Which way will China-EU relations go: more cooperation or increased confrontation?

This year has brought a revival of bilateral engagement, but the potential for conflict arising from divergent security perspectives is likely to endure
China-EU ties stand at a crossroads – the first path envisions a momentous improvement, the second, a deterioration in the relationship

Sebastian Contin Trillo-Figueroa

Published: 5:30am, 8 Nov 2023

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European Union leaders’ recent statements encapsulate Europe’s dual stance on relations with China, encompassing cooperation and competition.

Sino-European ties in 2024 will be characterised by a blend of collaboration on global challenges, economic interdependence and conflicts as a result of divergent security strategies, according to Jorge Toledo, the EU’s ambassador to China. This is in keeping with the union’s vision of China as a partner, competitor and systemic rival, echoing EU High Representative Josep Borrell’s speech at Peking University on October 13, when he called it “conflictual interdependence”.

Analysing the events of 2023 is crucial to forecasting 2024. This year has brought a revival of bilateral engagement, as seen in increased interactions, agreements and reciprocal leadership visits. Premier Li Qiang’s trips to Germany and France highlighted Beijing’s European priorities. Chinese foreign ministers have made visits to Europe, while China’s EU ambassador Fu Cong has advocated for enhanced ties.

In addition, key European leaders – including French President Emmanuel Macron, German Chancellor Olaf Scholz, European Commission President Ursula von der Leyen and European Council President Charles Michel – have visited Beijing. Thierry Breton, the EU chief for the internal market, is visiting China this week, becoming the latest commissioner to do so in recent months.

While these leaders have underscored strengthening economic bonds, Europe is dealing with lingering apprehensions over Chinese dominance of vital resources, market access barriers and trade imbalances. The EU has a trade deficit of nearly €400 billion (US$430 billion), an imbalance Toledo called the highest in “the history of mankind”. However, a mechanism that could address these issues – the EU-China Comprehensive Agreement on Investment – has been stuck, pending ratification, for several years.

European Commissioner for the Internal Market Thierry Breton speaks at the European Union office in San Francisco on June 22. Breton is visiting China this week, becoming the latest in a series of EU officials to visit Beijing this year. Photo: AFP

They have endeavoured to clarify the “de-risking” strategy aimed at hazard mitigation, partnership diversification, trade interaction reconfiguration and relocating operations to tackle dependencies in critical sectors. Beijing, which employs its own risk -mitigation methods, has nonetheless denounced this approach.

The most contentious issue is deploying 5G networks. While the EU has acted to prohibit Chinese providers it sees as a higher risk, no formal ban exists. As a result, member states are hesitant to act alone on China, fearing retaliation. Similarly, Europe moved in September to launch an investigation into subsidies provided to Chinese electric vehicles (EV) to counter what it called artificial market distortions stemming from state subsidies.

In response to these coordinated actions from the West, China has signalled its intentions by implementing export controls on a range of critical raw materials essential for semiconductor and EV production, including gallium and germanium. Despite the rise in tensions, economic interdependence will remain a central element in EU-China relations as these measures are driven by geopolitical considerations.

Both parties share an interest in sustaining win-win cooperation, robust connections and advancing their trade and investment partnership. They could find common ground in addressing global challenges such as climate change, public health crises and environmental protection.

02:36

French and EU leaders urge China to ‘bring Russia to its senses’ and stop invasion of Ukraine

Even so, the potential for conflict arising from divergent security perspectives is likely to endure, testing the overall relationship. Debates on human rights, contrasting values and democratic principles still drive discussions on norms and governance, underpinning the EU’s characterisation of China as a systemic rival. Meanwhile, China views Europe as an extension of the US-EU partnership rather than a geopolitical rival.

Two ongoing conflicts have become central flashpoints. The Russian invasion of Ukraine reveals differing stances. Europe supports Ukraine through sanctions against Russia and its officials, sheltering millions of refugees and championing its cause globally.

In contrast, China has adopted a more ambiguous stance. While it proposed a peace plan in February, progress has been limited, and its support for Russia can be seen in its lack of condemnation of Moscow’s actions and President Xi Jinping’s show of camaraderie with Russian President Vladimir Putin at the recent Belt and Road Forum.

Beijing and Brussels hold even more pronounced contrasting perspectives over Hamas’ attack on Israel and the latter’s subsequent retaliation. Europe initially expressed its support for Israel while China seemed to downplay Hamas’ actions.

In 2024, China’s approach to political stability will contrast with Europe’s upcoming challenges. Events such as the European Parliament elections – where mainstream parties can provide stability – are countered by the rising influence of extremist candidates. This impending political reconfiguration will influence the set-up of the European Commission.

The commission is pivotal in bolstering Europe’s strategic autonomy and fostering less confrontational relations with China. Currently, EU bodies are deliberating a new China position paper.

Already, in 2023, Europe has introduced a variety of policies, including the European Economic Security Strategy, foreign direct investment screening, the Anti-Coercion Instrument, European Chips Act, Critical Raw Materials Act and European Sovereignty Fund, all with substantial implications for China.

In this context, a pressing question emerges. Does the EU’s China strategy align with practicality and realism in a rapidly shifting geopolitical setting? Today, European engagement with China fluctuates between cooperation and strategies influenced by geopolitical competition. Crafting a coherent policy is challenging because of divergent approaches among EU institutions and a lack of coordination.

Nevertheless, Europe’s need for a unified and resolute stance on China is paramount. China’s support is also crucial as Beijing has publicly endorsed a more independent Europe – aiming to put more distance between the EU and the United States – but has yet to take substantial action to further this goal.

China-EU relations in 2024 stand at a crossroads. The first path envisions momentous improvement, underlined by increased engagement and reciprocal visits. The second suggests a deterioration in relations, leaving little room for middle ground. Time will ultimately reveal the path they choose to traverse.

Sebastian Contin Trillo-Figueroa is a geopolitics analyst with a specialisation in EU-Asia relations