In this articleNIOFollow your favorite stocksCREATE FREE ACCOUNTA member of the Peoples Armed Police stands guard in front of the flag of the European Union at the European Delegation before a press conference by European Commission President Ursula von der Leyen on April 6, 2023 in Beijing, China. Kevin Frayer | Getty Images News | Getty ImagesBEIJING — 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. China accounts for about 28% of goods manufactured globally, despite U.S. and EU tariffs. The bloc is reportedly ramping up its scrutiny of China’s trade practices. The European Commission did not immediately respond to a CNBC request for comment.About 24% of EU chamber members responding to the supply chain question said they were diversifying by both expanding in China and establishing alternative suppliers elsewhere.The shift is also changing how global logistics companies operate.Chinese companies are increasingly taking greater control over overseas supply chains as they expand globally, said Michael Aldwell, executive vice president for sea logistics at Swiss shipping company Kuehne+Nagel.”We see a rising amount of business in our industry that’s controlled, decided, shipped, and paid for here in China,” Aldwell told CNBC’s “Squawk Box Asia.” These sectors include electric vehicles, batteries and consumer electronics, he added.”We basically see this trend where when the China-based supply chain management organization is more mature than the destination market, or where you’ve got rapid change in an industry, the Chinese companies are choosing to take control over that supply chain.”Automation lowers costsCost is one of the main reasons European companies are increasing production in China, the EU Chamber survey found.Relatively low labor costs in China …
