Over the past few years, geopolitics has moved from being an external variable in corporate globalization decisions to becoming a central concern for boards and investment committees.
The EU continues to adjust its industrial policies and investigate Chinese EVs. The US keeps changing tariffs and localization requirements. Subsidies, rules of origin and foreign-investment reviews are also evolving across markets. For companies planning international expansion, location decisions can no longer be based on land, labor and logistics costs alone.
The wind shifts constantly. In 2026, some observers see Spain, within the EU, as a more predictable option. Others believe Morocco’s trade advantages have weakened, while Turkey’s policy environment appears less certain than it did only a few months ago.
While reading the near-term direction of international policy is already difficult, heavy capex investment requires management to answer a more practical question: if subsidies decline, tariffs change or political relationships deteriorate, can the location still create value through customer demand, talent, supply-chain capabilities, technology and operational efficiency?
Factories are built over years. Political signals can change within months or even weeks. The real question is not whether policy is favorable today, but whether the business logic still works when it is not.
1. Case Study: An Investment Moving Against the Prevailing Direction
A recent announcement caught my attention. On September 2, 2026, Haier-owned GE Appliances announced a further US$1 billion investment in Appliance Park in Louisville, Kentucky. More than US$400 million will be used to transform Building 5 and relocate high-volume dryer production from Mexico to the US. The new production operation is planned to begin in late 2027.[1]
The decision is noteworthy not only because of the size of the investment, but also because it partly reverses a dominant North American manufacturing pattern of the past decade:
The US as the center for markets, R&D and brands;
Mexico as the manufacturing base;
An integrated North American supply chain serving the US market.
For many Chinese companies expanding internationally, Mexico has often been viewed as an important manufacturing gateway to the US. From that perspective, moving production from Mexico back to the US appears to run against the prevailing direction.
What is particularly interesting is that GE Appliances did not frame the decision simply as a tariff response. Its announcement emphasized closer links between design, engineering and manufacturing teams, greater operating synergies and stronger innovation capabilities.[1]
The investment is clearly influenced by the policy environment. But its core rationale is not a short-term response to one tariff level. It is a reassessment of organizational efficiency and long-term competitiveness.
The fundamental investment question remains: which location can continue to improve product-development efficiency, manufacturing performance, supply-chain coordination and customer responsiveness over the next decade?
2.Haier’s EMEIA Footprint: A Consistent Business Logic
Looking at Haier’s major EMEIA locations reveals a consistent business logic. The company is not reproducing the same Chinese factory in every market. Instead, it assigns different functions to different parts of the region.
Turkey provides an established white-goods manufacturing base and engineering talent. In 2021, Haier announced an €85 million investment to expand tumble-dryer and dishwasher production, positioning Turkey as its largest European production and export center.[2] In 2024, a new cooking-appliance factory and R&D center opened in Eskişehir.
The 56,000-square-meter factory has planned annual capacity of 1.2 million units, while the associated R&D center covers the process from concept design through production development and performance testing.[3]
Italy serves a different purpose: brands, distribution and product platforms. After completing the acquisition of Candy in 2019, Haier used the business as an operating platform for the European market and as a foundation for Haier Europe. The value went beyond manufacturing capacity. It also included the Candy, Hoover and Rosières brands, established distribution channels, product platforms and long-standing knowledge of European consumers.[4]
Egypt combines local-market production with regional reach. The Haier Egypt Ecological Park, inaugurated in 2024 in 10th of Ramadan City, covers 200,000 square meters and has designed total capacity exceeding 1.5 million units. Its first phase includes air conditioners, televisions and washing machines, while later phases extend to refrigerators and freezers. Haier stated that the park would first serve Egyptian demand while improving responsiveness across the Middle East and Africa and supporting products adapted to local consumer needs.[5]
Policy, trade agreements and government support clearly influence these choices. Yet all three locations share a more resilient business logic: even if a specific incentive disappears, the manufacturing base, engineering talent, brand networks, proximity to customers and regional logistics value remain.
3.Geopolitics Is Only an Entry Filter, Not the Investment Thesis
Geopolitics cannot be ignored. In industries such as automotive, batteries and critical materials, tariffs, rules of origin, investment screening, carbon-footprint requirements and data compliance can determine whether a project can enter a market, what structure it must adopt and when it can proceed.
In that sense, geopolitics is an important entry filter. But being allowed to enter does not mean the investment case is sound. For a factory expected to operate for twenty or thirty years, long-term success depends on the company’s operating capabilities and the location’s potential for sustained value creation, rather than on a tariff rate or subsidy program that may change much more frequently.
Heavy capex investment still has to answer a TRADITIONAL QUESTION : can this location improve product development, manufacturing efficiency, supply-chain coordination and customer responsiveness over the next ten years?
If the answer is yes, policy changes may affect returns and timing.
If the answer is no, even generous subsidies are unlikely to turn the project into a successful long-term investment.
The most resilient heavy-capex strategy is therefore not to bet on one country or region. It is to invest where the business case can continue to stand on its own after subsidies decline, tariffs change and political conditions evolve.
4. From an OEM Mindset to an Ecosystem Mindset
Electric vehicles are at the forefront of China’s international expansion. For automotive manufacturers, incorporating suppliers’ ability to internationalize into the investment model is not merely a supply-chain management issue. It is also a strategic business decision.
The rapid rise of China’s new-energy vehicle industry has been inseparable from a highly coordinated domestic supply chain. From batteries, electric-drive systems and power electronics to a dense network of Tier 2 and Tier 3 suppliers, Chinese automakers have built significant cost and efficiency advantages through industrial clustering, rapid response and continuous cost reduction.
For overseas heavy-capex investment, companies should remember that a resilient bottom line matters just as much as top-line growth.
Large OEMs may be able to absorb delayed production, higher costs or changes in regional strategy. Smaller suppliers face a different reality: overseas factories, local teams, new certification systems and cash-flow pressure, often supported by orders concentrated among only a few customers or even a single customer.
Many of the supply-chain efficiencies enjoyed by Chinese automakers at home cannot be reproduced automatically overseas. Without competitive local suppliers, manufacturing, inventory, logistics and quality-management costs can rise sharply and erode the gains generated by market growth.
Ecosystem globalization therefore cannot rely only on suppliers being asked to follow their customers. It requires coordination between OEMs and key suppliers to create sufficient order visibility, appropriate risk-sharing mechanisms and credible long-term development opportunities. An automaker’s overseas competitiveness also depends on rebuilding the supply-chain efficiencies that supported its domestic success.
From this perspective, globalization is not only a question of market footprint. It is also a question of industrial-ecosystem migration.
5.Conclusion: Geopolitics Is the Wind; Business Logic Is the Foundation
Returning to the questions raised at the beginning, there is no universal answer to whether Spain (within the EU), Morocco or Turkey is the right investment destination. The answer depends on the industry, the customer base and the time horizon. A country may be well suited to appliance manufacturing but not to battery production. It may work as a regional export platform without being the right place for a full R&D and supply-chain ecosystem.
Companies therefore need more than a country ranking shaped by current policy headlines. They need a decision sequence capable of looking through short-term volatility:
First, confirm whether policy and regulation allow entry;
Second, test whether customers, talent, energy, logistics and supply chains can support long-term operations;
Finally, assess whether the company and its critical suppliers can withstand ramp-up risk and periods of political headwind.
For OEMs, including supplier resilience in the investment model is not an additional social responsibility. It is a condition for the OEM’s own business plan to work. If critical suppliers lack order visibility, reasonable risk-sharing and opportunities to serve multiple customers, the OEM may complete its overseas factory while losing the cost, speed and quality coordination that supported its competitiveness at home.
Geopolitics will continue to shape global investment. But it is better suited to answering whether, when and how a company can enter. The long-term viability of heavy investment still depends on whether the location can improve product development, manufacturing performance, supply-chain coordination and customer responsiveness over the next decade.
Companies cannot control the wind, but they can decide where to build the foundation. The most resilient choice is to invest where the business logic remains valid after the tailwind weakens.
Disclaimer:
This article is based on an original piece published by the WeChat account “EU-CN_Ind_Insights” and edited by EqualOcean. The views expressed are solely those of the original author. No organization or individual may scrape this article or use it to train AI models without the rights holder’s authorization.
Sources:
[1] GE Appliances, September 2, 2026, US$1 billion Louisville investment announcement.
[2] Haier Europe, October 25, 2021, expansion of its largest European production and export center in Turkey.
[3] Haier Europe, March 1, 2024, new cooking factory and R&D center in Eskişehir.
[4] Haier Smart Home, January 8, 2019, completion of the Candy acquisition.
[5] Haier Egypt, May 3, 2024, opening of the Egypt Ecological Park.
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