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EU should avoid China dependency as it builds ‘de-risking’ strategy with US: trade chief

  • Path forward is boosting economic security and diversifying supply chains away from Beijing, but not decoupling, says Valdis Dombrovskis

  • Quality of EU-China relations will largely depend on stance taken over Russia’s war in Ukraine, he adds

By Orange Wang in Washington

April 13, 2023

The European Union’s trade chief, Valdis Dombrovskis, says the policy views of the bloc’s 27 member nations can sometimes diverge. Photo: AFP

The European Union should not build a strategic dependency on China as it continues to align its “de-risking” strategy with the United States to gain economic security and diversify its supply chains away from Beijing, according to the bloc’s trade chief.

Valdis Dombrovskis, executive vice-president of the European Commission, gave his remarks on Wednesday after French President Emmanuel Macron sparked controversy on both sides of the Atlantic by saying the EU should avoid becoming an American “vassal” when it comes to China and must reduce its dependency on the US.

That firestorm erupted as Beijing appeared to be seeking stronger ties with European nations while geopolitical eddies continued to swirl in coping with growing tension with Washington and the US-led “suppression of China”, as Chinese President Xi Jinping asserted last month.

Amid debates whether Washington was moving towards a broader break-up with Beijing, Dombrovskis stated on Wednesday that decoupling from China was not what Brussels intends.

“We are rather heading towards de-risking and better risk management, avoiding strategic dependency,” he said at an event held by the American Enterprise Institute, a Washington-based think tank.

Still, Dombrovskis believed the EU “should not develop new dependencies” after making progress in decoupling from Russia in fossil fuel supplies following the war in Ukraine.

A “clearly important” aspect of EU-China relations would be China’s stance on Russia’s aggression against Ukraine, he said, as well as Moscow’s war crimes and atrocities there. “The quality of our relations will, to a large extent, depend on the position China will be taking in this regard.”

“De-risking” is shorthand for weaning Europe off Chinese supplies of critical minerals and restricting European investment in sensitive industries – including artificial intelligence, microchips and quantum computing – over fears of technology theft and strengthening the Chinese military-industrial complex.

Dombrovskis emphasised the significance of diversifying supply chains by noting that China dominates the supplies of many raw materials and components that the EU needs to build its green and digital economy.

European Commission President Ursula von der Leyen last month signalled a greater focus on the de-risking strategy during a speech in Brussels. And last week, she and Macron delivered a united message to Xi in Beijing that Europe was “counting on China” to help end Russia’s war in Ukraine.

During and after a three-day red-carpet state visit to China, Macron stressed the “strategic autonomy” of Europe, warned that European countries could “become vassals” amid Sino-US tensions, and said Europe must not be a “follower” of either the US or China on Taiwan as the bloc risked entanglement in “crises that aren’t ours”.

Laying bare the divisions between EU members on this front, some, like the Czech Republic and Lithuania, have advocated closer ties with the US and a tougher stance towards China.

European Commission President Ursula von der Leyen speaks in Beijing on April 6 after a meeting with Chinese President Xi Jinping and French President Emmanuel Macron. Photo: Kyodo

As the EU is a union of 27 independent countries, it is true that the views of individual member states on different topics might vary, said Dombrovskis.

That is why there has been “lots of EU coordination” to ensure that to the greatest extent possible “EU is speaking in one voice”.

Brussels’ top diplomat, Josep Borrell, is slated to visit Beijing this week, aiming to put a united face on the EU’s China policy.

Dombrovskis said the bloc saw China as a cooperation partner in dealing with climate change as well as an economic competitor and a “systemic rival” in some other areas since it was “promoting a different socio-economic model”.

“We need to navigate this very complex relationship,” he added.

Brussels and Washington must make their policy and economic plans converge rather than diverge to boost their economic strengths, Dombrovskis said, explaining these were foundational for their capacity to project and defend their values.

“First and foremost, the EU and US should aim to build a strong and prosperous transatlantic marketplace.”

“We should strive to be a global standard-setting machine,” he continued. “And we should align our work on economic security, including for de-risking and diversifying our supply chains.”

Dombrovskis said the EU would issue a new economic security strategy later this year, pushing for better, targeted use of trade and tech security tools in particular to avoid leaking emerging and sensitive technologies to authoritarian regimes.

“As there are concerns that our dual-use technologies are used to enhance [these regimes’] military and intelligence capabilities or used in breach of human rights, the EU will make every effort to align its economic de-risking strategy with our like-minded partners, including the US,” he said.


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