Comment l’Europe fait face aux huit piliers du plan chinois
Following their Franco-German Council of Ministers on Friday 17 July, President Emanuel Macron and Chancellor Friedrich Merz arrived at a common position on the risks presented by China to the economy of the European continent. The two leaders stressed the scale of the trade deficit with the powerhouse of the East: 300 billion euros a year, or nearly a billion a day! Although Macron spoke of his desire for “technology transfers” from China to Europe, to drive an increase in European industrial production, they both called for a more effective use of the instruments set in place at the level of the European Union and for a re-evaluation of the renminbi. Could this be enough to strike a new balance in trade terms and relaunch European competitiveness? Any scepticism on the matter would be justified, reading this analysis published by the Institut Jacques Delors.
In it, Sacha Courtial and Mathieu Zhang describe a Chinese strategy based on eight pillars, requiring eight European responses. Having pointed out that China: (1) now controls more than 95% of the production chain of critical components (silicon wafers) of solar panels, (2) is responsible for more than 60% of new wind energy plants, (3) is the world’s largest market for and exporter of electric vehicles, (4) now installs more robots every year than the rest of the world put together. “In a context of demographic ageing, China can no longer rely on cheap and abundant labour. The authorities are therefore making the decision to move to a model of growth steered by breakaway technological innovation. Prime Minister Li Qiang has announced no fewer than 109 projects in sectors deemed strategic: artificial intelligence, biotechnologies, quantum computing and new materials”, the authors note (our translation throughout). They go on to add that “the gamble on AI and the robotisation of jobs is particularly striking. Whereas unemployment has remained at a high level since the Covid-19 period, particularly among young people, the government is already anticipating the loss of seven or eight million workers a year. It is therefore accelerating its objectives for the ‘penetration of the economy’ by AI. The ‘AI+’ plan provides, amongst other things, for the use of AI agents in 70% of tasks by 2027 and 90% by 2030 in the service sectors. On paper, the government is congratulating itself on the creation of 10 million jobs, inevitably in the maintenance of the machines and digital systems. Meanwhile, vast swathes of jobs involving services to individuals, pharmacists, cashiers, insurance providers, domestic staff, will be replaced or reduced by the presence of android agents”.
“What is so specific about the Chinese strategy lies in its logic of vertical integration. The aim is not simply to support a small number of sectors considered to be priorities, but gradually to take over the entire value chain: from the mining of resources to basic research, from training talent to industrial production, from the definition of technical standards to the sale of finished products. In some cases, the strategy goes beyond simple economic calculations. China is also investing in low-added-value sectors and those offering little return in the short term, as long as they are considered strategic or economic security, industrial resilience or future coercion considerations. The objective is therefore not just to produce more, but to reduce Chinese dependency whilst increasing that of the rest of the world on China”, Courtial and Zhang stress.
This strategy is built on eight pillars: (1) the critical resources (minerals, rare earths, strategic metals and agricultural or energy inputs) controlled by China, particularly in Africa, Latin America and Central Asia, and of which it dominates the processing to an even greater extent, with a more than 90% market share in refining; (2) “the fifteenth plan sets out vast investment in energy, logistics, digital and industrial infrastructure. These investments are intended to support the development of high-tech industries, but also to bolster the resilience of Chinese production”; (3) “China’s shift up market is also based on investing in human capital. Beijing is developing training in science and technology, supporting its engineering schools and taking steps to retain or attract talent educated abroad. This dynamic can already be seen in artificial intelligence, where the proportion of AI researchers trained in China rose from 27% in 2017 to 38% in 2024”; (4) investment in research and development: according to the ASPI’s Critical Technology Tracker, China is now in the lead in 57 of the 64 critical technologies studied over the period 2019-2023, against just three out of 64 in the early 2000s; (5) the Chinese State continues actively to support emerging sectors by means of subsidies, preferential lines of credit, industrial funds and local policies of support to production. Moreover, “this support does not always take the form of visible direct subsidies but may be channelled via real estate, energy, credit, taxation, public procurement or coordination between local governments, public enterprises and private champions”; (6) “the ‘dual circulation’ strategy combines relative protection of the internal market with international expansion. The domestic market serves as a base for learning, growth and offsetting for Chinese businesses. It allows them to test their products, benefit from economies of scale and consolidate their competitiveness before entering the international markets. At the same time, industrial over-capacity can be dumped on these international markets. This logic is particularly apparent in electric vehicles, batteries, solar panels and certain capital goods”; (7) “standardisation has become a key element in the Chinese industrial policy, with strong involvement of the State and an increasing determination to export these standards to the rest of the world”; (8) finally, China is increasingly pursuing a strategy of coercively instrumentalising its rivals’ dependencies by controlling exports of critical raw materials or components.
The European Union has started to react to the Chinese strategy, but its response is still insufficient or overly timorous. Looking at resources and refining, for instance, although the EU has adopted the Critical Raw Materials Act, setting out goals for 2030 of 10% mining, 25% recycling and 40% refining within the EU and an upper limit of 65% dependency on a single third country for each material, “these have not led to significant progress in three years. On the issue of recycling in particular, the capacity to mobilise massive amounts of private capital and speed up local and environmental acceptance of projects to open mines in Europe is highly complex, versus a Chinese schedule that is already operational”, the authors observe.
In the industrial domain, the Industrial Accelerator Act of March 2026 aims to increase manufacturing to 20% of European GDP between now and 2035 by streamlining the process of granting permits and reducing strategic dependencies. “This is an important step towards industrial planning, but actual acceleration on the ground remains to be seen, set against the speed of execution of Chinese infrastructure”, the authors stress.
As regards training and talents, a number of initiatives have been taken: the Union of Skills (March 2025), the STEM Education Strategic Plan, the planned European engineering diploma, and the EU Talent Pool platform to attract talent from outside Europe. However, “education and skills remain strictly national prerogatives within the EU. Given Beijing’s centralised management of human capital, Europe’s incentive programmes are inconsistent and the continent suffers from a continued technological brain drain”, Courtial and Zhang note.
Unsurprisingly, they point out that in the field of research, the tools (for instance the Horizon Europe programme, with an envelope 100 billion euros) have existed for a long time, but that although Europe produces excellent basic research, it is still struggling to commercialise it and transpose it at industrial scale. Furthermore, “excessive red tape discourages rapid innovation, leaving China free to convert its patents into market monopolies”.
In view of the asymmetric State support (real estate, credit, orders) practised by China and the launch of 109 breakaway projects (AI, quantum, new materials), the European response is particularly inadequate. To give it its due, the European Union has launched its Important Projects of European Common Interest (IPECI) on hydrogen, batteries and health, adopted the Net-Zero Industry Act (NZIA) and the Chips Act and created the STEP platform for strategic technologies. However, the last of these “is merely a reformat of existing funds (cohesion funds, Horizon Europe) without any ‘fresh new money’”. At this stage, moreover, there are no guarantees that the forthcoming competitiveness plan set out in the new multi-annual financial framework (2028-2034) will actually change the status quo. Additionally, “blocking a proper European Sovereignty Fund has prompted the EU to relax the national State aid regime. This plays in favour of the wealthier States (Germany, France), fragments the single market and provides a financially inferior response to Beijing’s massive and centralised subsidies”, the authors argue.
In response to the Chinese doctrine of “dual circulation” – securing the internal market and getting rid of industrial over-capacity abroad (1.1 trillion dollars of exports in 2025) – “Europe is now pursuing the use of tariff barriers to protect its industrial fabric from floods of low-cost imports”. For this, it uses a defensive and offensive commercial arsenal: increasing the numbers of anti-subsidy investigations, frequent opening of safeguarding investigations and development of a dedicated instrument to tackle subsidised over-capacity. “This is the pillar in which the European response is the most united”, the authors stress.
Finally, with the European doctrine of ‘de-risking’ and the creation of anti-economic coercion instruments and mechanisms to filter foreign direct investments (FDI), “Europe now has the legal tools it needs to react collectively in the event of blackmail or unilateral sanctions”. Unfortunately, however, these instruments can in far too many cases be triggered only by lengthy and complex procedures requiring unanimity. And in reality, “China feels under absolutely no obligation to bend to the EU’s demands, as it is working on the basis that any possibility of a united front is structurally paralysed by intra-European divisions. In Beijing, Europe is largely seen as a weak, predictable and fragmented actor. The Chinese government capitalises precisely on the misgivings of key member states, such as Germany and Spain, which seek to avoid escalation or to set the status quo in stone to preserve their investments and their direct commercial interests”.
The authors conclude that “for Europe, the challenge is clear: they must not only adapt to China’s rise in power, but also rethink their own strategy in a world in which the rules of the game are changing, or even being set by China”. (Olivier Jehin)
Sacha Courtial, Mathieu Zhang. Comment l’Europe fait face aux huit piliers du plan chinois? (Available in French only) Institut Jacques Delors. July 2026. 14 pages. The analysis document can be downloaded free of charge from the Institute’s website: https://aeur.eu/f/n0h
Mario Draghi – Hope is not a Strategy
Through the pages of this biography, the Italian journalist Cristina La Bella takes us on a quest to get to know a man who has held the positions of Governor of the Central Bank of Italy, Chairman of the European Central Bank and Prime Minister, Mario Draghi, a man many would like to see return to public service at European level whenever there is a new crisis, such is the extent to which “Super Mario” has proven providential, in the euro crisis and the Covid-19 pandemic alike. But La Bella goes beyond public duties, speeches, actions and results, all of which are richly documented – with the obvious admiration of the author; but don’t biographers always end up falling a little bit in love with their subject? – attempting to lay bare the human inside the banker’s mask. She succeeds in this remit, with anecdotes about his tastes, love of art and museums, choices of furniture, and even describing him taking a walk around Rome or doing his shopping.
The biography features some completely unexpected tangents, such as the author asking the reader why children always colour the sky in blue. Because they are conditioned to it, as the sky is many different and changing colours. This conditioning dates back to the Renaissance era, when the clients and patrons of artists, many of whom were bankers, wanted works of art to attract the eye and suggest opulence. Painters were therefore encouraged to use lots of gold and blue, the two most expensive colours as they were made exclusively from gold and lapis lazuli. This is how Mary, the mother of Jesus, who had up until then usually been depicted wearing black, started to wear blue, but also how the sky became blue. That is also why we now dream or even believe that it is always blue …
And although the highly pragmatic Mario Draghi stresses that “hope is not a strategy”, he nonetheless has some of the attributes of a dreamer, La Bella writes, adding: “throughout the course of his life, he has not only frequently exhibited brilliant intuition, but also an ability to get things done before everyone else. Even in times as hard as ours, Draghi has shown that he has a clear vision of the future and a clear idea of how to meet it and shape it […]. There is no single remedy to defend ourselves against US protectionism or Russia’s strategy of aggression. But we must (and of course should) imagine a common strategy. Pragmatism, courage and determination must guide the European leadership, who must put electoral interests to one side”. They must act to avoid the “slow, agonising death” that threatens Europe if it does not massively boost its competitiveness, as Draghi suggested when submitting his report to the President of the European Commission on 9 September 2024. (OJ)
Cristina La Bella, translated from nearby Andrea Monaci. Mario Draghi – Hope is not a Strategy. Santelli editore. 2026. ISBN: 978-8-8929-2326-3. 438 pages. €26,99