【Epoch Times News, December 2, 2025】During ongoing tensions in US-China relations and Beijing tightening export controls, some multinational corporations have begun reevaluating their production and supply configurations in China. According to a recent rapid survey released by the China-EU Chamber of Commerce, some European companies have started looking for procurement and supply sources outside of China. Several interviewees mentioned that export restrictions on rare earth materials and key components have forced companies to adjust their existing production arrangements and layouts.
Reuters reported that over 70% of surveyed companies rely on materials or components provided by China for their overseas production facilities, while 32% plan to source from other regions and 36% have already started seeking new partners. The Chamber of Commerce highlighted that over-reliance on a single source exposes companies to greater uncertainty when export controls change.
The survey also indicated that some companies are considering shifting parts of their business to other markets, especially in areas such as metals, magnets, and crucial components affected by Chinese export restrictions.
Mr. Zhou, the head of a foreign-funded enterprise in the Pearl River Delta of Guangdong, pointed out in an interview with Epoch Times that the proportions from the Chamber’s survey indicate supply chains are adjusting, but the degree of dependency varies between industries. He stated, “Not only businesses from the EU Chamber, but also members of the US Chamber are changing their investment strategies in China. The main reason being the tense US-China relations, coupled with poor policy transparency.”
Mr. Zhou believes that the 32% and 36% mentioned in the survey show companies are exploring new directions, but a large-scale relocation is still at a distance. He said, “Foreign companies are most concerned about dealing with aspects related to China (CCP). Policy changes in recent years have been too rapid, making approvals, supply cycles, and border regulations hard to grasp. I recently heard that some foreign companies wanting to purchase materials classified as ‘sensitive’ by China (CCP) are also starting to face restrictions.”
Jens Eskelund, the Chairman of the China-EU Chamber of Commerce, stated that delays in approvals due to export controls are among the most common challenges companies face in China. Some companies have reported that export permit approvals may take longer than the official promised timelines, disrupting production schedules and leading to temporary shutdowns. The Chamber noted that the difficulties companies face are not in the controls themselves but in the speed of approvals, document requirements, and lack of transparency.
This year, China tightened export controls on rare earths and magnetic products again, drawing high attention from the European manufacturing industry. Rare earth magnets are essential materials for manufacturing electric cars, electronic devices, and energy facilities, with European car manufacturers highly reliant on the Chinese market. Reuters reported that several European automotive supply chain companies are concerned about tight supplies, hence seeking alternative sources in advance.
Mr. Zhou mentioned that rumors of “BMW and Volkswagen ceasing production due to controls” lack public evidence, but companies do face risks of downtime due to prolonged approval times. He said, “The key is that the Chinese side will scrutinize the intended use of materials you purchase, be it processing, refining, or where they will be used, and the application needs to be detailed. Supplies can be halted at any time.”
In Jiangsu, Mr. Lin, engaged in international trade, stated that his company recently received notifications from upstream suppliers that delivery cycles for rare earth magnets and special metals would be delayed due to export approvals. “Previously, we could still transit to Europe via Hong Kong, Malaysia, but now this route is blocked by customs. The ports and warehouses are thoroughly inspected.”
Mr. Lin mentioned that some companies have tried to discreetly move their stock of rare earths out, only to be caught and fined millions. “For European buyers, the issue is not the shortage of goods but rather uncertainty on when they will be cleared for release. This poses a significant risk to foreign companies.”
He explained that foreign companies initially relied on precise scheduling, but the time variations caused by export controls make scheduling increasingly challenging. Companies are starting to increase safety stocks and view Southeast Asia as a potential alternative option.
US Commerce Secretary Gina Raimondo recently stated in an interview with the Financial Times that China’s export restrictions are making global companies more aware of the risks of relying on a single source. She expressed that the US is cooperating with allied nations to establish supply chains for rare earths and critical minerals that do not depend on China.
Ms. Liu from Beijing’s foreign trade and economic industry said, “Some foreign companies complain about the low transparency of (CCP) export approvals, putting significant pressure on production schedules. But we cannot control how policies are set; export approvals are like squeezing toothpaste. It’s only a matter of time before foreign companies find new supply chains.”
Mr. Lin added that what companies fear is the unpredictable pace of approvals, “Everyone is afraid that processes might suddenly change, more documents might be required, or approval periods might unexpectedly lengthen.”
Analysts point out that European companies’ adjustments lean towards “de-risking,” taking diversified procurement, reducing reliance, and increasing stability in planning. Research institutions believe that supply chain adjustments will continue for some time and may alter the global manufacturing industry distribution.