In the context of
intensifying economic nationalism and the geopoliticization of trade and
investment policies, a large number of initiatives across the European Union
have been introduced to ‘de-risk’ from China by incentivizing companies to pull
back and bring production back to Europe. While such policies and their efforts
to counter China’s dominance in supply chains have garnered much attention,
little beyond anecdotal evidence is known about whether – and to what extent –
European firms are responding to these calls. This paper sheds light on this
dynamic and analyses the ownership structure of European automotive firms in
China over a fifteen-year period (2008–2023) using original firm-level data. It
finds that the largest European firms have largely maintained steady ownership
levels in Chinese enterprises, with minimal evidence of significant divestment.
These findings underscore the stability of European firms’ investment
strategies during this period that covers the Great Financial Crisis and the
aftermath of Covid-19, shedding light on the interplay between geopolitics and
firms’ strategic decisionmaking in an era of increasing unilateralism.