Over the past decade, the political environment in the People’s Republic of China (hereinafter referred to as China) has become more closed and authoritarian. The influence of ideology and nationalism has grown, coupled with wider and more serious human rights violations. It is possible that this trend could continue. Moreover, the Chinese government’s external behaviour has become more assertive and on occasion confrontational. At the same time, China’s relations with the United States of America (USA), the European Union (EU), and many of its neighbours have deteriorated, being characterised by nu- merous points of tension. If China’s diverse domestic challenges continue to mount, its government may resort to even more aggressive foreign policy in the future.

Since 2017, EU-China relations have been on a downward spiral. In 2019, the EU described China as ‘a cooperation partner’ and ‘negotiating partner’, as well as ‘an economic competitor’ and ‘a systemic rival’. Since then, the economic competition and systemic rivalry have intensified, while the EU and China have failed to achieve notable negotiating successes.

EU-China relations are in a state of flux, being affected by numerous issues, tensions, concerns and worries. These include: economic problems, such as unfair practices and the lack of a level playing field for European companies in China; human rights abuses, such as those witnessed in Xinjiang and Hong Kong; the general state of human rights in China; global events, such as China’s actions on the interna- tional stage which are perceived as aiming to undermine the liberal world order; geopolitical threats, such as current tensions in the Taiwan Strait and the South China Sea, or worries about a possible future invasion of Taiwan.

In this context, the EU has proposed a policy of ‘de-risking’, meant to manage risks coming from eco- nomic and technological engagement with China. This new approach is in its early stages, hence char- acterised by official assessments of existing dependencies and potential risks. How exactly to imple- ment de-risking will be decided in the next few years, once all the different views of European stake- holders, such as EU institutions, national governments and European companies, have been distilled. For the moment, there is a general consensus that the EU should avoid a broad de-coupling from China and should instead focus on targeted measures where dependencies or risks are deemed to exist.

De-risking and the economic security strategy build upon policies and measures already taken by the EU over the past five years, such as: the Foreign Direct Investment screening mechanism; the Anti- Coercion Instrument; the EU Chips Act; and the Critical Raw Materials Act. The three-pronged approach of ‘Promote, Protect and Partner’ creates a framework for future steps.

Addressing dependencies, risks and supply chain vulnerabilities will require careful consideration, as the EU should avoid both the risk of not doing enough and the threat of doing too much, thereby veering towards protectionism. De-risking has been specifically proposed as an alternative to calls for de-coupling and should be seen as an exercise in risk mitigation or risk management, instead of com- pletely remaking economic relations to eliminate all risks. The policy of de-risking is therefore con- nected with a diversification of the EU’s economic ties and the quest for strategic autonomy, by build- ing Europe’s capacities and ability to act as a geopolitical actor.

One important issue that the EU will have to grapple with is the lack of unity among all Member States, as national governments and leaders have different perspectives on a host of issues, including how to deal with China. While most Member States share a similar outlook, there are some which adopt differ- ent positions, making it difficult for the EU to agree in which direction to move, let alone at speed.

The EU has adopted a way of describing its relations with China – the triptych – and a slew of policies directly or indirectly dealing with China as well as issues that stem from bilateral relations, such as de- risking. However, it lacks a comprehensive and consistent long-term strategy or a clear vision of its goals regarding China, and of where it wants bilateral relations to go. Except for its formulation of the triptych, the 2019 Joint Communication is no longer relevant as most actions therein have either been implemented or abandoned. While de-risking is in the process of being shaped and could determine a road map for future actions, it is country-agnostic and hence does not directly deal with the variety of issues and goals that specifically define or should define Europe’s relations with China for the future.

In the context of developments happening in China specifically and on the global stage generally (which include growing nationalism and centralisation of power in China; an intensifying US-China rivalry; an expanding and improving Chinese military power; and the increasing risk of a military conflict, especially in the Taiwan Strait), the EU needs to develop a more precise vision of its future relationship and goals regarding China, upon which it can then design a comprehensive and consistent long-term strategy. Such a strategy should address the gamut of issues connected, directly or indirectly, with China, such as: preserving the liberal world order; promoting sustainable global development; dealing with global issues or threats; promoting and defending human rights as well as democratic values; expanding partnerships and improving cooperation with allies; preserving peace; and preventing military conflicts.