European companies double down on China manufacturing despite EU de-risking push

Steam cracker units at the BASF Zhanjiang Verbund site in Zhanjiang, Guangdong province, China, on Thursday, March 26, 2026. Bloomberg | Bloomberg | BEIJING — More European companies are maintaining or expanding their supply chains in mainland China to remain competitive globally, according to a survey released Wednesday by the European Union Chamber of Commerce in China. Nearly one-third of respondents said they were onshoring further in China, while 37% said they had not changed their supply chain strategy over the last two years, the report said. The survey was based on responses from nearly 300 members collected from January to February who were familiar with their companies' mainland China supply chain strategies. In total, 68% of respondents said they were either staying or expanding operations in China. By comparison, only 7% said they were moving factory sourcing outside the country or setting up alternative manufacturing bases elsewhere, the report said. "We don't see sort of de-risking becoming a theme," said Jens Eskelund, President of the EU Chamber of Commerce in China. "If anything it would indicate that European companies continue to be more dependent on China as a sourcing and manufacturing location for their products," he said. Automation lowers costs Cost is one of the main reasons European companies are increasing production in China, the EU Chamber survey found. Relatively low labor costs in China have helped power its role as a global manufacturing hub. …