European firms remain unprepared for a possible China supply shock
While the EU pushes to reduce its economic reliance on China, most European businesses have made little progress in stockpiling goods or diversifying their suppliers, industry experts warn.
The European Union's efforts to cut its economic dependence on China are running into a practical obstacle: companies themselves are not adapting fast enough. A China specialist told POLITICO it is striking how few European businesses have recently taken steps to build up inventories or seek alternative suppliers outside China.
This leaves companies exposed should trade tensions between the EU and China escalate, or should a disruption hit any strategically important sector. European policymakers have spoken for years about the need to reduce dependence on China for critical raw materials, components and technology, yet the actual pace of change within businesses appears slower than EU institutions would like.
Why it matters
Diversifying supply chains and building reserves are generally seen as basic precautions when geopolitical tension between major powers is rising. If European companies continue to rely heavily on a single source of supply, any unexpected shock — whether a political decision, sanctions, or a logistics crisis — could have serious consequences for the wider EU economy.
The expert's criticism points to a persistent gap between the EU's political rhetoric on "de-risking" from China and the actual behavior of companies on the ground. That suggests the resilience of the European economy against potential disruptions originating from China remains uncertain, despite Brussels' ongoing efforts to change the picture.
