Reference News Network, December 4 report: The website of the Financial Times published an article titled "Despite Concerns About Competition, China Still Attracts European Companies" on December 2. The author is Joe Leitch and Ryan McMorris. The article is translated as follows:

Although European political leaders are increasingly concerned about Europe's industrial dependence on China, the world's top export power, European manufacturers are increasing investments in their Chinese factories.

European companies say that China's low-cost advantage and efficient supply chain make it increasingly difficult for European companies to compete with Chinese rivals in the future.

"Now, when there are local competitors in China, exporting products to China no longer has competitiveness," said Konrad von Rott, CEO of Clariant International, a Swiss chemical manufacturer.

Clariant International is investing 180 million Swiss francs (about 1.59 billion yuan - note from this site) to expand its factory located in the Da Ya Wan Petrochemical Center in China. Last year, German company BASF and Dutch company Shell also announced major investments in the area.

"Overall, the dependence of European companies on China is not decreasing but rather increasing. Enterprises around the world are increasingly dependent on China," said Yan Ci, chairman of the China-EU Chamber of Commerce.

A survey conducted by the China-EU Chamber of Commerce this year found that about a quarter of the surveyed companies are moving more production to China, twice the number of companies moving capacity to other countries.

Ronin Consulting said that since 2021, foreign direct investment from EU manufacturing into China has continued to flow in. In the second quarter of last year, greenfield investment by EU companies into China reached a historical high of 3.6 billion euros.

However, what may be more concerning for Europe is that many companies are moving production to China to use it as an export base. The depreciation of the Chinese yuan relative to the euro makes China a much cheaper production base than Europe, while European energy and other costs have risen sharply since the outbreak of the Ukraine war.

"If you want to have a global supply chain and need to maintain cost competitiveness, you will go to places where you can get the most cost-competitive components. For many industries, this is China," said Yan Ci.

At the same time, European companies are cutting jobs, especially in the automotive industry. For example, German carmakers are laying off staff domestically while heavily investing in China's electric vehicle industry.

German automotive parts supplier ZF Friedrichshafen recently announced that it will lay off 7,600 people in Europe by 2030, while less than a year ago, the company announced its latest expansion plan in Shenyang, a city in northeast China. Another automotive parts manufacturer, Schaeffler Group, said that it plans to double its business in China over the next six or seven years. The company has announced that it will close some European operations and lay off a total of about 4,700 people.

Companies such as Schneider Electric Investment Co., Ltd. from France, Danfoss Industrial Co., Ltd., a Danish power system manufacturer, Vestas Wind Systems, a Danish wind turbine manufacturer, as well as pharmaceutical companies such as Roche Pharmaceuticals from Switzerland and AstraZeneca, headquartered in the UK, have recently announced expansion plans or factory upgrade plans in China.

In addition to shifting production to China, Western companies are also deepening their R&D efforts in China. Kim Fausgaard, CEO of Danfoss Industrial Co., Ltd., said that the company is regionalizing production to be closer to customers.

However, Schaeffler Group and ZF Friedrichshafen stated that their expansion in China is aimed at the regional market and does not come at the expense of European jobs.

Woodcock, partner at consulting firm DGA Group and former chairman of the China-EU Chamber of Commerce, said that Europe itself must bear some responsibility for this phenomenon. He said, "Europe first needs to solve its own problems, relax regulations, lower energy prices, improve competitiveness, and enhance education, especially engineering education. These issues cannot be blamed on China." (Translated by Hu Wei)

Original: toutiao.com/article/7579943109174231593/

Statement: This article represents the views of the author alone.