BEIJING / LONDON (IT BOLTWISE) – China’s recent economic policy measures, particularly export controls on rare earths, pose significant challenges for European companies. These raw materials are essential for many industries in Europe, but dependence on China is increasingly perceived as a risk. The EU Chamber warns of the long-term consequences and calls for a strategic realignment.
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China’s economic policy decisions, particularly the introduction of export controls on rare earths, have caused concern among European companies. These raw materials are essential for numerous industries in Europe, including the automotive and electronics sectors. Dependence on China as a main supplier is increasingly perceived as a strategic risk, which has led the EU Chamber in Beijing to warn of the possible consequences.
Jens Eskelund, President of the EU Chamber in China, stressed that dependence on Chinese raw materials could put Europe in a precarious position. Particularly in the context of the trade dispute between China and the USA, it becomes clear that economic relations can quickly become security policy issues. The recent tensions surrounding the Dutch company Nexperia, which processes chips in China, highlight the potential risks for the European industry.
The EU Chamber’s report highlights that China, as the world’s only “manufacturing superpower”, plays a dominant role in global supply chains. European companies face the challenge of balancing the benefits of Chinese manufacturing capabilities against the need to make their supply chains more resilient and flexible. The export controls introduced in April have caused many companies to rethink their strategies and seek alternative suppliers.
Some companies have already started adjusting their supply chains by building more inventory and relying on multiple suppliers. However, these measures are associated with higher costs and are not always practical, especially when alternative inputs come from countries such as the USA, with which China also has trade conflicts. The EU Chamber sees these developments as a wake-up call for Europe to strengthen its economic independence and diversify strategic partnerships.
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