Europe is facing a real economic threat: China is halting battery supplies, container ships are stalled at ports, factories are shutting down due to part shortages, and workers are being laid off en masse. Thirty years ago, this scenario seemed improbable, but today it is a documented reality.
According to German publication Die Welt, German companies are moving their accounting, IT, and HR departments to India. Previously, only manufacturing was relocated; now, even intellectual hubs are making the move, resulting in layoffs of highly qualified European specialists.
Europe, once a leader of the industrial revolution, now finds itself dependent on Asia. The root causes trace back decades: from the 1970s, the West began viewing China as an economic partner, leveraging cheap labor and tax incentives to make large-scale investments that turned China into the world’s factory.
European corporations relocated factories to China, benefitting from lower costs and increased profits, while overlooking the importance of strategic independence. This allowed China to advance technologically, create domestic brands, and accumulate expertise. Meanwhile, Europe’s share of manufacturing in GDP declined, and dependency on imported components rose.
The result was deindustrialization: loss of technology, expertise, and the internal production ecosystem. Offshoring production meant handing over know-how and losing alternatives, with rising economic risks becoming increasingly apparent.
In recent years, Europe has faced several challenges: an innovation gap, dependency on China, and high energy costs. Addressing these issues requires massive investment, but there is no agreement within Europe on financing solutions.
Some companies seek a solution by turning to India, viewing it as a democratic counterweight to China. However, India itself is reliant on Chinese components, and its workforce is generally less productive, meaning strategic autonomy remains elusive.
European firms continue to lose expertise, as new industry leaders emerge in Asia. The situation with China could repeat with India unless policy changes are made. Europe could have protected strategic industries, strengthened capital markets, and preserved trusted brands, but instead, regulations and social spending hampered industrial growth.
Solving the problem requires investment diversification, business support, and development of strategic partnerships. The lesson is clear: economic decisions must consider political factors. Europe now seeks ways out of this crisis, but regaining strategic autonomy remains a complex challenge.
