At least 70% of European companies operating in China were reviewing their supply chain strategies, reports the South China Morning Post, citing a survey from the European Chamber of Commerce. This comes in response to geopolitical tensions and Beijing’s opaque policymaking, which appears to set back the country’s globalization efforts, according to the survey.
324 corporate entities responded to the survey conducted by the Shanghai chapter of the EuroCham. The survey found that these firms aimed to strike a balance between cost efficiency and risk diversification, while building resilience in their supply chains.
According to Carlo Diego D’Andrea, the chamber’s vice-president in China and chair of its Shanghai chapter, security concerns around Chinese products or components made manufacturing in the country unattractive, particularly in so-called strategic sectors. A growing number of European businesses were setting up two separate supply chain systems—one for China and the other for the rest of the world—to bypass regulatory requirements on data and information technology systems, the chamber said in a report released on Tuesday.