The results of the 2020 report of the Polish Economic Institute predict that by the end of 2030 there will be at least a partial transfer of production from Asia to Poland and other countries of the region. Experts estimate that Poland may annually gain up to USD 8 billion from this. What influences plans to move production from China to Europe?
The pandemic has weakened China’s economy.
Locally recurring coronavirus epidemics and related lockdowns weaken the development prospects for the world’s second largest economy. For this reason, nearly a quarter of European companies operating in China are considering relocating their investments outside the country.
According to a report published by the European Union Chamber of Commerce in China, around 23 percent of companies that responded to the survey are thinking of moving their current or planned investments out of China. The survey was conducted at the end of April 2022, while the Shanghai lockdown and restrictions related to the epidemic disrupted business operations.
Foreign companies felt the effects of the Covid restrictions much more strongly: industrial companies operating in China in the period from January to April 2022 recorded a decrease in profit by 16.2 percent. The sector of private Chinese companies also faced a loss of 0.6 percent.
On the other hand, state-owned enterprises recorded an increase in profits of 13.9 percent during this time. To sum things up, the crisis caused by the COVID-19 pandemic plays a key role in making the decision to relocate production from China to Europe. Strict restrictions and a lockdown were introduced in China, which resulted in stopping work in factories and at the same time disrupting global supply chains. All of this has caused major disruptions to world trade. After the pandemic, there was also an increase in production and supply prices.
This trend is also confirmed by the Bank of America Report. The pandemic has disrupted supply chains in 80% of sectors, thus forcing 75 percent companies to take steps to consider relocating production. The pandemic and the resulting crisis have thus proved how important
it is for many companies and countries to become economically independent of China.
Why is Poland an attractive place to move production to from China?
First of all, belonging to the European market and Schengen zones makes Poland attractive due to logistics and timely delivery. The transfer of production from China to Poland and other Central European countries also allows for a much faster response to market changes, as well as to customer needs and changing trends. This gives the opportunity to supply the necessary products to specific factories located in Europe much faster. In addition, production in European countries allows us to maintain the highest standards, confirmed by appropriate safety certificates of manufactured products.
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