China’s tightening export controls are pushing European firms to explore new supply chain capacity outside of the world’s second-largest economy, a European lobbying group said on Monday, seeking cover from the U.S.-China trade war. The European Union Chamber of Commerce in China said one in three member companies was looking to shift sourcing away from China due to Beijing’s export control regime, with 40% of its flash survey’s respondents reporting that the commerce ministry is processing export licences more slowly than promised. “China’s export controls have increased the uncertainty felt by European businesses operating in the country, with companies facing the risks of production slowdowns or even stoppages,” said Jens Eskelund, the chamber’s president. The curbs have “added more pressure to a global trade system that was already under a great deal of stress,” he added. Some 130 companies participated in the survey, the chamber said, which counts German automakers BMW and Volkswagen, Finnish telecommunications maker Nokia and French oil major TotalEnergies as members.

Full report : 1 in 3 European firms in China hit by export controls plan to divert sourcing.