Chapter 4 · 7 min

Your action plan

Five decisions to make about China, a sector-by-sector reading, your first 100 days, and the method to get there.

The decisions

Five decisions to make about China

Source in China or bring in house?

Which parts, machines or processes bought in China could you bring in house at comparable cost by changing the design?

What we sawHonor designs 75% of its critical machines. According to Roland Berger, about 60% of the cost gap comes from design (automotive).

A second source outside China?

For your critical components, do you have a second source outside China, and what would a disruption cost?

What you need to knowSince April 2025, China has required licences to export several rare earths and magnets that contain them. European and US duties also change the calculation.

Prepare for Chinese robots?

Before your next investment in robots, mobile robots or vision, have you assessed the Chinese offer?

What you need to knowThe 2026-2030 five-year plan lists robotics among the strategic industries, and embodied AI among the industries of the future.

Partner or future competitor?

Which of your Chinese suppliers know your product well enough to become your competitors?

What we sawH&T, which started with printed circuit boards, is preparing its own household appliance brands.

Send engineers to Shenzhen?

Which engineers do you send to learn on site, for how long, and how do you organise their return?

What the delegation is consideringSeveral members of the delegation want to open an office in Shenzhen.

Decisions 2 and 3 work together. A second source outside China protects the components whose shortage would stop your lines. For equipment such as robots or vision, a Chinese offer can be put in competition without creating that dependency, provided maintenance and spare parts are covered in Europe.

One decision to take up with your industry body

Require reverse technology transfers?

When the most advanced Chinese suppliers want to produce or sell in Europe, what technology transfer do you ask for in return, and what do you share with them?

To take up with your industry bodyFor a long time, China required foreign carmakers to have a Chinese partner holding at least 50%. The proposed European Industrial Accelerator Act (March 2026) sets comparable conditions for Chinese investors in batteries and electric vehicles.

By sector

Your sector: exposure and first lever

Sector	Exposure to Chinese competition	Priority in the 2026-2030 plan	The most useful lever	Seen in China
Automotive, glazing, tyres	HighThe share of Chinese brands in Europe doubled in a year.	RemovedElectric vehicles drop off the list, as the sector has overcapacity.	Cut development time	A vehicle in 24 months at the new carmakers, a camera deployed in two days at XPENG.
Electronics, home automation, household appliances	HighChinese suppliers are launching their own brands.	YesNext-generation information technology	Partner or competitor, and pillar 1	H&T is preparing its own brands. Honor designs 75% of its critical machines.
Fashion and textiles	HighShein connects 6,500 suppliers and opens its system to European brands.	No	Cut development time with suppliers	Shein launches batches of 100 pieces, delivered in 3 to 4 days. A garment reaches the customer 28 days after its design.
Semiconductors (materials)	MediumNamed by MERICS among the next sectors exposed.	YesIntegrated circuits, new materials	Pillar 4: structured data before AI	XPENG improved the process, then structured the data, before adding AI.
Pharmaceuticals and dermo-cosmetics	MediumMERICS names pharmaceuticals among the next sectors exposed.	YesBiomedicine, biomanufacturing	Pillar 1: closed-loop vision quality control	At Honor, cameras correct upstream machines as soon as a defect appears.
Sporting goods and retail	LowNo visible Chinese competitor in Europe so far. Shein is already opening its chain to European brands.	No	Launch in small batches, restock fast	Shein launches batches of 100 pieces and restocks in 9 days.
Luxury jewellery and watchmaking	LowBrand, heritage and finish remain European strengths.	No	Pillar 1: design your critical machines	Honor designs 75% of its critical machines. Visual inspection stays human, even at the best.

High exposure: Chinese players already sell at scale in Europe. Medium: a sector named by MERICS among the next exposed. Low: no visible Chinese competitor in Europe so far.

Priorities of the 15th five-year plan (2026-2030), based on CGTN and Table.Media.

The four pillars

Your first 100 days, pillar by pillar

Pillar 1Process

DecisionName the three critical machines or processes to master in house.

IndicatorCritical machines or processes mastered (question 1)

Approved list and a plan for each machine

Pillar 2Lean

DecisionMeasure the time from a shop-floor idea to its start, then remove one approval level.

IndicatorIdea-to-start time, in days (question 2)

Baseline measured, then time halved

Pillar 3R&D

DecisionReserve an experimentation line in the plant budget and launch a project with a school.

IndicatorExperimentation budget and projects launched (question 5)

Budget line approved and first project launched

Pillar 4Data

DecisionGet one line's data clean and governed, then launch three AI use cases built by operators on it.

IndicatorAI use cases in production (question 7)

Baseline measured, then three use cases on a pilot line

The method

The method, step by step, with what we saw

Each step, with the calendar, is detailed inappendix F.

1. The visionWeeks 1 to 2

One page: where to win, what the plant must make possible, three to five quantified priorities.

Seen in ChinaThe five-year plan, BYD's mission, XPENG's roadmap to 2030.

2. The diagnosticWeeks 2 to 8

Measure idea-to-start and concept-to-launch times, the state of data, the critical machines.

Seen in ChinaHonor audits every supplier every year. XPENG first stabilised its process.

3. The Notre-Dame planEnd of month 2

Three pilots, lighter rules, criteria to roll out or stop within the quarter.

Seen in ChinaAn idea raised on a Friday started the following Monday.

4. Pilots and ritualsSix months

Process, then data, then AI built by operators. Gains are published and rewarded.

Seen in ChinaThe order XPENG followed. Vipshop launched an imperfect system and improves it in production.

5. Scale-upMonth six

Replication in stages, based on a gains register certified by management control.

Seen in ChinaXPENG plans to replicate its plants abroad in 2029.

Our method follows the order we observed at our hosts: first a direction, then fast execution. It stands out on four points:

A Notre-Dame plan, which frees the transformation from certain constraints

The end of the "right first time" dogma during build phases

AI built by and for the shop floor

A gains register certified by management control

60 %

of productivity gains possible with AI and advanced automation, according to BCG³³

According to BCG, AI combined with advanced automation can deliver productivity gains of up to 60% in some activities³³. The thresholds suggested are illustrations, to adapt to the size of your company.

Sources

33. BCG and BCG Institute, How the Factory of the Future Is Reshaping the Economics of Manufacturing, 2026.