China export controls push European firms to move supply chains.
China’s tightening export controls are pushing European firms to explore new supply chain capacity outside of the world’s second-largest economy, a European lobbying group said on Monday, seeking cover from the U.S.-China trade war.
The European Union Chamber of Commerce in China said one in three member companies was looking to shift sourcing away from China due to Beijing’s export control regime, with 40% of its flash survey’s respondents reporting that the commerce ministry is processing export licences more slowly than promised.
“China’s export controls have increased the uncertainty felt by European businesses operating in the country, with companies facing the risks of production slowdowns or even stoppages,” said Jens Eskelund, the chamber’s president.
The curbs have “added more pressure to a global trade system that was already under a great deal of stress,” he added.
Some 130 companies participated in the survey, the chamber said, which counts German automakers BMW and Volkswagen, Finnish telecommunications maker Nokia and French oil major TotalEnergies as members.
Nearly 70% of respondents to the chamber’s flash survey said their overseas production facilities depended on Chinese components covered by the export control regime, while 50% of exporting firms reported that their suppliers or customers made goods that were subject to the controls or would be soon.
EU firms said that the commerce ministry’s licence-application process was taking longer than the promised 45 days, with respondents also taking issue with its lack of transparency and disclosure requirements. They also raised concerns about potential intellectual property theft.
The survey also provided redacted examples of firms that were impacted by Beijing’s export controls, including one that estimated the measures would lead to costs totalling 20% of its global revenue this year, while another said it expected to incur costs in excess of 250 million euros ($289.8 million).
Source: msn