European businesses are redrawing their supply chains amid ingoing uncertainty around China’s expert control  measures.

The European Union Chamber of Commerce in China has published the results of a flash survey on the impact of China’s export control regime. A majority of respondents indicated they had already been or expected to be impacted by China’s export control measures. One respondent estimated that it will result in additional costs equivalent to 20% of its gross global revenue for 2025.

Delivery times for impacted goods have been disrupted, with 40% of respondents indicating that export control approval processes have added upwards of two months to delivery times. A similar proportion (38%) expect ‘significant’ disruptions to their supply chains, or production stoppages or slowdowns, if all of China’s announced export controls are fully implemented, including the measures announced on 9 October.

Forty percent of respondents said that the Chinese Ministry of Commerce’s (MOFCOM’s) export licence approval process exceeded the 45-day timeframe set by the MOFCOM. A lack of transparency in the process was reported by 39% of respondents, while just over one in five (21%) noted that application requirements lack clarity.

Actions taken in response vary among respondents, many of whom are still in the process of developing effective mitigation strategies. However, although 43% of respondents are yet to take a decision about how to respond to China’s export controls, 36% intend to work with suppliers to develop more capacity outside of the country.

“China’s export controls have increased the uncertainty felt by European businesses operating in the country, with companies facing risks of production slowdowns or even stoppages,” said Jens Eskelund, president of the European Union Chamber of Commerce in China. “They have also prompted strong responses from China’s trading partners, which has added more pressure to a global trade system that was already under a great deal of stress.”

Key findings include:

• In all 24% of respondents report manufacturing products in China that already are or will be directly impacted by China’s export controls; and 50% reported that their partners (including suppliers and/or customers) manufacture a product that already is or will be subject to export controls.
• In terms of importers 68% report their overseas production facilities rely on inputs from China that are or will be subject to China’s current export controls, while 32% of respondents have overseas production that will be subject to China’s extraterritorial export controls once introduced.
• Once all of China’s announced export control measures have been implemented, 60% of respondents expect ‘moderate’ or ‘significant’ disruptions to their supply chains. An additional 13% expect to face production stoppages or slowdowns.
• 32% of respondents plan to obtain impacted goods from other markets; and 36% plan to work with suppliers to develop capacity outside of the country.
• 43% are yet to take a decision on how China’s export regime will factor into their future supply chain decisions; 11% report they will be making no change to their supply chains.

“With many companies still deciding how to adjust their China supply chain strategies to alleviate the impact of export controls, there is an opportunity to introduce a sustainable, long-term solution now,” added Stefan Bernhart, vice president of the European Chamber. “Introducing a general licensing mechanism in the near future would provide much needed stability and predictability and could put a floor under the deterioration of business confidence caused by these export controls.”