Key facts
- European companies are largely unprepared for geopolitical shocks, according to a Bertelsmann Stiftung survey.
- Only 10% of surveyed firms have taken concrete steps to prepare for a Taiwan contingency.
- Just 24% of companies plan to reduce reliance on Chinese suppliers.
- Nearly one-third of respondents reported negative effects from U.S.-China trade and tech restrictions.
- The EU is preparing a diversification instrument to reduce dependence on single suppliers.
European companies are largely unprepared for geopolitical shocks, despite awareness of the risks, according to a new Bertelsmann Stiftung survey seen by POLITICO. The survey, which polled 228 companies operating in Europe, revealed that while businesses recognize the potential impact of geopolitical events, relatively few are actively preparing for future disruptions.
Russia's war in Ukraine has already affected or is expected to affect 81% of respondents. However, only 10% have taken concrete steps to prepare for a similar contingency involving Taiwan, with a significant majority (59%) having made no preparations or plans to do so. Jacob Gunter, a co-author of the study and China expert at the Mercator Institute for China Studies, expressed concern over this lack of action, stating that companies have a clear example of geopolitical disruption but have not acted sufficiently upon it.
The vulnerability extends to dependencies on China. Only 24% of surveyed companies plan to reduce their reliance on Chinese suppliers, and approximately one-third are considering strategic stockpiles of critical raw materials, despite China's history of export controls on items like rare earths. Gunter described this as "quite shocking."
Nearly one-third of the surveyed firms reported negative impacts from U.S.-China trade and tech restrictions, a figure that rises to around half for companies operating within China. The upcoming meeting between U.S. President Donald Trump and Chinese leader Xi Jinping is expected to address suspended Chinese export controls, though Cora Jungbluth, a China expert at Bertelsmann Stiftung, expressed doubt about the EU's influence in such negotiations.
In response to these challenges, Brussels is developing a diversification instrument aimed at reducing reliance on single suppliers and bolstering supply chains, while also addressing a substantial goods trade deficit with China. EU Trade Commissioner Maroš Šefčovič is scheduled to visit Beijing in October, with potential countermeasures being considered if discussions prove unfruitful.