14.01.2021

New study: Decoupling does not equal diversification

“We are in China for China!” says the president of the European Chamber of Commerce China (EUCCC) Jörg Wuttke and emphasises that there is no intention for the European businesses to leave China and pack up the locations to relocate those to other countries: The today published joint report by the EUCCC and the Mercator Institute for China Studies (MERICS) is a wake-up call to all European industry and businesses operating in China.

It covers four main themes of decoupling broken down into nine sectors focussing on the current and potential cost of decoupling:

  • macro decoupling (political and financial),
  • trade decoupling (supply chains and critical inputs),
  • innovation decoupling (standards and research and development) and
  • data and networks decoupling (data, network equipment and telecommunications services).

Even if the discussion on decoupling started years ago, not only with the Trump administration and the current Covid-19 pandemic, which can both be named catalyst, this study is an important contribution to raise more awareness and to deepen the understanding of the challenges and also opportunities arising in China today. It is highly concerning that many companies weaken to look at the situation from a broader perspective. This comprehensive report covers details and highlights also two of our major concerns which is when it comes to standards and data. This study sets a perfect basis to further continue and deepen the discussion on decoupling in politics and industry and to understand that decoupling does not mean diversification but is patchwork.

ZVEI supports its members with the multi-layered activities from the ZVEI China Affairs team as well as the newly established ZVEI China Coordination Committee and with EuropElectro which is on the ground in Beijing since 2007.

 

The full report is available for download here: Decoupling: Severed Ties and Patchwork Globalisation

We would also like to draw attention to the MERICS Forecast on China 2021