EU takes aim at China in proposed economic strategy

EU takes aim at China in proposed economic strategy

The European Commission on Tuesday unveiled a new trade doctrine aimed at curbing China’s ability to squeeze Europe’s economy and preventing European companies from exporting sensitive, military-linked technology that could give China an edge.

The policy, still in its early stages, highlights how the EU is seeking to align itself with the United States to limit China’s access to sensitive markets and industrial secrets. It also reflects growing concerns about Beijing’s deepening ties with Moscow.

The announcement in Brussels came during a busy week for Europe-China relations. Chinese Premier Li Keqiang is visiting Germany, where he met with Chancellor Olaf Scholz and business leaders before leaving for meetings in France on Tuesday.

The initiative also underscores how the European Union, one of the world’s largest economies and a major trading partner for both China and the United States, is trying to manage its economic dependence on Beijing and Russia’s response to the invasion. Along with trying to avoid financial breakdown. Of Ukraine.

The Commission, the executive branch of the European Union, said in a 14-page document That poor co-ordination between member states and weak trade rules could allow adversaries to impose an economic bar on EU economies or manufacturers, and this needs to be addressed urgently.

“Our national security is more deeply tied to our ability to be financially secure and resilient than ever before,” the newspaper said.

The document did not once mention China, or any specific country, but instead referred to “sites of concern that drive civil-military fusion strategies.”

European Commission President Ursula von der Leyen said in comments to reporters that the policy was “country agnostic” and was not aimed at overhauling how the bloc interacted with economic powers. Instead, she said, “we’re looking at a limited, small set of cutting-edge technologies,” and added: “And here, we want to make sure they don’t increase the military capabilities of some of the countries of concern.”

But European diplomats said the proposed economic strategy was clearly about China. He said it would probably take many months of debate before concrete policy could be formed but was a necessary first step towards preventing economic goals from undermining EU security.

Still, diplomats said the bloc’s biggest economic powers – Germany, France, Italy and the Netherlands – were not keen on disruptive interference from Brussels in their vital economic ties with China. Those concerns could set the scene for a watered-down of the commission’s proposals.

Meetings in Germany on Tuesday were muted and the elephant in the room was avoided: the German economy’s dependence on China. More than one million German jobs depend directly on China, and nearly half of German manufacturers rely on China for some part of their supply chain.

After their meeting in the chancellery, Mr. Scholz and Mr. Lee read statements but took no questions.

“Direct dialogue, personal interaction, genuine exchange – all this is even more important than usual in these extraordinary times full of global challenges and crises,” Mr Scholz said, skipping the thorny issues and focusing instead on climate and green energy. chose to focus.

“We have no interest in economic isolation from China,” he said. Mr Scholz also avoided mentioning risk-averse economic ties with China – a lighthearted approach to reducing dependence that has increasingly gained traction in diplomatic parlance.

However, Mr. Lee brought up the word later in the day. According to a German DPA, “the imposition of discriminatory measures in the name of de-risking other countries is contrary to market principles as well as fair competition rules and World Trade Organization rules.” news service.

The European Commission’s proposal on economic security states that the bloc should keep potentially hostile countries and their companies out of certain critical infrastructure, such as ports and pipelines, and block EU companies from exporting high-tech goods with military uses. Potential adversaries should be barred from exporting.

The document also aims to ensure that supply chains for security-sensitive goods are not overly dependent on such countries, and prevent proprietary European technologies in artificial intelligence, chip-making or biotechnology from “leaking”.

The bloc already has a set of rules that seek to address some of these concerns, but the commission said that much better and stricter rules were needed, and that they should be implemented with the same enthusiasm and standards in the 27 countries. Needed The goal, the document said, is to ensure that there are no backdoors to undermine European security.

“The need for more rapid and coordinated action at EU level in the field of export controls has become pressing,” the resolution said, noting that “an uncontrolled proliferation of national controls by member states would create loopholes.”

Some European countries have already tightened their trade ties with China, with the Netherlands this year barring firm ASML from exporting its advanced chip production technology on security grounds.

The bloc is also considering targeting Chinese companies with sanctions because they are providing Russia with chips used in weapons deployed against Ukraine.

Christopher F Schuetz Contributed reporting from Berlin.

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