Not just business: EU firms in China aim to de-risk as they reassess ‘how many eggs to keep’ there
- Business-confidence survey among European Union Chamber of Commerce members in China shows a record-low share of firms planning to expand this year
- But which two countries are the top choices for new Asia headquarters among the EU firms that have moved or plan to move from China?
Supply-chain relocations away from China are gaining momentum, and the shift reflects how foreign investors’ confidence in the Chinese market is waning while the allure of the Asean markets is rising, according to fresh findings by a leading European trade association.
The latest business-confidence survey by the European Union Chamber of Commerce in China shows that 11 per cent of surveyed members have already moved some investments out of China, and that a record-low number of firms are planning to expand in the world’s second-largest economy this year.
“Investments begin to shift out of China as de-risking strategies emerge,” says the chamber’s latest report, released on Wednesday and based on a poll of 570 companies between February and May – a 46 per cent response rate.
Faced with growing risks and a more volatile operating environment, European companies are still reassessing how many eggs to keep in their China basket
The latest report also says that a further 20 per cent are either considering shifting investment elsewhere or postponing any such decisions as they wait to see how China’s business environment evolves in 2023.
“Faced with growing risks and a more volatile operating environment, European companies are still reassessing how many eggs to keep in their China basket,” the report says.
Members of the Association of Southeast Asian Nations (Asean) are set to be the main destinations in supply-chain relocations, followed by the European market, as the two markets account for 48 per cent of relocation plans, according to the report.