European Firms Deepen China Onshoring to 56% as Supply Chain Costs Tighten Dependence
Updated
Updated · South China Morning Post · Jul 2
European Firms Deepen China Onshoring to 56% as Supply Chain Costs Tighten Dependence
3 articles · Updated · South China Morning Post · Jul 2
Summary
Fifty-six percent of nearly 300 European Chamber members surveyed in January and February said they were increasing onshoring in China, versus just 7% increasing only offshoring.
Jens Eskelund said the shift shows European companies are becoming more reliant on China, not less, because Chinese supply chains are now critical to global production rather than just a profit market.
Cost is driving that dependence: Eskelund said Chinese supply chains have become so competitive that joining them is often the only way to make the best products at the lowest cost.
He warned in Berlin that Europe has fundamentally misread China’s role for its businesses, giving Beijing leverage to raise the costs of confrontation beyond what the other side is willing to bear.
If de-risking from China is failing, what is Europe’s plan B to regain control over its critical supply chains?
How can EU firms obey Western laws when China's new rules can punish them for conducting supply chain audits?
Europe’s €359.9 Billion China Dilemma: Why De-risking Is Harder Than It Looks
Overview
European firms are deepening their engagement with China, even as the European Union pushes for 'de-risking' and reduced economic dependency. This is driven by China's dominant role in global manufacturing—producing about 28% of the world’s goods—and the competitive necessity for European companies to leverage Chinese efficiencies. As rivals also rely on China’s robust supply networks, avoiding China is no longer seen as a viable option for global survival. This ongoing reliance is reflected in the EU’s growing trade deficit with China, highlighting the complex balance between economic opportunity and strategic risk.