European companies double down on China manufacturing despite EU de-risking push

European manufacturers continue expanding production and supply chains in China despite EU policy signals to de-risk semiconductor and critical supply chains. Cost advantages and automation investments in Chinese factories are outweighing geopolitical hedging, even as the EU ramps up FDI screening and subsidy programs for onshore fabrication.

The divergence underscores the difficulty of engineering supply chain resilience when cost arbitrage and existing factory footprints in China remain decisive for margin-constrained businesses — and hints at potential friction between EU strategic autonomy goals and private-sector economics.