Carnegie Europe – 10/12/2020

Europe understands it needs to get tougher on China, treating it as a systemic rival and a security challenge, not just a trade partner. But the position is not homogenous—Europe needs to forge a common approach within.

Europe’s trade competitiveness—and Germany’s in particular, given its export and investment exposure to China—nurtures economic dependency and geopolitical timidity.

Europeans realize they cannot claim strategic autonomy if they are dependent on China for health supplies and become dependent on Chinese 5G and AI, and they realize that Beijing’s expanding economic influence through targeted strategic investments could translate into rival geopolitical influence.

Europe is ready to work with the United States on China, but not exactly on U.S. terms. The United States also has to make some steps toward the EU. For instance, recognizing that China is a necessary partner for global, multilateral objectives like climate, that there is a shared interest in maintaining global institutions like the WTO and the WHO—with a shared transatlantic interest in reforming them—and that protectionism is not the way forward.

Europe is right to insist that a Cold War rhetoric—from the United States toward China—could easily escalate into self-fulfilling prophecies and confrontations that all sides should wish to avoid.

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