Leaders of the European Union’s member nations have agreed to pursue a “de-risking” strategy in dealings with China, and reduce critical dependencies in supply chains. At a summit in Brussels on June 30, the 27 EU leaders stated that it was important to “seek to ensure a level playing field, so that the trade and economic relationship is balanced, reciprocal and mutually beneficial between China and the European Union”. But the statement also emphasized that the EU “does not intend to decouple or to turn inward”. Ahead of the summit, Latvian Prime Minister Krisjanis Karins said that de-risking would first require assessing how dependent the EU is on China and in what sectors, then cutting back that exposure so that – in case of geopolitical tensions – Europe is not left “high and dry”. He said that the EU was trying to “move in lockstep” after previous experiences, “taking the lessons that we’ve learned rather painfully on our previous high energy dependence on Russia”.
Irish Taoiseach Leo Varadkar added that “China is not an enemy”, but that it was important for Europe “to be less naive” about its dependencies on Beijing. The decision to de-risk was initiated by European Commission President Ursula von der Leyen in an address in March, just before her trip to Beijing for a meeting with Chinese President Xi Jinping. In June, von der Leyen unveiled a prospective road map on de-risking. Diplomats from France, Germany, Italy and the Netherlands were among those expressing concern about how the plan might undercut individual countries’ national security authority. After the summit, European Council President Charles Michel said the leaders had held a powerful debate on China and “very quickly” agreed on China policy, demonstrating the bloc’s unity.
The discussion on China took two hours during the two-day gathering of EU leaders. Internal disputes and the bloc’s relations with other countries dominated, a stark difference from how the United States prioritizes China. With its own tensions with Beijing soaring, Washington has been pushing its European allies to harden their stance toward China. “We see China more and more as a systemic rival, but we have our own EU approach to China, compared to our transatlantic partners who have a strong view there,” Estonian Prime Minister Kajas Kallas said before the summit. At the summit, however, EU leaders shared the U.S. view concerning Beijing’s alliance with Moscow. They urged China in a statement “to press Russia to stop its war of aggression, and immediately, completely and unconditionally withdraw its troops from Ukraine”. China’s decision not to condemn Russia’s invasion of Ukraine has proved a sore point in its fraught relations with the EU over the past year. EU leaders also flagged Taiwan as a divisive issue affecting its China policy. “The European Council opposes any unilateral attempts to change the status quo by force or coercion,” the leaders’ statement read. “It reconfirms the EU’s consistent ‘One China policy’.” The EU leaders also raised concerns regarding forced labor and the treatment of ethnic minorities in China’s autonomous regions of Tibet and Xinjiang. They welcomed the EU-China human rights dialogue that resumed in February.
Meanwhile, the United States warned about a new Chinese counter-espionage law, saying American and other foreign companies in the country could face penalties from Chinese authorities for regular business activities. Chinese lawmakers this year passed a wide-ranging update to Beijing’s anti-espionage legislation that went into effect on July 1, banning the transfer of any information related to national security and broadening the definition of spying. The U.S. National Counterintelligence and Security Center (NCSC) said that China viewed the outbound flow of data as a national security risk, and that the new and existing laws could compel Chinese nationals employed by foreign companies to assist in Chinese intelligence efforts. “U.S. companies and individuals in China could also face penalties for traditional business activities that Beijing deems acts of espionage or for actions that Beijing believes assist foreign sanctions against China,” it said. U.S. officials have told Reuters that since the enactment of the Chinese law in April they have received questions from businesses and other groups about the risks of traveling to China, the South China Morning Post reports.
CIA Director William Burns said during a lecture in England that decoupling from China would be foolish given the deep economic interdependence so the United States should try to diversify its supply chains. “China is the only country with both the intent to reshape the international order and increasingly the economic, diplomatic, military and technological power to do so. In today’s world, no country wants to find itself at the mercy of a ‘cartel of one’ for critical minerals and technologies,” Burns said. “The answer to that is not to decouple from an economy like China’s, which would be foolish, but to sensibly de-risk and diversify by securing resilient supply chains, protecting our technological edge and investing in industrial capacity.”
