China, explained.
For the Old Continent today, the urgent imperative to reduce dependence on the United States needn’t entail a drastic recalibration of China relations (Getty Images)
It’s not clear that Beijing has much to give when it comes to resolving the most vexed issues in Sino-European relations.
Subscribe to The Informer for monthly expert analysis, and to Events for advance notice of visiting world leaders and distinguished guests.
You may unsubscribe from Lowy Institute newsletters at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
Will Trump force Europe into China’s arms?Will Trump force Europe into China’s arms?
There is a certain attractiveness to arguments that President Donald Trump’s blowing up of transatlantic relations will catalyse a rapprochement between Europe and China.
At a time when Europe is scrambling to shore up its own defences after Trump pulled out the rug from underneath Ukraine, China’s assumed influence over Moscow is more valuable than ever. Foreign Minister Wang Yi’s call for Europe to be involved in negotiations on Ukraine sounded positively mellifluous after US Vice President JD Vance’s extraordinary speech at the Munich Security Conference in February.
With Trump’s promised 25 per cent tariffs on the European Union set to exacerbate the continent’s already stagnant economy, the allure of the Chinese market is particularly attractive. Individual countries such as Spain are already actively angling for Europe to reconsider its otherwise hardening stance on China.
The inconvenient truth is that any attempt to re-embrace China risks being a triumph of hope over common sense.
When it comes to Ukraine, China has consistently and perfidiously claimed neutrality. The reality is that it has played a decisive enabling role in furnishing Russia with many of the dual-use items that have been critical to the sustainment of the Kremlin’s military machine. Evidence has even emerged that China has transgressed its own putative red lines on directly supplying Russia with weapons.
Beijing has in the past proved almost completely impervious to Europe’s repeated admonishments to stem the flow of critical inputs.
Beijing is unlikely to be entirely comfortable with Russia’s actions in Ukraine and has used its leverage to strike a hard bargain economically.
China has throughout 2023 and 2024 tentatively tried its hand at brokering peace in Ukraine. Beijing’s demarches were justifiably viewed with scepticism by Kyiv and most of Europe. Its “peace plans” never appeared to evolve beyond amorphous platitudes like “respecting the sovereignty of all nations”. Aspects of Beijing’s more tangible proposals like “stopping unilateral sanctions” were clearly disobliging from the European perspective.
China’s President Xi Jinping, whose father Xi Zhongxun was a Mao-era Russia handler, is a true believer in the Sino-Russian partnership and its utility in confronting US hegemony. This picture has gradations. Beijing is unlikely to be entirely comfortable with Russia’s actions in Ukraine and has used its leverage to strike a hard bargain economically.
There is limited evidence or precedent to suggest that China will be more receptive to Europe’s current peace efforts in Ukraine. Sundering transatlantic unity has long been a cherished strategic objective for China. Beijing will have little incentive to help paper over the deep fissures in the transatlantic relationship by aiding Europe’s quest to negotiate a peace deal that both Washington and Kyiv find palatable.
China has its own intrinsic motivations to avoid the usage of nuclear weapons or a major war in Europe, its largest export market. These interests will endure irrespective of European pressure or concessions.
When it comes to Europe’s economy, China’s entrenched overcapacity and unbridled industrial ambitions make it an unlikely white knight. China’s existential challenge to Europe’s automotive industry has already led the bloc to jettison sacred economic shibboleths through the imposition of tariffs on electric vehicles.
Chinese wind turbine manufacturers are increasingly challenging previously dominant European companies in third-markets (Nicholas Doherty/Unsplash)
Volkswagen, Renault and Stellantis are integrating Chinese manufacturing nous in their quest to deliver affordable EVs.
But other instances of cooperation are far from an unadulterated positive for European industry.
Chinese companies’ rush to European build factories to circumvent tariffs will exacerbate Europe’s own automotive overcapacity problems. Most Chinese factories to date, whilst promising some local content, mostly import components for assembly from China. Bad news for Europe’s vast automotive supply chains.
Brussels is belatedly examining instituting mandatory local content requirements and making Chinese investments conditional on tech transfer. These policies directly undercut Beijing’s efforts to keep critical technology and jobs onshore.
EVs are far from the only sector where Beijing has made no bones about wanting to eat Europe’s lunch.
Europe’s once world-beating photovoltaic manufacturers are facing oblivion. Huawei and CRRC have emerged as potent competitors to European companies in telecommunications equipment manufacturing and rolling stock. Pressure from China’s mature semiconductor fab-building spree is already being felt across Europe.
Chinese wind turbine manufacturers are increasingly challenging previously dominant European companies in third-markets. Chinese original equipment manufacturers (OEMs) like Goldwind and Mingyang are even making forays into the European market with prices up to 50 per cent lower than local competitors.
Pulling punches to cleave closer to China, as several capitals advocated for in debates over EV tariffs, may serve
For now, China’s state-owned aerospace manufacturer COMAC is heavily reliant on Western suppliers. Self-sufficiency and the smashing of the Airbus-Boeing duopoly are the clear longer-term objectives.
The EU has spent the last four years developing an economic toolkit to help protect its industrial base. Pulling punches to cleave closer to China, as several capitals advocated for in debates over EV tariffs, may serve individual companies but not Europe as a whole.
As long as Beijing remains recalcitrant in prioritising self-sufficiency and production over consumption, economic opportunities for European manufacturers will narrow. Beijing’s adept promises of more agricultural market access will tempt individual governments, but stand as a relatively derisory consolation.
Pivoting towards China might have made sense in a different era where Beijing’s intentions were less certain.
For the Old Continent today, the urgent imperative to reduce dependence on the United States needn’t entail a drastic recalibration of China relations.
About the author
Henry Storey
Henry Storey is Manager - Projects, Research and Analysis at Dragoman with a focus primarily on Asia and the South Pacific.
The most-pressing world events explained by Lowy Institute experts and global contributors, in your inbox, every Thursday.
You may unsubscribe from The Interpreter at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
