EU softens China strategy by adopting ‘de-risking’ approach

EU leaders have launched a policy towards China of “de-risking”, a softening of its unofficial “decoupling” approach that reflects concerns over the economic damage of cutting off the world’s second-biggest economy or trade wars.

The decision was agreed swiftly at a summit of leaders in Brussels after the European Commission chief, Ursula von der Leyen, went into the summit having built a meeting among the 27 member states.

The bloc took the view that supply chains for chemicals for electric vehicle batteries, semiconductors and many other critical products were especially vulnerable to a severing of ties with Beijing.

“The EU will continue to reduce critical dependencies and vulnerabilities, including the supply chain and will de-risk and diversify where necessary and appropriate,” the commission said in a formal policy position adopted by the bloc. “The EU does not intend to decouple or to turn inwards.”

The EU’s six-paragraph text on China is designed to protect its own economic interests but at the same time give it a wide berth on diplomatic issues.

It called on China “to press Russia to stop its war of aggression, and immediately, completely and unconditionally withdraw its troops from Ukraine”.

There were also strong words on Taiwan, expressing concern about “growing tensions in the Taiwan Strait” and opposition to “any unilateral attempts to change the status quo by force or coercion”.

Von der Leyen told reporters after the summit that “diplomatic de-risking” was central to the bloc’s approach. It allowed the EU to be tough on China over issues such as Russia but at the same time leaving channels open for trade and for dialogue on concerns such as global heating.

“Diplomatic derisking is also important because we want to keep open communication lines with China on issues where we agree,” she said.

But the bloc also had to reduce its dependency on China for some critical raw materials, including chemicals for electric car batteries; put barriers in place to change the balance of trade.

Von der Leyen told reporters that the EU’s trade deficit with China had more than tripled in the last 10 years, to almost €400bn.

The bloc will pursue new barriers including guards against what one diplomat called “technological leakage” and reducing dependency on materials for products, including electric vehicles.

The position is considerably softer than that of the US, which is itself trying to repair relations with Beijing.

Conflicting reports in recent days about whether an alleged Chinese spy balloon collected data over the US before it was shot down in American airspace in February have highlighted those efforts.

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On Thursday, the Pentagon said that the balloon, which US authorities say was designed for espionage, did not collect data from US airspace on its journey from Hainan to South Carolina.

But the Wall Street Journal, citing sources familiar with the investigation into the balloon, reported that the floating object did collect data but that it was not sent back to China.

Beijing denies that it was a spying device and says that it was a civilian weather monitoring balloon that had blown off course.

On Antony Blinken’s recent trip to Beijing, Chinese officials reportedly asked the US secretary of state that the details of the investigation conducted by US defence intelligence agencies not be made public.

There has been no official confirmation of the investigation’s contents but certain findings appear to have been leaked, including that the balloon contained US technology.

Separately, Von der Leyen played down attempts by Poland to reopen a row over the EU’s draft migration legislation agreed earlier this month in what she hailed as a “watershed moment”.

Additional reporting by Amy Hawkins


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