Euro firms look to China, says Deloitte

A global manufacturing benchmark study carried out by Deloitte has found that one-third of Western European companies currently make goods in countries other than their main base.

The survey singled out China as the increasingly likely location as a base for future manufacturing.

The survey results have been issued on the eve of the first visit to Ireland by Chinese Premier Wen Jiabao, aimed at strengthening business relationships between Ireland and China.

"Against the general expectation in Ireland, China is an even bigger competitor for manufacturing jobs than the new EU accession countries of Eastern Europe," states David Hearn of Deloitte.

"Some 31% of Western European manufacturers say they will locate or expand factories in China as opposed to 27% for Eastern Europe."

"Increasingly, we are no longer seen as low cost and therefore our imperative must be to lead the world in productivity while attracting the 'crown jewels' of added value activities such as research and development and product engineering," Hearn said.

In terms of new markets, the survey highlights that Western European companies are targeting Eastern and Central European countries (three out of every five respondents), with a smaller number targeting China (two out of every five respondents).

This Deloitte research is based on an in-depth survey of nearly 600 executives in companies based in Western Europe (51% of respondents), North America (36%) and Eastern Europe (13%).

The study included companies from across a number of industry sectors.