Anyone who has been paying attention to global politics in the last few years would know that there is an intense rivalry between the US and China. They would also know that while the US has been eager to recruit the EU into this competition, European countries have rebuffed these advances. Most recently, crucial talks on resolving a tariff dispute between Brussels and Washington floundered on America’s insistence on a transatlantic, WTO-breaking to keep out Chinese steel.
And yet, it would be wrong to imagine that the EU has been sitting on the sidelines, watching without concern as China hoovers up industrial output and international influence. Quite the opposite.
Take for instance, the EU’s Global Gateway Initiative. Openly marketed as an alternative to China’s Belt and Road (an umbrella for various funding deals made with developing countries to help build their infrastructure), the EU has left no doubts that it is engaged in a race with China to capture the hearts and minds of populations outside the West, or at least good relations with their governments.
Just a couple weeks ago, the EU held its inaugural Global Gateway Forum, inviting a number of countries to attend the event in Brussels. As part of its opening gambit, the EU announced a variety of different deals with developing countries, including €1bn for digital infrastructure across African countries, €400m for renewable energy in Bangladesh, €50m for early childhood support in Rwanda and €500m for international programmes which promote equitable access to medicine.
It's not obvious whether any of this funding will really make a difference and indeed one of the main criticism is that a lot of this is just branding for existing policies. But if it really is nothing new, then why repackage it as something that China could see as a threat if not precisely because that is the political message you want to convey?
And it’s not just internationally that the EU-China competition is heating up. Countries around the world are looking at the clean tech revolution and trying to carve out their niches to build the industry of tomorrow. For the EU, this is a particularly sensitive issue.
Not only is the EU marked by past deindustrialisation, a phenomenon whose political consequences still reverberate today, but it has past experience of losing out directly to China. In the early days of solar power, the EU led much of the innovation, research and production. But almost all of this was lost to China and the EU’s burgeoning industry was decimated. When the EU tried to retaliate with tariffs it was already too late – industry wasn’t moving back and European consumers were simply being saddled with higher costs.
That experience with solar has left much of the EU verging on paranoia when it comes to the threat that China poses to the EU’s hopes of developing new green industries. So it’s little surprise that this year the Commission announced it was launching an investigation into Chinese EVs and that a similar probe was being considered for wind turbines.
Even without tariffs, the EU is setting up new laws that are designed to tilt the playing field back towards companies based in the EU. For instance, the Net Zero Industry Act contains provisions that would penalise public procurement bids that excessively rely on a single supplier (i.e. China). Similarly, the Critical Raw Materials Act sets out that no more than 65% of the EU’s imports of certain essential materials should come from a single supplier (again, this means China).
It’s not just in clean tech either. In Brussels, people like to speak of the ‘twin transitions’ – climate and digital. And, just as with climate, in the digital space too we have seen the EU steadily move against China.
Take 5G for instance, the fastest telecom network standard currently available. It’s new enough that it’s still being rolled out in many countries. Managing that rollout means new infrastructure and it means companies are needed to build and operate it. In 2020, the EU agreed on a set of recommendations around 5G, partly aimed at ensuring that the private companies involved in establishing this highly sensitive infrastructure wouldn’t present a security threat.
At the time, there was little doubt that this was aimed at China, and in particular the Chinese electronics company Huawei. Already a third of EU countries have taken up this implicit accord and banned Huawei from their 5G networks, while many of those that have not yet done so are reviewing their rules. Depending on how quickly they act, the non-binding recommendations could be upgraded to a full ban in the next few years.
Less dramatically, there has also been a growing trend in Europe for countries to ban public officials from using the Chinese social media app, TikTok, on their work phones. All the EU institutions, along with some countries, like Denmark, Belgium and France (along with the UK), have instituted such bans in the past year.
While the direct consequences of these bans are fairly limited, they do speak to an atmosphere of distrust. TikTok itself may not even be much of a security threat, but being Chinese in origin is cause enough that more and more Western governments are unwilling to take the risk.
Across the board, both in domestic and foreign policy, the EU has produced a variety of different policies aimed at curtailing China’s power and influence. When all taken together, the picture emerges of an EU that is hardening its approach to Beijing.
Yet this doesn’t explain why the EU treads so carefully in its rhetoric or why it would allow the relationship with the US to suffer. Why take on the diplomatic cost in Washington that comes from resisting their calls for a united anti-China front if you’re going to take a tougher stance on China anyway?
A generous account would suggest that the EU is following the advice of former US President Theodore Roosevelt to “speak softly and carry a big stick”. The EU is building up its policy arsenal to contain China without actively seeking escalation and without getting ahead of itself. In other words, a hawkish strategy balanced by the actual limits of what the EU can do in a short space of time.
However, there is little evidence that such a coherent and long-term strategy exists. During summits of EU leaders and at almost moment a new decision must be taken on China, the EU’s different members have clashed and argued over the best approach.
With that in mind, it seems much more likely that the EU has stumbled into its current strategy. A series of individual decisions, mostly pointing in the same direction, adding up to a hawkish turn that was never planned at the start. And so this is why we stand where we do today, with strategy and policy and rhetoric all in different places. For while the EU is a China hawk, it is an accidental one.