European businesses are increasingly shifting their supply chains away from China as Beijing’s export control measures undermine confidence in the country as a reliable trading partner, according to a comprehensive new survey released by the European Union Chamber of Commerce in China.
The flash survey, published on December 1st and completed by 131 member companies, paints a stark picture of deteriorating business confidence. A significant majority of 75 companies—representing 57 percent of respondents—reported that they expect to be impacted by, or have already felt the effects of, Chinese export controls on their operations.
Perhaps most concerning for Beijing’s economic prospects, more than one in three of these affected companies (36 percent) indicated they are actively planning to collaborate with suppliers to develop manufacturing capacity outside of China. This strategic pivot represents a potential blow to China’s position as the world’s manufacturing hub and could have far-reaching implications for both economies.
The survey results underscore growing tensions in EU-China trade relations, as European businesses grapple with increasing regulatory uncertainty. Export controls, which Beijing has implemented across various sectors including technology and critical materials, are being viewed by European companies as a significant risk factor that could disrupt their global supply chains.
This shift in business sentiment comes at a time when China is already facing economic headwinds and increased competition from other manufacturing destinations. The European Chamber’s findings suggest that Beijing’s use of export controls as a policy tool may be backfiring by encouraging the very supply chain diversification that Chinese officials have previously warned against.
The survey responses indicate that European companies are not merely expressing concerns but are taking concrete steps to reduce their dependence on Chinese suppliers. This trend could accelerate the “friend-shoring” movement, where businesses prioritize supply chain partners in politically stable and aligned countries over purely cost-based considerations.
For European businesses, the message appears clear: while China remains an important market and manufacturing base, the increasing unpredictability of export controls is forcing a fundamental reassessment of risk management strategies. The survey suggests that reliability and regulatory predictability are becoming just as important as cost competitiveness in sourcing decisions.
