European companies are cutting costs and scaling back investment plans in China as the economy slows and fierce competition drives down prices.

A European business group says China must reprioritize economic growth and reforms and boost investor confidence by leveling the playing field for all companies in the country.

An annual survey of more than 500 European companies has found that slowing growth in China is weighing on company plans to expand their businesses in the world’s second largest economy.

A report by a European business group says that uncertainty and “draconian regulations” have drastically raised risks for foreign businesses in China.

The European Union’s trade commissioner has called for a more balanced relationship with China, noting an EU trade deficit of nearly 400 billion euros ($425 billion).

A business group says foreign companies are shifting investment and their Asian headquarters out of China as confidence plunges following the expansion of an anti-spying law and other challenges.