Charged Affairs

Christina Keßler | Rising Expert on Europe | February 26, 2025 | Photo Credit: Flickr

The European Commission has just started a new term and it faces many challenges, chief among them dealing with China. How will EU-China relations evolve in the years to come, especially considering the complex economic relationship between the two?

Looking Back

The EU’s China policy is very much defined by the interests of European companies. Around the turn of the century, many in the EU hoped for economic and political liberalization in China. In 2001, China joined the World Trade Organization (WTO), which many saw as the first step towards China becoming a responsible stakeholder in the international system. Over the last few years, however, these hopes have been disappointed. Concerns about unfair trade and investment practices, in addition to human rights abuses and China’s increasingly assertive geopolitical posturing, have disillusioned EU policy-makers.

In 2019, the EU adopted a three-pronged strategy, classifying China as a partner, competitor, and systemic rival. Since then, EU-China relations have soured further. China’s refusal to accept scrutiny regarding the outbreak of the COVID-19 pandemic, a sanction spat between the EU and China regarding the persecution of the Uyghur minority, and China’s support for Russia following the latter’s full-scale invasion of Ukraine, negatively affected relations between the two.

The EU has also increasingly started to worry about potential adverse economic impacts stemming from its economic ties to China. Europe laments that its own market openness is not reciprocated by the Chinese market. Additionally, China grants its firms substantial government subsidies in certain industries. This allows Chinese industries to grow rapidly and dominate the Chinese market and, increasingly, foreign markets. The EU, concerned about what this means for European industries, views this as an unfair advantage. Further worries concern the theft of intellectual property, such as in the realm of renewable energy, at the same time that Europe’s economic and technological dependence on China is growing.

EU member states do not always see eye to eye regarding China. Despite this, over her last mandate, European Commission President Ursula von der Leyen has managed to carve out her vision of EU-China relations focused on economic security and “de-risking”. “De-risking”, a term von der Leyen herself coined, is an alternative to “de-coupling”. While de-coupling is the complete cutting of ties with the Chinese economy, de-risking refers to the reduction of critical dependencies, for example in the clean energy sector.

The State of Play

Von der Leyen has just begun her second term heading the European Commission in December 2024, alongside a new team of Commissioners. When it comes to China, von der Leyen has shown herself to be assertive, yet pragmatic. Von der Leyen has strong Atlanticist instincts and worked closely with outgoing US President Joe Biden over the past few years, striking a tone that is more similar to the US administration—and thus more critical of China—than many other European leaders. In October, EU member states voted in favour of EU tariffs on Chinese electric vehicles due to China’s unfair market practices and in order to protect the European industrial base. The tariffs were effectively supported by 22 countries, with 12 abstaining and only five actively opposing them. This can be seen as a success for von der Leyen and her de-risking approach.

Former Estonian Prime Minister Kaja Kallas will now be responsible for the EU’s foreign policy. Kallas has been outspoken about China, pointing to the country’s “unfair competition.” Beijing might instead turn to former Portuguese Prime Minister Antonio Costa. Costa is now the new President of the European Council, chairing the meetings of the 27 heads of state and government. Costa has welcomed Chinese investment in Portugal in the past.

What’s next?

Von der Leyen’s vision of EU-China relations is not shared by all member states. For example, French President Emmanuel Macron and German Chancellor Olaf Scholz do not necessarily support her approach. However, both are facing political turmoil at home, with Scholz likely soon being replaced as chancellor.

For the foreseeable future, von der Leyen will be in charge of shaping Europe’s China policy. Economic security and de-risking will continue to be the key pillars of the EU’s approach, and relations with China will continue to be difficult. European concerns about trade and investments with China are too grave for the relationship to substantially improve in the near term.

Christina Keßler is the 2024 Rising Expert on Europe. She holds an MA in European Political and Governance Studies from the College of Europe in Bruges, Belgium as well as an MSc in Global Governance and Diplomacy from the University of Oxford.