European buyers are seeking to reduce their dependence on China, sourcing executives say, as Brussels increases scrutiny of goods from the world’s largest export economy Financial Times said, Ednews informs.

“The big trend right now is for companies to reduce their dependence on China,” said Richard Laub, chief executive of Belgium-based Dragon Sourcing, adding that while the US had taken the lead in decoupling European countries stepped up efforts to look for alternatives since the end of the pandemic. “What I’m seeing now is the EU catching up on that trend as well.”

But unlike US companies, which have aggressively sought new suppliers following Washington’s imposition of a stringent regime of tariffs and other restrictions, Europeans are focused on reducing their dependence in specific areas where they believe they have become over-reliant on Chinese goods.

European customers were increasingly concerned about their exposure to China, especially those in non-food retail industries, a category that includes everything from garments and appliances to consumer electronics and toys, Laub said, estimating that the country accounted for 80-90 percent of sourcing spend for some of the continent’s larger groups.

“Non-food [is] very, very dependent on China . . . Those types of companies in Europe are pushing hard to look for alternatives,” he added.

“A lot of the European countries, you know, may not have any problems working with China, but they think that if China’s going to be impacted, OK, they better also think about how it’s going to affect them,” said William Fung, deputy chair of Fung Group, which controls Li & Fung, one of the world’s largest sourcing groups by revenue.

“As a result, there will be more diversification away from China, even though China may be the most optimal place, you know, you can’t afford to be optimal and wrong,” he added.

He added that it was part of a global push. “Customers are saying that, I don’t care what you do William, just get me to 30 percent outside of China, and sometimes even more. Some have even said that I want to be completely out of China,” he told reporters last month.

Naveen Jha, who runs a clothing and textiles sourcing business from eastern China’s Changzhou, said that European businesses were sourcing an increasing share of their garments from India, Bangladesh and Vietnam, despite incurring longer lead times and higher costs.

“Many of the buyers feel a risk in procuring from China. So if the price has a little bit of room they prefer to go to India,” he said.

European companies have benefited from the price competitiveness of Chinese goods as US buyers have looked elsewhere, said Frederic Neumann, chief Asia economist at HSBC.

But even so, he added, companies in certain chemicals, pharmaceuticals and electronics businesses are looking to reduce their China dependence.

Analysts cautioned that the push to de-risk was unlikely to hit China’s overall exports too severely, pointing to increased shipments to Chinese-built factories in alternative overseas manufacturing hubs such as Vietnam and Mexico, and the increased competitiveness of domestically produced goods.

The appeal of the Chinese production base will also complicate efforts to find new suppliers, they add, with certain products, particularly the more complex ones, very difficult to source outside the country.