest US antitrust case in almost three decades. Alphabet shares rose in after-hours trading. The US has revoked Taiwan Semiconductor Manufacturing Co.’s authorization to freely ship essential gear to its main Chinese chipmaking base, potentially curtailing its production capabilities at that older-generation facility. TSMC shares retreated in Taiwan. Apple Inc.’s lead artificial intelligence researcher for robotics has departed the company to join Meta Platforms Inc.’s competing effort, part of an exodus of AI talent from the iPhone maker. A group of Thames Water’s senior creditors has submitted a new operational plan to the UK regulator as part of its bid to rescue and take over the ailing utility. Hong Kong is probing allegations of insider dealing that involve at least two individuals at the stock exchange and the city’s financial regulator as well as brokers and social media influencers. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.3% as of 9:05 a.m. London time S&P 500 futures rose 0.3% Nasdaq 100 futures rose 0.5% Futures on the Dow Jones Industrial Average fell 0.1% The MSCI Asia Pacific Index fell 0.8% The MSCI Emerging Markets Index was little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1641 The Japanese yen fell 0.2% to 148.71 per dollar The offshore yuan was little changed at 7.1456 per dollar The British pound fell 0.1% to $1.3374 Cryptocurrencies

Bitcoin fell 0.2% to $111,212.14 Ether was little changed at $4,318.2 Bonds

The yield on 10-year Treasuries advanced three basis points to 4.29% Germany’s 10-year yield declined one basis point to 2.77% Britain’s 10-year yield advanced two basis points to 4.82% Commodities

Brent crude fell 0.5% to $68.82 a barrel Spot gold rose 0.1% to $3,537.23 an ounce This story was produced with the assistance of Bloomberg Automation.

©2025 Bloomberg L.P.

Shell has axed the construction of its biofuels plant in the Netherlands, ending what would have been one of the biggest converters of waste into green jet fuel in Europe.

The oil company, which paused construction at the site in July last year to tackle technical problems, said it had decided not to restart building after it found the plant would be “insufficiently competitive” to meet demand for “affordable, low-carbon products”.

The move to scrap the project in Rotterdam marks another setback for its biofuel designs, after the company cancelled a sustainable aviation fuel (SAF) project on Singapore’s Bukom Island in March 2023.

It comes amid a wider shift away from renewable energy projects in the oil and gas sector as fossil fuel companies pursue higher profits.

In March last year Shell watered down a key emissions target, setting out a plan to reduce the carbon emissions intensity of the energy it sells by 15-20% by the end of the decade compared with its previous goal of 20%.

Shell began construction of the plant in Rotterdam in the Netherlands in 2021, initially expecting to start producing up to 820,000 tonnes of biofuels, with plans to bring it online in April 2024. This was later pushed back to 2025.

Machteld de Haan, the company’s head of downstream, renewables and energy solutions, said: “As we evaluated market dynamics and the cost of completion, it became clear that the project would be insufficiently competitive to meet our customers’ need for affordable, low-carbon products.

“This was a difficult decision, but the right one, as we prioritise our capital towards those projects that deliver both the needs of our customers and value for our shareholders.”

She added that the company continued “to believe that low-carbon molecules, including biofuels, will underpin the future energy system” and that Shell was “one of the world’s largest traders and suppliers of biofuels, including sustainable aviation fuel”.

About half of the biofuels from the plant in Rotterdam were expected to be used for SAF, made from waste cooking oil and animal fat.

Proponents for SAF believe it could be crucial for airlines to cut their carbon emissions in line with global climate targets, although critics argue it is not a realistic alternative given the limited timescale to prevent rising emissions from creating a climate disaster. The aviation industry accounts for about 3% of the world’s carbon emissions, according to the International Energy Agency.

European SMEs in China face growing challenges from regulatory complexity, competition, and financial constraints, with smaller firms particularly affected. The upcoming 2025/2026 Position Paper is expected to outline recommendations to improve financing, regulatory clarity, payment practices, IP protection, and fair market access.

European small and medium-sized enterprises (SMEs) continue to play a significant role in China’s economy, contributing to trade, innovation, and local employment. However, operating in the Chinese market has become increasingly complex, as companies contend with regulatory uncertainty, competitive pressures, and financial constraints. Understanding the evolving landscape is critical for SMEs seeking to sustain and expand their presence in China.

The EU SME Centre, in collaboration with the European Union Chamber of Commerce in China, conducted a survey between March and May 2025 to gather insights directly from European SMEs. While the final position paper has not yet been released, the preliminary findings of the survey suggest several emerging trends and concerns that are likely to shape the final recommendations —and these insights form the basis of our current article.  The survey captures the experiences of businesses operating across a range of sectors, including machinery, professional services, automotive and auto components, chemicals and petroleum, and medical devices, and provides a comprehensive view of the challenges, opportunities, and strategic priorities for SMEs in the country.

Survey findings highlight the geographic concentration of European SMEs, with a significant presence in Shanghai, Beijing, Nanjing, and Guangzhou, while smaller clusters operate in other commercial hubs such as Tianjin, Shenzhen, Shenyang, Chengdu, and Chongqing. This concentration reflects SMEs’ preference for established economic centers with robust infrastructure and business networks, while also pointing to potential growth opportunities in second-tier cities where competition may be less intense but local market knowledge and strategic planning remain essential.

This article draws on the survey data and broader policy developments to provide a forward-looking analysis of the challenges European SMEs face in China, as well as the measures and strategies that can help them navigate the market effectively. Following up on the 2024/2025 Position Paper, the article also previews the key recommendations expected in the 2025/2026 Position Paper, which will outline actionable steps to support SMEs, enhance competitiveness, and foster a more transparent and equitable business environment.

Challenges facing European SMEs in China: Local competition remain the top concern

European SMEs operating in China encounter a complex set of challenges that affect their growth, operations, and strategic planning. Competition with Chinese private companies remains the most pressing concern, compounded by slower economic growth and rising operational costs. Smaller firms are particularly exposed to cashflow pressures, often intensified by late payments, which can limit investment and responsiveness. Larger European companies, while also facing competition, prioritize talent management and navigating regulatory complexity, reflecting differing resources and operational priorities.

Access to financing continues to constrain SMEs. Many struggle to obtain loans from local banks and have limited access to government incentives or cross-border funding, forcing careful capital management. By contrast, larger firms generally face fewer constraints, highlighting the disparities in scale and institutional access. Revenue sources further underscore these differences: SMEs often rely heavily on European clients, following larger partners into China, while larger firms are more integrated with domestic clients.

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Regulatory and administrative hurdles remain a persistent challenge. SMEs report difficulties in understanding opaque requirements, securing licenses and permits, and navigating lengthy or inconsistent registration processes. Inconsistent enforcement across jurisdictions adds further uncertainty, increasing operational risk. Larger companies face similar issues on a broader scale, but SMEs are disproportionately affected due to limited resources. Late payments and unfavorable contract terms, particularly from private companies, create additional liquidity pressures.

These delays require SMEs to dedicate time and resources to debt management, which can affect day-to-day operations and strategic initiatives.

Intellectual property protection, while improving, continues to pose difficulties. High costs, piracy, counterfeiting, and limited enforcement capacity disproportionately impact SMEs, particularly in sectors where patents and proprietary technology are critical. Larger companies are better equipped to manage these risks, highlighting the resource gap between SMEs and major firms.

Anticipated recommendations for European SMEs in China

The 2025/2026 Inter-Chamber SME Working Group Position Paper, due in September 2025, is expected to provide a forward-looking roadmap to support European SMEs navigating China’s complex business landscape.

Drawing on insights from recent consultations and surveys, the forthcoming publication will likely emphasize measures to strengthen financial access, regulatory clarity, operational resilience, and competitiveness.

Enhancing financial accessibility

Securing affordable and reliable financing remains a critical hurdle for smaller European companies in China. The Position Paper is expected to call for targeted programs that facilitate SME lending, streamline access to government incentives, and improve cross-border funding mechanisms. Such initiatives would help companies maintain liquidity, fund growth, and invest in innovation.

Simplifying regulatory and administrative processes

European SMEs often face cumbersome administrative requirements and opaque regulations. Recommendations are likely to focus on improving transparency, reducing duplication in licensing and approval procedures, and fostering consistent enforcement across regions. By clarifying regulatory expectations, SMEs could better plan operations and navigate compliance with greater confidence.

Supporting cashflow and payment practices

Unpredictable payment terms and delays can strain SME operations. The upcoming Position Paper may advocate for frameworks that encourage fair payment practices and promote timely settlements, particularly in business-to-business transactions, ensuring SMEs can allocate resources efficiently and reduce financial risk.

Strengthening IPR

Protecting proprietary technology and brand assets remains essential for SMEs, particularly in innovation-driven sectors. Recommendations are expected to highlight measures that simplify IP registration, enhance enforcement mechanisms, and support companies in addressing counterfeiting and infringement, helping to secure competitive advantage in China’s dynamic market.

Fostering a level playing field and talent access

The Position Paper is likely to underline the importance of creating fair opportunities for SMEs alongside domestic competitors, including access to procurement, financing, and talent. Policies that facilitate workforce mobility, provide supportive infrastructure, and encourage skills development will be crucial for sustaining innovation and operational excellence.

Is China still a worthy market for EU SMEs?

Short answer is: Yes — but only for those that know where they belong. Amid mounting challenges, ranging from regulatory complexities and economic slowdown to fierce competition from domestic players, China is no longer a catch-all growth engine for European SMEs—it demands a more nuanced and strategy-driven approach. Rewards will go to companies that play to their strengths, adapt to local realities, and treat China as one part of a wider Asian strategy.

Few drivers of China’s attractiveness for EU SMEs:

• Market size and growth: As the world’s second-largest economy and second-largest healthcare and consumer market, China still expands faster than most advanced economies, even in a slower-growth era.
• Demand for quality: Chinese buyers are moving up the value chain, seeking premium, sustainable, and niche products. This is where EU SMEs excel, from precision machinery and specialty food and beverage to medtech and green solutions.
• Policy push for upgrading: Strategic sectors such as biotech, renewable energy, and advanced manufacturing continue to receive heavy government support, aligning well with European expertise.
• Digital sales channels: Cross-border e-commerce platforms like Tmall Global and JD Worldwide lower entry barriers, allowing SMEs to test the market without committing to full-scale operations.
• Supply chain and RCEP access: China’s role in regional supply chains and its participation in the Regional Comprehensive Economic Partnership (RCEP) enhance connectivity and trade facilitation across Asia, offering EU SMEs broader access through a China base.

Again, China no longer offers a one-size-fits-all solution. The path to success for EU SMEs lies in specializing in high-value or niche sectors, where distinct European expertise can differentiate offerings and mitigate the pressure of mass-market competition.

Localized partner and distributor networks are critical to navigating regulatory hurdles and sustaining market momentum. Additionally, digital-first entry routes, such as cross-border e-commerce and localized online sales platforms, offer a scalable, lower-risk approach to market entry.

In sum, China remains a valuable destination for EU SMEs, but only if approached strategically. Companies that align with niche markets, build the right partnerships, leverage digital routes, and integrate China into a broader Asian or global strategy are likelier to thrive. This isn’t about writing off the market, it’s about recognizing how it must be approached differently today.