The President of the European Commission, Ursula von der Leyen, advocated, on Thursday 30 March, for a relationship with China based on risk reduction, and not decoupling.
“Our relationship with China is one of the most intricate and important anywhere in the world. And how we manage it will be a determining factor for our future economic prosperity and national security”, she explained in a speech delivered at the invitation of the think tanks EPC and Merics.
“Defining a European strategy towards China – defining what success looks like - must start with a sober assessment of our current relations and of China’s strategic intentions”, said Ms von der Leyen, who will travel next week to Beijing alongside French President Emmanuel Macron.
For example, she said that China was becoming “more repressive at home and assertive abroad”. According to the President, in order to reorient European policies, the EU must take into account three main conclusions.
First of all, “China has now turned the page on the era of ‘reform and opening up’ and is moving into a new era of security and control”, the President explained. She said that it was to be expected that there would be a greater emphasis on security, whether military, technological or economic, and even stricter economic control measures as the Chinese Communist Party strengthened its steering of the economy.
Moreover, the imperative of security and control now goes beyond the logic of free markets and open trade, Ms von der Leyen added.
Finally, for her, the clear objective of the Chinese Communist Party is a systemic change in the international order, focused on China.
These changes on the part of China should lead the EU to “rebalance” its relations with Beijing “on the basis of transparency, predictability and reciprocity”, according to the President. And to insist that it is not at all a question of breaking economic ties.
Economic response
In concrete terms, the EU must not only reduce its dependence on Beijing in critical areas, but also be careful not to equip China in a way that weakens European security. “We need to ensure that our companies’ capital, expertise, and knowledge are not used to enhance the military and intelligence capabilities of those who are also systemic rivals”, said Ms von der Leyen.
This is why the Commission is considering an instrument to control external investment, she announced. This would affect “sensitive technologies where investment can lead to the development of military capabilities that pose risks to national security”, such as dual-use goods, whose exports from Europe are already controlled.
The President mentioned microelectronics, quantum computing, robotics, artificial intelligence or biotechnology as examples of sensitive advanced technologies. The Commission is expected to present “initial ideas” on this issue this year, she said.
Another type of response to Chinese uncompetitive practices is the EU’s new trade defence instruments. The EU has the tools to counter economic distortions, such as the Foreign Subsidies Regulation and a new instrument to deter economic coercion (see EUROPE 13151/18) and, according to the President, unity is now need at EU level for a “bolder and faster use of those instruments”.
Finally, the EU needs to further develop its relations with other partners, especially in the digital field, but also in trade more broadly, according to Ursula von der Leyen. She focused on the free trade agreements being negotiated with countries in the Indo-Pacific region, but also with Latin America, as it is important, she said, to find common positions between the EU and these partners.
This need for alignment and cooperation on the China issue is also valid within the EU Member States themselves: “A strong European China policy relies on strong coordination between Member States and EU institutions and a willingness to avoid the divide and conquer tactics that we know we may face”, she said.
The previous day, the EPP group chair had also called for the EU to speak with one voice in its relations with Beijing (see EUROPE 13152/11).
Diplomatic cooperation
Beyond economics, the EU wants to reduce risks through diplomacy.
Stressing the need to work to strengthen the international system, Ms von der Leyen said it was “vitally important that we ensure diplomatic stability and open communication lines with China”. For her, “it is neither viable – nor in Europe’s interest – to decouple from China”.
The president explained that there was a need to think about how to collaborate productively in the global system in the future and what challenges to tackle. In particular, she praised China’s role and EU/China cooperation in protecting biodiversity, hoping that the same would be true for the fight against climate change in the run-up to COP28.
Recalling that as a permanent member of the Security Council, China had a responsibility to uphold the principles and values that lie at the heart of the UN Charter, Ms von der Leyen warned that how China continued to respond to Vladimir Putin’s war would be “a determining factor for EU-China relations going forward”.
She also recalled that the way in which Beijing will comply with international human rights obligations would be another. (Original version in French by Camille-Cerise Gessant and Léa Marchal)