Sarah Logan
Critical juncture
Despite heightened focus in the West about dependence on China – and high-level efforts to recalibrate these relations at the strategic level – Europeans’ economic reliance on China has continued to grow in recent years. EU imports from China reached €515.9 billion in 2023, across a wide array of products, many of which are vital to advanced economies.
At the heart of these entangled relations is European states’ and economies’ dependence on China for the critical raw materials (CRMs) needed to produce green energy technologies, including solar modules, electric vehicle (EV) batteries, and permanent magnets for wind turbines. The central importance of these technologies today risks leaving Europe heavily reliant on other countries for their supply – an acute challenge when production is highly concentrated in China as strategic competition intensifies between China and the West.
To respond to this situation, the European Union has vowed to diversify its energy sources and build out CRM supply chains and processing capabilities that are unconnected with China (ex-China). The bloc has introduced an array of policies aimed at achieving this. “De-risking” supply chains is the way the EU terms its efforts to reduce its economic reliance on China. This de-risking approach encompasses the green energy technologies critical for the EU’s decarbonisation and energy security, as well as a range of other technologies, including in the military field. Managing European exposure to China in different domains is vital not only for Europe’s energy security, but also for the EU to retain and enhance its geopolitical and geoeconomic strength in a rapidly changing world.
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