A recent survey by the European Union Chamber of Commerce in China reveals that a significant portion of European companies are maintaining or expanding their supply chains in mainland China, counter to the European Union's push for de-risking from China [1]. Nearly one-third of respondents indicated they were increasing their onshoring activities in China, while 37% reported no change in their supply chain strategies over the past two years [1]. In total, 68% of surveyed companies are either staying or expanding operations in China, compared to only 7% who are moving factory sourcing outside the country or establishing alternative manufacturing bases elsewhere [1].
Jens Eskelund, President of the EU Chamber of Commerce in China, stated, "We don't see sort of de-risking becoming a theme," emphasizing that European companies appear to be increasingly dependent on China for sourcing and manufacturing [1]. The survey, which included responses from nearly 300 members familiar with their companies' China supply chain strategies, also found that about 24% are diversifying by both expanding in China and establishing alternative suppliers elsewhere [1].
Cost competitiveness remains a primary driver for this trend. The survey highlights that relatively low labor costs and rapid adoption of automation in Chinese factories are making production more efficient and cost-effective for European firms [1]. Denis Depoux, senior partner at Roland Berger, noted that automation has reached a level where labor costs are becoming less relevant, with factories able to operate around the clock with minimal human intervention [1]. For instance, Nio, a Chinese electric vehicle manufacturer, operates a factory with 941 robots capable of fully autonomous production across multiple vehicle models [1].
Despite ongoing U.S. and EU tariffs and increased scrutiny of China's trade practices by the European Commission, China continues to account for about 28% of global goods manufacturing [1]. The European Commission did not immediately respond to requests for comment on the survey findings [1].
CONCLUSION
The survey indicates that European companies are deepening their manufacturing ties with China, driven by cost advantages and advanced automation, despite political pressures to diversify supply chains. This trend suggests continued reliance on China as a key manufacturing hub, with limited immediate impact from EU de-risking initiatives.