At the core of many EU Commission and member states’ recent discussions of China is the concept of “de-risking.” Distinct from “decoupling,” the concept focuses on mitigating risks and limiting strategic dependencies in Europe’s relationship with China. They would achieve this using the EU’s economic defenses more effectively and engaging in open and frank dialogue, while remaining open to targeted cooperation and economic ties that are considered “un-risky.”
On July 13, Berlin unveiled its long-awaited Strategy on China, which states that de-risking is “urgently needed.” Germany is China’s largest trading partner in Europe, it receives far more Chinese investment than any other EU member state, and the German automotive industry alone constituted more than 40 percent of the EU’s foreign direct investment into China in 2021. These deep economic ties mean that Berlin’s approach to Beijing has an outsized influence on those of its neighbors. The Strategy on China may best be described as a position paper, rather than an exhaustive policy blueprint, but it nevertheless serves as an important reference point for Brussels and European capitals as they consider recalibrating their approach towards Beijing.
As introduced by European Commission President Ursula von der Leyen in March, “de-risking” includes not just economic but also diplomatic and geopolitical considerations. Yet in a missive from late June, the European Council - which, together with the European Commission, forms the executive arm of the European Union - only broached “de-risking” in economic security terms. In October, the Commission launched a risk assessment of, initially, four critical sectors (semiconductors, AI, quantum computing, and biotech) relevant in the context of the EU’s exports to China. The number of sectors assessed would likely have been higher had it not been for reluctance among some of the EU member states.
Discrepancies between the Commission and member states underscore the ongoing debate about what it means to “de-risk.” Even as many EU member states broadly agree on the challenges posed by contemporary EU-China relations, their post-pandemic approaches to re-engaging with Beijing have taken very different forms. What is the state of the de-risking China debate following the release of Germany’s China Strategy, and what will de-risking ultimately mean in practice?
In this round of MERICS’ EU-China opinion pool, MERICS Analyst Grzegorz Stec asked several experts:
What does it really mean for Europe to ‘de-risk’ its relationship with China?
This debate was compiled in collaboration with ChinaFile.