That is according to the European Union Chamber of Commerce in China. The chamber’s president, Jens Eskelund, made the remarks ahead of a report launch on supply chain risks, as businesses look ahead after a tumultuous 2025.
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“Dependencies are being discussed in much more detail than they were before … Are we even sure Europe can manufacture toothpaste without ingredients sourced in China?” Eskelund said.
Reflecting continued global demand, China’s trade surplus for the year through November reached a record $1 trillion, according to official figures. A weak Chinese currency and domestic overproduction contributed to that growth, the chamber said.
“The higher that production goes up, the higher the risk that countries will begin to react,” Eskelund said. He noted China faced a record high of 198 World Trade Organization trade investigations last year.
The chamber recommended members “eliminate single-source dependencies” on the U.S. and China, and called on EU policymakers to “accelerate plans to identify and eliminate critical dependencies.” Eskelund said the stakes for businesses and governments are far higher now compared to during the Covid-19 pandemic.
“Thats actually a big shift, from youre concerned primarily about whether you have a supply chain that can physically deliver the product, and then whether your supply chain is dependent on a certain government position,” he said.
As tensions between the U.S. and Beijing rose over tariffs and trade barriers this year, Beijing ramped up export controls, including on critical rare earths. A survey in November of 131 chamber members found about a third planned to look outside China for supplies or developing capacity.
This marks a change from earlier in the year, when a member survey found a record 73% said doing business in China had become more difficult, but only 10% were looking at supply chains outside China.
Cameron Johnson, a senior partner at Tidalwave Solutions, said, “The reality is nobody is reshoring its all friendshoring. Theyre going to Mexico, theyre going to Southeast Asia.” He added, “You should expect Chinese supply chains to become more dominant,” with Chinese firms potentially partnering with or setting up overseas factories.
The EU trade body said about half of its members reported their China-based suppliers were now shifting production to other markets. Eskelund pointed out that car companies from different countries, increasingly including China, have taken this approach.
