European firms in China are overly focused on managing risks instead of increasing market share, which is hurting efficiency and innovation and increasing costs for consumers, a European business lobby group warned on Wednesday, reports Reuters. The European Chamber of Commerce said in its de-risking report that companies were “skewed disproportionately towards risk management and building resilience” because of the COVID pandemic, global economic slowdown, Ukraine war and US-China geopolitical competition.
The EU has found itself dependent on China for certain products including critical minerals, and has begun closer scrutiny of foreign investments and strategic tech exports to rivals such as China. Brussels maintains that de-risking is different from decoupling from China.
About three-quarters of the chamber’s members have reviewed their supply chains in the past year, with 21% moving more production into China and 12% moving more out, Jens Eskelund, president of the European Chamber of Commerce in China, briefed reporters ahead of the report’s launch.