Ten Years of (De)industrialisation in Central and Eastern Europe: A Comparative Analysis

Erokhin, D. ORCID: https://orcid.org/0000-0002-5191-0579 (2025). Ten Years of (De)industrialisation in Central and Eastern Europe: A Comparative Analysis. In: European Security Order, Integration and Modernisation: Perspectives and Challenges in the Central and Eastern European Region. Eds. Zhongping, F., Mengmeng, H., & Weiwei, J., pp. 289-327 Budapest, Hungary: China–CEE Institute. ISBN 978-615-02-2788-7

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Abstract

In today’s global economy, discussions on industrialisation and deindustrialisation are central. While prominent cases like Germany’s manufacturing exodus to countries such as China and the USA grab the headlines, understanding the dynamics in Central and Eastern Europe (CEE) is crucial. This region, with its intricate historical, geopolitical and economic legacies, offers a unique perspective to examine industrial sector trajectories amidst global economic shifts. In CEE, the development of manufacturing is influenced by multifaceted processes such as backshoring.
The concept of backshoring gained momentum amid the Covid-19 pandemic, prompting nations to re-evaluate their dependency on distant manufacturing hubs and thus turn to nurturing domestic production resilience. Nearshoring has also emerged as a prevailing trend in Western Europe, focusing on reducing logistical complexities by relocating production closer to end markets. Additionally, the notion of friendshoring has emerged as a response to geopolitics and shared economic interests, leading to the relocation of manufacturing operations to allied nations. However, these industrialisation drivers are counterbalanced by certain challenges. Escalating energy costs have diminished manufacturing competitiveness, eroding profit margins. Sanctions limiting trade with Russia have disrupted supply chains, and global value chain shifts have potentially marginalised the manufacturing capacity of the CEE region. This study comprehensively analyses manufacturing indicators over a decade to determine whether Central and Eastern European countries experienced industrialisation or deindustrialisation during that period. Considering its the People’s Republic of China serves as a benchmark. While there are no definitive signs of significant deindustrialisation, vigilance is needed as market sentiment and supply chain optimisation strategies evolve within the manufacturing sector.

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