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EU-China relations have hit a remarkably rough patch.
Last week, the Commission described the relationship with China as ‘unsustainable’—an assessment that was not met with enthusiasm in Beijing and is still being digested in EU capitals. China since threatened retaliation over possible EU trade restrictions.
Something needs to happen, but what?
Euronews’ weekly podcast Brussels, My Love? explores these questions with Stefania Benaglia, foreign policy advisor and expert on EU-Asia relations, Jan Růžička, chief external affairs officer at the investment group PPF, and Euronews’ political correspondent, Jorge Liboreiro.
First de-risking and then?
China is the EU’s second-largest trading partners for goods after the United States.
The union is seriously dependent on China across multiple sectors of its economy, with solar panels, lithium-ion batteries and industrial robots being among the most imported goods.
But this relationship is unbalanced as it’s built on a large trade deficit in favour of Beijing—a situation that has Brussels rethinking its ties with China.
For Liboreiro, there are two possible scenarios.
“The first one is the existing trade tools that we have, like the anti-coercion instrument, which has never been used,” he said.
“The second possibility is that if these things are not sufficient, should we come up with new instruments?” he added.
The bloc’s strategy of reducing its dependence on non-EU countries is framed as a de-risking approach, but according to Benaglia, it must be complemented by a more constructive agenda.
“If you disengage from something you need to build an alternative, and that’s where the efforts need to be strengthened,” she said.
Benaglia stressed that, while reducing its reliance on China, the EU should deepen cooperation with countries such as South Korea, India and Japan to help shape a new strategic paradigm.
In addition, Benaglia underlined that in this turmoil, the EU should not lose its core strength: “While we are carving our way forward, and we’re finding a different way of engaging with our partners, we should not give up on standards, values, which is exactly our DNA.”
But the game is easier said than done because, as Liboreiro explained, “China plays with different rules”.
Růžička believes that after shifting away from China, the EU needs massive investments.
“We shall start not only protecting our industry, but we shall invest in it, like China invested in their EVs,” he said.
“We need get back to our roots, and our roots are not the rules and regulations and values, but creating great products,” he added.
Listen to the podcast in the player above or wherever you get your podcasts.
Additional sources • David Brodheim, sound editor and mixer
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