For Europe, the triggering of “China risks” would be even more painful than Russia’s withdrawal from gas, says an expert

Russia’s war of aggression and its economic consequences give an indication of what concerns the West may face with China.

That’s what the Program Director of the Institute for Foreign Policy says Mikael Wigell in an interview with radio Ykkösäamu.

Relations between China and the West are not in the best shape, the country’s economic growth is stuttering due to the strict corona line, and Wigell sees the rise of protectionism in the economy of China and the whole world.

– It can be seen that more sanctions are imposed on China and China responds with economic sanctions. In China, new legislation is also being prepared for the nationalization of companies.

According to Wigell, European companies should be on their guard.

– There may still be situations where Finnish companies also have to choose which side to operate in, says Wigell.

According to Wigell, the worst scenario is if China’s aggressive approach to Taiwan escalates. China has not accepted Taiwan, which was founded in 1949, but considers the island nation a province belonging to it.

– Then we might face a situation similar to the one in Ukraine. Western countries would isolate China’s economy and then we would be in a really bad situation.

Europe and China held official trade and investment talks last week, but they didn’t really yield results.

The ratification of the investment agreement between the EU and China has been on hold due to the security law in Hong Kong and the ensuing round of sanctions, says Nordea’s chief economist Wind Birch First thing in the morning.

– It seems that the dialogue between China and the EU is scarce.

According to Koivu, Finnish companies are more and more aware of the risks as China’s economic policy line has tightened.

– But companies want to be where there are growth prospects. It is part of the palette to also notice those possibilities.

In the early days of the corona pandemic, containers stuck in Chinese ports and transport bottlenecks woke the EU up to think about increasing self-sufficiency, diversifying imports and production structures.

There are still vulnerable points. Wigell takes, for example, the EU’s ambitious green transition and the electrification of car traffic.

– It requires critical battery metals, which China controls almost completely. We are in a pretty bad mess if China starts playing its power game.

According to Nordea’s Tuuli Koivu, the drop from leaving China would be “really huge”.

– Now we see how difficult it is to break away from Russian energy. But we are many times more dependent on China.

– Even with a 10-20 year horizon, it (separation) would be economically and probably politically quite impossible.

However, according to Koivu, it is important to distinguish strategic areas where independence must be increased.

– Of course, we cannot drift into an even wilder situation than with Russia. But I would hope that the benefits that economic cooperation has brought would also be understood.

Wigell also states that a complete disengagement would probably be impossible, because according to him, the dependence on China is already so far.