EU companies in China should ‘prepare for the worst’ in digital decoupling: EUCham

Digital decoupling between China and the United States could severely impact EU businesses in China and they should “prepare for the worst” and may be forced into a costly separation of their international operations, European business groups said, reported Reuters.

While political, trade and financial decoupling are concerning, China-US rivalry in the technology sphere is set to cause the biggest upset, the European Chamber of Commerce in China and MERICS, a Berlin-based think tank, said in a report released on Thursday.

Just as the United States is attempting to purge its networks of Chinese-made software and components, China, which is heavily dependent on imports of semiconductors, is pushing for digital self-reliance, it said. European companies are caught in the middle, reported Reuters.

Chamber president Joerg Wuttke，speaking at a briefing ahead of the report’s launch, warned of a “gathering storm”. Data flows, ICT equipment and digital goods and services would be where decoupling hurts companies the most, he said.