Rumblings in the EU ranks as ‘de-risking’ plan for China gains momentum

The one-two of the European Union’s economic security communique – an early-stage manifesto for de-risking – and Germany’s first China strategy have the potential to cause serious ruptures in one of the world’s largest trading relationships.

Both seek to recalibrate how European countries and companies trade with and invest in China. They want to keep cutting-edge technologies away from the Chinese military and reduce dependencies on China for goods and minerals that it is feared could be weaponised by Beijing.

But each is also carefully vague on execution, reflecting the need to get the broad churches of Germany’s coalition government and an EU membership that ranges from Lithuania, a sworn adversary of China’s, to Hungary, a close ally, on board.

After a meeting of EU foreign ministers in Stockholm in May, top diplomat Josep Borrell proclaimed that all 27 members had vouched support for de-risking. One diplomat responded, in a private conversation, that if they had all agreed, it was only because nobody really understood what de-risking actually was.

In Berlin, an early draft of the foreign ministry’s hawkish proposal was watered down by Chancellor Olaf Scholz, known to favour continued engagement with Beijing.