EU-China summit: the implosion of European illusions in the face of Beijing's ruthless dominance
- Gabriele Iuvinale
- 24 lug
- Tempo di lettura: 15 min
The July 24 EU-China summit cruelly exposed a weak Europe fatally dependent on Beijing in vital areas, caught between a record trade deficit and China's relentless “Liminal Warfare.” While the EU bemoans overcapacity, predatory practices and Beijing's support for the Russian war machine (despite sanctions and WTO violations), the summit turned out to be a “dialogue of the deaf,” confirming the inescapable but belated European need for “de-risking” to survive in an unfair global landscape
The summit between the European Union and China, held on July 24 in Beijing to celebrate 50 years of diplomatic relations, unequivocally confirmed a relationship at a "clear inflection point", dominated by acute trade tensions and deep, unresolved, divergences over the war in Ukraine. The meeting, drastically cut to just one day at Beijing's request, took place in an atmosphere of palpable and widespread tension, brutally exposing the blatant structural fragilities of the EU and the increasingly aggressive and systematically problematic nature of Chinese practices.
In recent years, relations between Brussels and Beijing have inexorably deteriorated, a trend marked by the hardening stance of European governments on various critical issues: from persistent human rights violations to the blatant and unsustainable disparity in market access to China, and the perception of an uncontrolled and often distortive growth of Chinese influence within Europe itself. This escalation has had concrete and damaging repercussions, the most significant of which is the prevention of the signing of the EU-China Comprehensive Agreement on Investment (CAI), despite the conclusion of negotiations as early as December 2020. For the European Commission, the economic picture is unacceptable: the relationship is "critically unbalanced" due to "a significant asymmetry in respective market openings," with a Chinese economic model that generates "systemic distortions" detrimental to trading partners and a worrying push towards import substitution and self-sufficiency that undermines fair competition.
Non-military coercion, meaning the use of economic means to achieve political objectives, has become an increasingly serious and documented problem for EU governments and companies. China, despite its traditional rhetoric against economic sanctions, has in fact implemented coercive economic practices with growing intensity and scope, particularly after Xi Jinping's reconfirmation as president in 2023. The EU itself is the largest global recipient of this coercive diplomacy, experiencing widespread and often invisible economic pressure.
The stakes for an evidently vulnerable Europe are overtly high. With a trade deficit that hit a record €305.8 billion in 2024 (and similar projections for 2025) and a growing and unacceptable reliance on Chinese supplies in critical sectors like rare earths and 5G technologies, the EU faces a profound and self-inflicted structural vulnerability. European Commission President Ursula von der Leyen, with a bitter and perhaps belated acknowledgment, reiterated that the EU will not be able to keep its markets open to Chinese exports unless Beijing takes decisive steps to rebalance their trade relations. She also clarified that China's ties with Russia have become the "determining factor" for the future of EU-China relations, demanding greater commitment for a ceasefire and negotiations in Ukraine. For his part, President Xi Jinping attempted to downplay the severity of the situation, urging Europe to make "correct strategic choices," strengthen trust and communication, and keep markets open, vehemently denying, in a clearly self-serving manner, that Europe's challenges originate from China. He also warned, with a thinly veiled threat to European economic sovereignty, against building "walls or barriers" that would only lead to "self-isolation."
The summit thus offered a glimpse of an EU trapped in a complex geopolitical vise: on one side, squeezed by US tariff pressures, and on the other, paralyzed by its own economic dependencies on China, seemingly unable to act with the necessary force. While a point of convergence was formally found in the joint statement on climate, crucial issues – from persistent Chinese industrial overcapacity and duties on electric vehicles with related retaliations, to recent sanctions on Chinese banks for their alleged support to Moscow – remained largely and dangerously unresolved. In the background, China's "Liminal Warfare" prominently emerged, a subtle but pervasive strategy that, according to some analysts, includes espionage, cyber-attacks, and infiltration of critical infrastructure, aiming to penetrate the "soft tissues" of Western democracies and subvert their interests. This complex and asymmetrical scenario is pushing the EU towards the inevitable, yet perhaps insufficient, "de-risking" strategy – an obligatory path to attempt to strengthen its strategic autonomy and safeguard its sovereignty in an increasingly uncertain and hostile global landscape.
Recent trade war between EU and China: actions, countermeasures, and economic coercion
Trade relations between the EU and China have been marked in recent years by a growing number of disputes, particularly commercial ones. Trade tensions between the EU and China are not new, but they have intensified significantly, taking on the characteristics of a veritable "trade war" characterized by targeted actions and countermeasures. At the heart of this escalation is the EU's mounting concern over Beijing's unfair and distortive trade practices and its economic model, which the European Commission describes as "critically unbalanced" due to "a significant asymmetry in respective market openings". The International Monetary Fund (IMF) itself has highlighted how China's use of industrial policies, particularly its support for priority sectors, has a negative impact on trading partners. Economic issues are inextricably linked and rest on three key pillars in economic relations with Beijing: the instrumentalization of trade as a tool for blackmail, overcapacity, and inequitable access to the Chinese market.
Non-military coercion, meaning the use of economic means to achieve political objectives, has become an increasingly serious and well-documented problem for EU governments and companies. Experts believe that China, despite its rhetoric against economic sanctions, has in fact implemented coercive economic practices with growing intensity and scope, particularly after Xi Jinping's reconfirmation as president in 2023. According to the European Commission, economic coercion in the modern context means: "interfering with the legitimate sovereign choices of the Union or a Member State by seeking to prevent or obtain the cessation, modification or adoption of a particular act by the Union or a Member State, by applying or threatening to apply measures affecting trade or investment." Feedback from stakeholders, including businesses, indicates that coercive practices are indeed a growing problem. The EU has been increasingly targeted by China, to the extent that it is currently the largest global recipient of Chinese coercive diplomacy, including through economic pressure. A study by the Merics think tank identified 123 coercive cases between 2010 and 2022, with a marked increase in the last 4 years—a figure that, according to analysts, may only be the tip of the iceberg given the informal nature of many measures and companies' reluctance to report them for fear of retaliation (such as boycotts indirectly instigated by authorities or state-controlled media). Similar findings emerge from research by the Australian Strategic Policy Institute (ASPI), which documented 152 cases of Chinese coercive diplomacy between 2010 and 2020, most of which occurred from 2018 onwards.
China's push towards import substitution and self-sufficiency worries Brussels, which observes European companies continuing to suffer discrimination in the Chinese market, hampered by a lack of a level playing field and a business environment perceived as increasingly politicized. A complex and non-transparent legal framework on cybersecurity, restrictive rules on cross-border data flows, insufficient enforcement of intellectual property rights, and requirements leading to technology transfer, combined with a broad concept of national security, negatively affect European business prospects in China.
In this context, the EU has undertaken concrete actions, to which Beijing has responded with countermeasures, revealing a cycle of escalation:
Duties on Electric Vehicles (EVs): Last year, Brussels imposed duties on Chinese electric cars after detecting that the sector benefited from substantial state subsidies. The EU imposed duties of up to 45.3% on Chinese EVs to prevent "imminent injury" to European firms, given their aggressive penetration into the European market at lower prices.
Retaliation on European Alcoholic Beverages: In response, China introduced anti-dumping duties on European brandy, particularly French cognac, and initiated anti-subsidy investigations into European pork and certain dairy products.
Restrictions on Medical Devices and Plywood: More recently, the EU excluded Chinese medical devices from most public procurement contracts and imposed anti-dumping duties on Chinese hardwood plywood, a construction material. In another "eye-for-an-eye" dispute, the two sides reciprocally closed their respective public markets for medical device tenders. This month, Beijing limited government purchases of EU medical devices, a move in response to similar limitations imposed by the EU on Chinese medical devices in June.
Controls on Rare Earth Exports: Tensions were further exacerbated by Chinese restrictions on rare earth exports, introduced by Beijing in response to US duties in April. China has increased controls on essential rare earths and minerals exports. These minerals serve as a stark example of how China wields its dominance in certain value chains as a tool of power: Beijing controls 60% of their extraction and 90% of their refining, monopoly figures. Rare earths are an essential input for Europe's green transition, being central to battery and magnet production, but also a core element for the development of advanced technologies in defense. Europe's reliance on China for such sensitive inputs is precisely what has most driven the formulation of the European "de-risking" strategy, the cornerstone strategy of the EU Commission to protect the Union's strategic autonomy. European automotive manufacturers have already warned that Chinese restrictions on the export of rare earth-based alloys, mixtures, and magnets could cause production delays, creating further problems for a sector already under pressure from the competition of low-cost Chinese electric cars. Von der Leyen stated that the EU needs a reliable and secure supply of essential raw materials from China. "We acknowledge China's efforts in accelerating the release of licenses for essential raw materials," she stated. "We have agreed to equip ourselves with an enhanced export supply mechanism. In case of bottlenecks, this enhanced support in the supply chain support mechanism can immediately verify and resolve the problem or issue that arises". The Chinese Foreign Ministry defended the restrictions as "in line with international practice," while promising stronger dialogue and cooperation in the field of export controls.
Overcapacity and Reciprocity: Von der Leyen reiterated that the EU will not be able to maintain its markets open to Chinese exports unless Beijing takes decisive measures to rebalance their trade relations. "Unlike other major markets, Europe keeps its markets open to Chinese products. However, this openness is not equal to China's," she declared at a press conference. She added that overcapacity, subsidized production that does not meet domestic demand, and restrictions on Chinese imports by other markets, in turn, exert pressure on the EU single market. "We need to see progress on this issue because without progress it would be very difficult for the European Union to maintain the current level of openness," she warned. Von der Leyen stated that leaders focused on market access in the talks, emphasizing the principle of reciprocity and affirming that the two sides agreed to work on "concrete solutions" regarding public procurement.
WTO Case on Intellectual Property: In January 2025, the European Union took a significant step in its trade relations with China, filing a case with the World Trade Organization (WTO) over Beijing's intellectual property practices. The EU argues that China sets global royalty rates for essential standard patents (SEPs) of the EU without consulting patent holders, forcing European technology companies to accept lower royalty rates, thereby unfairly granting Chinese manufacturers cheaper access to these innovations, in blatant violation of WTO rules.
E-commerce Platform Control: In February 2025, the EC also intensified its scrutiny of Chinese online sales platforms like Shein and Temu, requesting internal documents and further details on risk mitigation measures under the Digital Services Act (DSA) in response to concerns about illegal content, consumer protection, public health risks, and data privacy.
These concrete examples vividly highlight the depth of the economic frictions that permeated the summit, rendering any "grand bargain" on trade virtually impossible and exposing the EU to a systemic economic threat.
Geopolitical issues: Ukraine, cyber-attacks, and China's Military-Civil Fusion
Beyond trade, geopolitical tensions profoundly dominated the agenda. China's stance on the war in Ukraine has been a significant and deeply disappointing point of contention for the EU. EU officials, with Costa stating that they discussed their expectations with China "at length," urged Beijing to use its influence to persuade Russia to end the war. "We call on China to use its influence over Russia to comply with the UN Charter and end its war of aggression," European Council President Antonio Costa had earlier told Xi. Von der Leyen reinforced this message: "The way China continues to interact with Putin's war will be a determining factor for our future relations". She further specified that "China has influence over Russia, just as the European Union has influence over Ukraine, and we expect China to use this influence to ensure that Russia seriously sits down at the negotiating table". Costa added that the EU demands China pay attention to its exports to Russia to avoid dual-use goods that could be employed for wartime purposes, underscoring China's special and inescapable responsibility, as a permanent member of the UN Security Council, to promote a ceasefire.
This demand comes in a context of growing and alarming tension. For the first time, Chinese financial institutions have been hit by European Union sanctions for supporting Moscow in its war against Ukraine. The European Union sanctioned two small Chinese banks, Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank, in its latest (18th) package of measures aimed at weakening the Russian war machine. This decision could provoke retaliation from the People's Republic of China, which exerted intense behind-the-scenes pressure to remove the banks from the sanctions package. During a meeting with EU High Representative for Foreign Affairs and Security Policy Kaja Kallas this month, Chinese Foreign Minister Wang Yi had issued more than one warning about China's reaction to the banks' inclusion in the sanctions package. In Brussels, Chinese diplomats, including Ambassador Cai Run, exhausted every avenue with EU officials to try and prevent their "blacklisting". China declared that it had submitted "solemn representations" to the EU's trade chief. Furthermore, reports circulated this month that Chinese Foreign Minister Wang Yi had told EU foreign policy chief Kaja Kallas that Beijing did not want Russia to lose the war in Ukraine, contradicting China's official stance of neutrality. Wang reportedly claimed that the war would divert the United States' attention from its rivalry with China, a claim Beijing denied. Earlier, Kallas had called China the "main enabler of Russia's war" in Ukraine, adding that "if China really wanted to stop the support, then there would be consequences". The strategic partnership between China and Russia, formalized with the joint declaration of February 4, 2022, represents a growing threat to European security, continuing to expand in the fields of technology and transfers of military capabilities and know-how.
Another growing concern relates to Chinese cyber-attacks against commercial and political targets in the EU. In May, the European Council accused China of being behind a growing number of "malicious cyber activities," with EU foreign policy chief Kaja Kallas warning that the bloc is "ready to impose costs" for such behavior. China's Military-Civil Fusion (MCF) strategy exploits every lever of state and commercial power to strengthen the Chinese Communist Party (CCP) and its armed wing, the People's Liberation Army (PLA), exfiltrating cutting-edge global technologies to bolster the totalitarian regime and achieve military dominance. The international activities of Chinese enterprises ultimately support the CCP's goals of expanding its influence over third countries and harming geopolitical rivals. This also occurs through the use of party cells within companies, including foreign ones, as instruments of direct control. The MCF, the Digital Silk Road, and initiatives like Made in China 2025 and China Standards 2035 place the MCF in a broader geopolitical context, with the ultimate goal of advancing China as a leading global power in terms of political influence, economic capabilities, technological dominance, and military might, and to undermine the rules-based international order.
Finally, the issue of Taiwan adds another layer of complexity. China is anxious about growing support for Taiwan among EU countries, as demonstrated by the symbolic sailing of German warships through the Taiwan Strait last year. Beijing accuses the EU and other Western actors of supporting Taiwanese "separatists," while simultaneously attempting to peel the EU away from the United States to undermine Western cohesion.
One positive aspect, amidst a backdrop of stark divergences, was the joint statement on climate issued by both sides. This reiterated their commitment to new economy-wide climate action plans, aiming to boost cooperation in areas such as energy transition, adaptation, methane emissions management and control, carbon markets, and green and low-carbon technologies. This represents one of the few areas of strategic alignment, especially in an increasingly fragmented global context. European Council President Antonio Costa thanked China for what he described as "frank" discussions, reaffirming the EU's commitment to deepen bilateral relations by addressing concerns with honesty, and emphasizing that fair and mutually beneficial trade relations are possible and should be their common goal.
The EU's strategic response: "De-risking" and strengthening economic security
The summit confirmed the "lack of impetus" in EU-China ties, as observed by Cui Hongjian of Beijing Foreign Studies University, who attributes this situation to the EU's continuous compromise with the United States. Earlier in the year, it was speculated that a Trump presidency could help the EU and China find common cause, but instead, relations became more strained, with the 27 EU member states facing pressures similar to those from China, not least the tariffs imposed on their exports to the United States.
The EU's narrative towards Beijing took a decisive turn with European Commission President Ursula von der Leyen's speech on March 30, 2023, marking a shift towards a more assertive stance, further reinforced by the publication of the European Economic Security Strategy in June of the same year. The European Commission, in its 2019 Strategic Outlook Joint Communication, decided to reduce the risk of its economic relations with China, adopting a "nuanced" strategy that simultaneously views it as a "cooperation partner, economic competitor, and systemic rival". This tripartite approach was reiterated in the European Council Conclusions on China.
During the China Summit in December 2023, von der Leyen reiterated that "de-risking" involves learning lessons from the global COVID-19 pandemic and Russia's energy blackmail, managing risks, addressing excessive dependencies, and increasing resilience. Significant progress has been made in understanding the EU's exposure to China and addressing related risks, mapping strategic dependencies and supply chain bottlenecks in trade. Several legislative acts have been adopted to strengthen production capacities in critical sectors, and the EU is pursuing new international partnerships to diversify supply sources.
A significant step was taken in January 2024 when the EC adopted five key initiatives aimed at strengthening the EU's economic security in a period of growing geopolitical tensions and profound technological changes. These actions are part of a three-pillar approach to ensure European economic security through promoting competitiveness, protecting against risks, and partnering with as many countries as possible to advance shared interests.
In detail, the new initiatives aim to:
Improve the screening of foreign investments in the EU (FDI): Prevent those that could pose a risk to security and public order. The Commission examined over 1,200 FDI operations notified by Member States. The January 2024 proposal aims to ensure that all Member States have a screening mechanism with better harmonized national rules, identifying a minimum sectoral scope where all Member States must screen foreign investments, and extending screening to investments by EU investors controlled by individuals or companies from a third country. The European Parliament has called for the expansion of screening tools to include generalized screening procedures for all stakeholders involved in critical EU infrastructure projects, including collaborative initiatives, partnerships, and technology transfers, and the establishment of due diligence rules to identify China's level of influence on investors in the Union's critical infrastructure.
Adopt greater coordination in the control of dual-use goods exports: This includes goods that can be used for both civilian and military purposes, to prevent advanced technologies from improving the military and intelligence capabilities of third countries. The Commission's White Paper on outbound investment proposes a phased analysis of such investments, particularly for sensitive technologies like Artificial Intelligence, advanced semiconductors, biotechnologies, and quantum technologies. This aspect is not currently monitored or controlled at the EU level or by Member States, despite concerns about the outflow of technologies that could be used against the EU or to undermine international peace and security.
Strengthen research and development (R&D) security: The Commission has launched a public consultation on technologies with dual-use potential, examining EU funding programs to maintain a competitive advantage. This includes the introduction of uniform EU controls on products not yet adopted by multilateral export control regimes, the creation of high-level forums for political coordination, and the promotion of discussion on R&D programs involving dual-use technologies.
Subsequently, in January 2025, the EC published a further recommendation inviting Member States to review their companies' outbound investments in third countries across three higher-risk technological sectors (semiconductors, artificial intelligence, and quantum technologies), in line with a similar regulatory regime enacted by the United States. On January 29, 2025, the European Commission also published the "Competitiveness Compass for the EU," an ambitious framework aimed at strengthening and protecting the EU's position in global markets, identifying export controls and foreign investment screening as key tools to safeguard competitiveness and prevent technology leakage from the European market. The European Union and its Member States have also adopted measures to increase Europe's resilience to Chinese economic and political coercion, with the Anti-Coercion Instrument (ACI) representing an important measure to counteract pressures affecting trade or investment.
Despite these efforts, "it is not yet time for complacency". The experiences of states like Australia and Lithuania demonstrate that, even in cases where China is serious about pursuing economic coercion through trade and investment restrictions, the effects can at least be partially contained and even offset over time (e.g., by redirecting exports to other markets or sourcing capital from like-minded partners). However, the EU and its Member States must not underestimate the depth and breadth of the risks that future episodes of Chinese economic coercion (and, more generally, predatory economic operations) could entail, as Beijing is "more than ever willing to pay a high economic price to pursue its political objectives," especially when fundamental interests concerning Taiwan, Hong Kong, or Xinjiang are at stake. At the same time, China continues to explore new tools and approaches for economic coercion, as demonstrated by the pressure exerted on multinational corporations to cease trade with Lithuanian entities in relation to the dispute over the upgrading of Taiwan's representative office in Vilnius.
The renewed European regulatory framework, however, still presents vulnerabilities, with some Member States failing to comply with related implementation obligations. The European Parliament has urgently called on Member States to systematically implement existing regulations and strengthen controls on foreign direct investments and the resilience of critical infrastructure. Awareness of Chinese activities has grown, with EU institutions expanding the resources of competent ministries and intelligence agencies, even creating new institutions to detect and counter Chinese political influence and disinformation.
In summary, the EU-China summit on July 24 was more a reconnaissance of entrenched positions than a breakthrough for concrete solutions. It underscored the complexity of an increasingly unbalanced relationship, where the EU desperately seeks to rebalance its economic and security interests while maintaining dialogue with an assertive global power. The "dialogue of the deaf" described by Josep Borrell in 2022 unfortunately still rings true, with China reluctant to engage in substantive discussions on key issues and focused on its own positive narrative. The European situation is exacerbated by the awareness of being under attack from Beijing's "Liminal Warfare", a war conducted at the edge of observability that aims to penetrate the "soft tissues" of Western democracies through covert, coercive, and corruptive means, exploiting its control over technological assets, strategic infrastructure, and global supply chains. This context makes it even more imperative for the EU to develop an effective "de-risking" strategy and strengthen its strategic autonomy, not only to protect key industries but also to safeguard its sovereignty and security in a rapidly evolving geopolitical landscape. The lack of adequate controls on interference risks in European public procurement for security equipment, as in the case of Nuctech (a company partially owned by the Chinese government and linked to the United Front policy), and the presence of Chinese students in European universities in dual-use sectors, are further vulnerabilities that the EU must urgently address through enhanced regulatory oversight and thorough controls on ties with the Chinese government. The modernization of regulatory processes becomes the primary requirement for self-defense and for shaping the new globalization, keeping the definition of the security perimeter of the European Union and individual Member States at the core of political action.
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