Steam cracker items on the BASF Zhanjiang Verbund website in Zhanjiang, Guangdong province, China, on Thursday, March 26, 2026.
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BEIJING — Extra European firms are sustaining or increasing their provide chains in mainland China to stay aggressive globally, in line with a survey launched Wednesday by the European Union Chamber of Commerce in China.
Practically one-third of respondents stated they had been onshoring additional in China, whereas 37% stated that they had not modified their provide chain technique during the last two years, the report stated.
The survey was based mostly on responses from almost 300 members collected from January to February who had been acquainted with their firms’ mainland China provide chain methods.
In whole, 68% of respondents stated they had been both staying or increasing operations in China. By comparability, solely 7% stated they had been transferring manufacturing facility sourcing outdoors the nation or organising various manufacturing bases elsewhere, the report stated.
“We do not see kind of de-risking changing into a theme,” stated Jens Eskelund, President of the EU Chamber of Commerce in China.
“If something it will point out that European firms proceed to be extra depending on China as a sourcing and manufacturing location for his or her merchandise,” he stated.
Automation lowers prices
Price is among the foremost causes European firms are rising manufacturing in China, the EU Chamber survey discovered.
Comparatively low labor prices in China have helped energy its function as a worldwide manufacturing hub. However as factories face labor shortages, many have embraced automation — rapidly.
“The price of labor, which is likely to be decrease anyway, is changing into irrelevant itself, as a result of [of] automation,” stated Denis Depoux, senior associate, world managing director at Roland Berger, a consulting agency that helped the EU Chamber assemble the survey.
“The distinction within the stage of automation [versus] two years in the past is mind-boggling. You do not see anyone anymore,” he stated, referring to his go to this week to a privately-owned Chinese language copper manufacturing firm.
Depoux added that whereas automation can initially value greater than human labor, factories can in the end produce merchandise extra rapidly.
For instance, Chinese language electrical car maker Nio, which has expanded into Europe, stated one in all its factories in China operates with 941 robots that may work totally autonomously throughout a number of car fashions concurrently — with out employees on the manufacturing flooring. That setup permits the manufacturing facility to function across the clock.
It is all a part of an area manufacturing ecosystem with entry to decrease industrial power costs and uncooked materials prices, Roland Berger identified in a March report titled “China’s value and velocity benefit: A wake-up name for Western firms.”
The report added that quarterly negotiations with suppliers on value and selective state subsidies typically assist Chinese language merchandise attain world markets earlier and at far decrease prices.
About three-fourths of EU firms in China stated their manufacturing amenities within the nation had been extra environment friendly than operations elsewhere, the chamber’s survey discovered.
“In most industries at the moment, you’ve gotten a minimum of one Chinese language competitor, or a world competitor, which are leveraging Chinese language provide chains,” Eskelund stated.
“So I feel in lots of industries, if you’ll be able to compete on value and high quality, you merely must turn into part of Chinese language provide chains,” he stated. “It isn’t essentially since you need to onshore on [to] China.”