Officially, the approach does not target China. But this country, both a partner and strategic rival of Europe, is on everyone’s minds, just like Russia. The European Commission unveiled this Tuesday, October 3, a list of four strategic areas which must be better monitored and defended against rival states like China.
This list, expected for several months, includes artificial intelligence, semiconductors, quantum technologies and biotech. The four sectors identified this Tuesday are characterized by their significant impact on society, the possibility of dual civil and military use and risks in terms of violation of human rights.
This announcement comes as the European Union (EU) opened an investigation last September into alleged illegal aid from Beijing to Chinese electric car manufacturers, sparking tensions with the Asian giant.
New announcements expected in the spring
As early as June 20, the Brussels executive detailed a strategy to better defend European economic interests while remaining an open continent. The European Commission then announced the establishment of a list of essential technologies for which risk mitigation measures would be considered.
In order to ensure its security in the key technologies identified, the EU could resort to different types of measures which remain to be decided: international partnerships, support for European sectors or new response tools such as export control instruments or investments.
Announcements are expected in spring 2024. Beforehand, the European Commission wants to dialogue with the Twenty-Seven to precisely identify, by the end of 2023, the risks to be mitigated. The debates promise to be intense. Member countries are notoriously divided between supporters of all-out free trade and defenders of an interventionist approach in the name of sovereignty.
The “end of the era of naivety”
“Today we deliver on our promise to reduce risks to the European economy […]. This is an important step for our resilience,” said European Commissioner for the Internal Market, Thierry Breton.
“We must constantly monitor our critical technologies, assess our exposure to risks and, where appropriate, take action to safeguard our strategic interests and security. Europe adapts to new geopolitical realities, ends the era naivety and acts as a real geopolitical power,” he added.
The Covid-19 crisis in 2020 and then the war in Ukraine caused an electric shock in Europe. The pandemic has revealed the fragilities of supply chains affected by border closures in China, while the conflict with Russia has shown the risk of dependence on Russian gas.
A new device approved by MEPs
The publication of this list comes as MEPs, meeting in plenary session in Strasbourg, definitively approved at midday a new European instrument aimed at punishing any country using economic sanctions to put pressure on an EU member. . The European Commissioner for Trade, Valdis Dombrovskis, welcomed “a major reinforcement for the EU’s capacity to defend itself”.
This tool does not explicitly target anyone, but Beijing is also clearly in its sights. It could be used in a conflict, for example like the one currently pitting Lithuania against China, European officials explained.
The Baltic country accuses Beijing of blocking its exports to protest against the opening of a Taiwanese diplomatic representation in Vilnius. China considers Taiwan to be part of its territory. For now, the EU has initiated disputes within the World Trade Organization (WTO).
Different types of retaliation
With the aim of dissuasion, the EU may resort to different types of retaliation: freezing of access to public markets, blocking of marketing authorizations for certain products, blocking of investments, etc.
In addition to this instrument, in recent years the EU has equipped itself with a range of tools to defend its economic interests to diversify its suppliers, produce more in Europe, demand the opening of public markets, etc. The Commission has simplified the granting state aid to strategic sectors such as electronic chips. Last March, it proposed a text to secure its purchases of critical raw materials.
Valdis Dombrovskis, who returned last week from a trip to China, was also interviewed this Tuesday afternoon by European deputies on trade relations with this country. The EU’s trade deficit with the Asian giant has reached almost 400 billion euros in 2022.