EU's 'de-risking' plan for China meets resistance from some members
South China Morning Post
5 min read
As European Union chief Ursula von der Leyen prepares to unveil a road map for "de-risking" economic ties with China, big member states have warned against "mimicking" the "gung ho" approach of United States.
At a breakfast meeting in Brussels on Wednesday, diplomats from France, Germany, Italy and the Netherlands were among those expressing concern about "national security" references von de Leyen's chief of cabinet, Bjorn Seibert, made in a presentation, according to five diplomats and others party to the discussion.
While there is broad support for reducing Europe's dependencies on China and finding alternative suppliers for critical goods, there are worries that von der Leyen's European Commission is moving too quickly and too expansively.
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The "cool and cautious" feedback from some the bloc's most powerful members, said a senior official, was: "We are Europe, not the United States."
Some capitals worry that Brussels is veering onto their turf by conflating trade policy with "national security".
"National security means national security," one western European diplomat said, a reminder that the EU has no domain over its members' individual policies in this area.
An early-stage proposal for the new economic security strategy - which will not directly target China, but which has been drafted with it in mind - is due on June 20, having been first announced by von der Leyen during a speech on China at the end of March.
At that time, she warned of the need to wean Europe off Chinese supplies of critical minerals, and to keep cutting-edge European technologies out of the hands of China's military.
The policy will include outbound investment screening, which would restrict European firms from investing in some sectors of the Chinese economy.
The concept has made western European capitals jittery about Brussels moving too close to Washington, where security has trumped economic rationale when it comes to Beijing, a second diplomat said.
A third added that while Seibert presented "a good overall plan, we need to be careful not to mimic the American in their posture and their words".
"The overall response was pragmatic, we aren't interested in a gung ho approach to China," said a fourth.
The lukewarm response could set the tone for an EU leaders' debate on China later this month, as the 27 top officials mull over an updated policy towards Beijing.
"It is evident from member states' reactions that she did not consult EU governments before rhetorically aligning with the Biden administration on this subject," said David Kleimann, a visiting fellow at the Bruegel think tank in Brussels.
"This is surprising, because limitations to outbound capital flows are subject to unanimity in the European Council. Moreover, member states have exclusive competence for national security matters," he added.
The von der Leyen camp is unfazed by the blowback and points to a series of trade weapons pointed at China that were unpopular with EU members initially, only to eventually pass into law.
An anti-coercion instrument designed to tackle China's perceived economic bullying was formally agreed upon this week, less than two years after it was proposed. Initially, free market-minded member states had been extremely uncomfortable with the concept.
Also, von der Leyen's supporters note, she has said that the national security elements of her de-risking proposal would be very limited, to specific tech industries like quantum computing, artificial intelligence and semiconductors.
The vast majority of trade and investment is deemed unrisky, and would not be affected.
Western Europe's anxiety has crept into other areas of EU-China relations as well.
Some members are frustrated that Beijing was not consulted earlier about proposed EU sanctions on eight Chinese companies - some of which have bases in Hong Kong - for funnelling banned European goods to Russia's military.
Relevant EU officials only met with Chinese interlocutors to explain why the firms had been targeted this week, according to a senior EU source, despite reaching out earlier to other countries in a similar position.
"We don't need to tell them everything, but we need to stay engaged, I mean it is China," said a western European diplomat about the delayed approach to Beijing. "We need to explain [things] to China - as always, it's more about respect than consent with them."
The measures, which have been negotiated for the past month, could be finalised as soon as Wednesday as part of a broader package of sanctions, mostly on Russia.
China's ambassador to the EU, Fu Cong, has complained about the lack of consultation and suggested in a recent interview that if presented with evidence he could help close the loopholes through which hi-tech goods used in cruise missiles were being sold to Russia.
Not everyone shares anxieties over a sharper EU turn on China. Many member states from central and eastern Europe are very comfortable with a tougher approach and with greater alignment with the US.
"What we see right now is that the western European capitals tend to regard China-related challenges primarily through the lens of economic security. This is the order of the day and the key discussion," said Grzegorz Stec, an analyst of EU-China relations at the Mercator Institute for China Studies in Berlin.
"In turn, central and eastern European capitals are closer to the [Ukraine] war, making the traditional security lens comparatively stronger," he added.
"Beijing's relationship with Moscow impacts these countries' fundamental safety and brings in more geopolitical dynamics given that Nato and the US act as security guarantors in the region."
