EU–China relations have become increasingly strained in recent years. For the most part, the EU’s approach to China has been driven by the economic interests of a small number of member states, but relations are becoming more complicated. Internal and external political tensions make doing business in and with China even more difficult, while the country’s emergence as an economic competitor has reinforced the EU’s insecurities about its own future economic position in the world.
China’s heated rivalry with the US has also become an issue of contention in the transatlantic relationship, despite the EU having similar and growing frustrations over China. The Biden administration is keen to work with allies in dealing with China and the EU has so far suggested a limited willingness to do so.
Beyond developing a toolkit of small, largely defensive measures, the EU’s approach to the economic challenge from China, as well as to broader geopolitical and geo-economic issues, has been to pursue ‘strategic autonomy’. It aims to be a neutral, but not equidistant, third pillar in a world order dominated by China and the US.
This is a risky and largely unsustainable strategy. If not followed through with enough conviction, it could result in continued soft triangulation and less effective attempts to profit economically. The EU will remain vulnerable to economic and political pressure from both the US and China, as demonstrated in early 2021 when China imposed sanctions on several European actors and the US threatened to impose sanctions and tariffs on several member states.
The investment agreement that the EU concluded with China at the end of 2020 highlights many of the difficulties in current European China policy. Attempts to reap the benefits of deeper economic engagement with China led to political tensions with the US. Subsequent mutual imposition of sanctions between the EU and China delayed or halted ratification of the agreement and highlighted the difficulty of separating the economic and political spheres.
Meaningful transatlantic cooperation on China is limited by fundamentally different EU and US views on several issues. This includes whether to take a confrontational or mainly defensive approach to China. It is also affected by the fact that much of the EU autonomy and sovereignty agenda has been developed with an eye more on the US than on China. Nevertheless, there is room for cooperation in several policy areas and the change of administration in the US provides an ideal opportunity to pursue this.
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