As of: 03/30/2023 4:24 p.m
Shortly before her Beijing trip, EU Commission President Ursula von der Leyen announced that the EU would take a much tougher stance on China. The investment agreement must be “reassessed”.
According to the will of the Commission in Brussels, the EU should realign its relationship with China. According to EU Commission President Ursula von der Leyen, Europe must react to the increasingly aggressive economic policy of the People’s Republic. Von der Leyen said so in a keynote speech in Brussels just before she will travel to Beijing with Emanuel Macron next week.
“Our relations are unbalanced and increasingly influenced by distortions created by China’s state capitalist system,” von der Leyen said. And: “It might happen that due to the policy change in China, we have to develop new defense tools for some critical sectors,” she added.
The EU must become more independent and, above all, minimize economic risks in relation to the most populous country in the world. “We’ve been seeing a very deliberate tightening of China’s overall strategic stance for some time,” von der Leyen said. This goes hand in hand with the country becoming increasingly self-confident.
Risk reduction instead of decoupling
However, von der Leyen also made it clear: “I think it is neither feasible nor in Europe’s interest to decouple from China.” Instead, she promoted an open exchange, risk reduction instead of decoupling. It is crucial to ensure diplomatic stability and open communication links.
After all, nine percent of EU exports go to China, and more than 20 percent of imports come from the Asian country. This imbalance is increasing, but the majority of trade does not involve any risks. However, it must be ensured that economic relations promote the prosperity of both sides.
Reassessment of the Investment Agreement
From von der Leyen’s point of view, the investment agreement with China that has already been negotiated but is not yet valid must be reassessed. She warned that trade and investment “related to China’s significant merger of its military and commercial sectors” could pose risks to Europe’s economy or security.
“We must ensure that the capital, expertise and knowledge of our companies are not used to bolster the military and intelligence capabilities of those who are also systemic rivals to us,” von der Leyen said. Existing tools would need to be applied more consistently to address security concerns and economic distortions.
At the same time, she announced that her authority will present the first ideas for a targeted instrument for investments abroad this year. This would only affect “a small number of sensitive technologies where investments may lead to the development of military capabilities that pose a threat to national security”.