Against the backdrop of the COVID-19 pandemic, which had a shocking impact on the global economy, the EU, following the United States, launched an offensive against China’s economic expansion and stepped up efforts to focus production at or closer to its borders. However, the vast majority of national companies (over 80 percent) are not ready to reorient production to other markets, as this can be detrimental, writes Bloomberg.
So, according to the founder of the Italian shoe brand Baldinini Jimmy Baldinini, the company uses a factory in Shenzhen, China, to reduce sporting goods, which reduces costs by 75 percent. Production can only be rescheduled if the Italian government reduces taxes and labor costs.
The European Union initiative covers a wide range of issues. The development strategy of the pharmaceutical sector is a priority. According to the German company Stada Arzneimittel AG, China produces about 40 percent of the active pharmaceutical ingredients. Therefore, according to Bloomberg, ensuring strategic autonomy in this area will not be easy for the EU.
Difficulties also persist in the automotive industry, especially for Germany, which is the most dependent on global suppliers – they account for 17 percent of production. In particular, the PRC provides about 40 percent of supplies for the German automaker Volkswagen AG. France and Germany decided to join forces and challenge China as a leading manufacturer of electric vehicle batteries. In the coming years, it is planned to invest about 8.2 billion euros.
According to experts, the European economy began to recover gradually from the consequences of the crisis provoked by the coronavirus. The public mood regarding the sphere of employment has significantly improved, however, in a number of sectors the indicators remain 60 percent lower than they were before the epidemic.