Russia’s invasion of Ukraine has sent shockwaves across Europe that will likely bring about profound changes to the continent. Among its many revelations, the outbreak of war has forced Europe to come face-to-face with its dependencies in strategically important sectors such as natural gas, critical metals, and agriculture. At the same time, this episode has also shown in very clear terms that sanctions and the economic levers of influence that derive from asymmetric economic interdependencies now play a central role in Europe’s exercise of power, particularly in response to armed aggression. Perhaps more fundamentally, Russia’s invasion of Ukraine seems to demonstrate for many that interdependence is not the bulwark against armed conflict that it was once believed to be. Meanwhile, the exploitation — or weaponization — of interdependence is rapidly becoming a normalized practice in international relations. While the war in Ukraine has dominated the discussion in Europe in early 2022, the shifting views on the benefits and risks of complex economic interdependence have a longer, more storied history.
One important character in the history of European debates, particularly in the last five years, is China. In one respect, Europe’s conversation about dependence and vulnerability is intricately linked to the process of globalization and how Europeans consider their place in that process. Indeed, Europe is traversing a moment of deep self-reflection on the free-market, efficiencymaximizing, just-in-time brand of liberalism that has characterized the last thirty-plus years of global economic expansion and that has largely dominated policy thinking in Brussels and many European capitals. In another respect, the vulnerabilities Europeans increasingly perceive when considering their dependencies relate to the “return of geopolitics”, and in particular the increasing use of economic policy tools—including coercion—to achieve broader political and geopolitical goals, or so-called “geoeconomics”. China has emerged as an important, and in many cases an increasingly central player in both areas. Indeed, the idea that Europe has grown dependent on China has become a common refrain across the continent, especially when the trade war between the United States and China started, and since the Covid19 pandemic began.
This report sets out to examine how this notion of dependence relative to China is understood in Europe, and how it influences policy making across the continent. Much of the research and analysis done in preparing this report took place prior to Russia’s invasion of Ukraine on February 24, 2022. Still, as also evoked in many chapters below, the ensuing events will further structure how Europeans understand the notion of dependence and vulnerability. As such, Europe’s relations with China will necessarily be impacted, particularly as China positions itself relative to Europe’s shifting geopolitical context. The analysis found in this report, therefore, will help to lay some of the groundwork for considering what comes next in the Europe–China relationship.
Specifically, the report examines how dependencies on China are presented in European public and policy-level debates. Through eighteen case studies of countries across Europe written by analysts with keen insights into national contexts, it seeks to illuminate if and how this notion shapes policy in each country. As demonstrated in the initial chapter on the European Union, a robust body of work is being done by EU institutions to understand Europe’s dependencies and craft policies to address them at the macro level. But how is dependence on China understood and discussed at the state/member-state level? That is the common question that guides our report. While there is a broad, rich literature on dependence and interdependence, we do not establish a clear definition of these concepts from the outset. Instead, the report seeks to examine the ways in which dependence with regard to China is perceived, understood, and communicated in different European states. This bottom-up approach, common to all ETNC reports, allows the reader to piece together a mosaic of different perspectives on dependence toward China and compare them with one another. We therefore encourage the reader to discover the richness of the analysis within the chapters themselves. Furthermore, the report does not seek to comprehensively study the extent of Europe’s actual dependencies on China in detail, though some chapters do explore whether various narratives on dependence (or the absence of such a narrative) appear to have a basis in reality.
Painting a detailed picture of how these manifest at the national or sub-national level is beyond the scope of this report, and seems even to be beyond the scope of many governments, at this stage. The European Commission’s work has begun to map out Europe’s dependencies, particularly in strategic sectors, and by exploring the notion of resilience indicators. While written independently, our report makes a qualitative complement to this ongoing work. The analysis below provides a brief overview of what we as editors have observed from our reading of the chapters that follow on how Europeans perceive the notion of dependence on China A first observation from our country-level analysis is that there is a broad diversity in the content and intensity of public debate and in the policy-level assessment and understanding of dependencies on China across Europe. Beyond the EU institutions, surprisingly few states have made concerted efforts to assess their dependencies with any degree of depth. For many, the framing of the policy debate on dependence in a broad sense is being structured and elaborated at the EU level, or results from pressure by the United States, particularly on key issues such as 5G or in the context of Washington’s broader approach to strategic competition that emerged in earnest from 2018 onward.
In only a quarter of countries observed has there been a significant level of public debate coupled with concerted policy-level action to both understand and address issues around dependence. France, for instance, in the context of its broader reflections on strategic autonomy, has internalized assessments of dependence and vulnerability with a level of coordinated, interagency reflection on the topic—a broad process that does not look at China exclusively. In the Netherlands, one of the largest trading nations in Europe relative to the size of its economy, the issue of dependence is raising concerns as both an economic and a national security issue. The government in The Hague has launched a number of processes to identify the country’s dependencies, though they remain in the early stages and, again, take a broad scope that extends beyond China. In Denmark, meanwhile, legislative measures have tended to focus on questions of security, prompted by concerns about Chinese investments in Greenland and Huawei’s position in Denmark’s critical digital infrastructure. The Danish national debate was galvanized in particular by revelations of instances of self-censorship on the part of Danish officials during diplomatic visits by Chinese leaders, and Copenhagen has recently introduced different policy measures to address the perceived risks of relying on Beijing in strategically important areas. In Germany, while the notion of dependence has been prevalent in the public policy debate, policy makers in Berlin remain focused on keeping a balance between “addressing short-term concerns and pursuing strategies to reduce economic and political dependencies”. In Lithuania, on the other hand, the evaluation of dependence on China has played a central role in the country’s foreign policy shift. This has, notably, manifested itself in a preemptive campaign to reduce dependence on China that even preceded China’s recent coercive measures against the country and its economic interests.
Other countries have taken to policy solutions despite the lack of a broad public debate on the topic of dependence on China. This indicates that policy makers, and to some extent the political elite, have accorded a degree of priority to the issue, despite the lack of public “concern”. In Finland, the government has notably warned companies against “becoming over-reliant on the Chinese market” and is particularly keen to avoid dependencies that could compromise technological and security cooperation with the United States. Romania has also moved in favor of deepening interdependencies with “likeminded” value partners, particularly in the Euro-Atlantic space. Though China is not explicitly mentioned as a point of concern by Bucharest, such logic nevertheless helps to explain moves such as the cancellation of the Cernavodă nuclear power project or the exclusion of Chinese vendors from the 5G market, as concerns around dependence have gained a degree of political traction. Poland, meanwhile, appears more conflicted. While China’s coercive trade actions against Lithuania have raised the bar of policy awareness, dependence on China is generally thought to be low and public debate largely absent. Warsaw now seems to be aiming to balance concerns that arise from pursuing deeper engagement of China with the desire to increase exports and investment, which partly explains why a law enacting a de facto cordoning-off of the 5G market from Chinese vendors has yet to be enacted. Russia’s invasion of Ukraine, however, has set off alarm bells for Poland that are increasingly ringing with Chinese undertones. In Belgium, the notion of dependence is gaining limited public attention via concerns about investments and network security. While the regional diversity of elite perspectives constrains the adoption of EU initiatives, concerns about China are facilitating a degree of convergence and there is growing attention in the government and parliament to take initiatives to dependence on China, though it is unlikely to become a major factor in national policy debates.
In a third grouping of countries, there is a significant level of public debate over dependence on China, but this has not necessarily translated into concerted efforts to assess and address such issues. The chapter on the Czech Republic, for instance, illustrates how dependence on China in some countries is widely taken as a given, and even instrumentalized for political purposes. There has been little to no public effort to verify or comprehensively understand such dependencies, which appear in fact to be rather limited. Similarly, in the context of the United Kingdom, where the debate also differs from that in other countries in the report because it is no longer an EU member state, the concept of strategic dependence on China appears to be also utilized as a justification for a more hawkish foreign policy stance, though the change of policy on Huawei could be read as an indicator of greater priority being attached to the issue. In the cases of Austria and Spain, the dependence debate on China is considerably less polarized, in many ways because it is viewed through the prism of the EU. This is largely due to the relatively limited direct dependence on China in these countries. At the policy level, this has led to clear support for measures that augment Europe’s strategic autonomy. In Sweden, there has been a significant level of public concern on questions related to reliance on China, including in 5G networks, Geely’s ownership of the Volvo and the Chinese state-sponsored boycott against H&M. While the Swedish government acknowledges a general reliance on China in many fields, it typically presents this state as an unavoidable fact rather than as a problem that can be addressed. Although there are no indications that Sweden will abandon its resolute opposition to what may be interpreted as protectionism, its pro-free trade approach is increasingly being coupled with a recognition of the security risks associated with economic flows. Croatia, meanwhile, has deepened economic relations with China in the past five years, but overall these relations remain limited in scope. Political and business elites do not seem worried about potential direct or indirect dependence. At the same time, the Croatian media have become more critical of China, reflecting a shifting debate at the European and transatlantic level.
A final grouping of countries has a visibly limited public debate on the question of dependence with regard to China, while the level of priority given to addressing issues in this area is also seemingly low. Still, this does not mean that attention is not given to the issue in these countries. Portugal and Greece have attracted attention because of major Chinese investments into national infrastructure, but the public debate on dependence remains limited there, as well. Lisbon seems rather intent on maintaining a “good and close relationship with China”, whereas Athens desires to avoid confrontation with Beijing on “sensitive political issues”. Latvia, similarly, views its dependence-related vulnerabilities as very limited, as hopes of deepening economic relations with China that accompanied the development of cross-regional formats like the 16+1 never materialized. Nevertheless, Riga is keen to avoid any anticipated and unforeseen consequences that may derive from a pronounced “break up” with China in the image of its neighbor, Lithuania.
While the above categorization suggests that Europeans operate at different speeds, the sense that Europe is dependent on China in various ways has certainly been gaining traction. Europeans have actively and willingly been contributing to the deepening of ties with China for decades, forging increasingly complex interdependencies. What now seems to have changed is the evaluation at various levels of European society—from the general public to policy makers to businesses and industry players—of the associated risks. Here, it is useful to note how Europeans have “woken up” to this question, the types of dependence that are perceived in different countries, and what types of policy prescriptions are flowing from this process.
Europe’s discussion of its own dependencies on China has evolved through a series of “wake-up calls”, or moments of revelation about national and European relations with China. At the economic and technological level, a wave of Chinese investments into Europe in the mid-2010s (and even before, in the case of investments into Greece and Portugal) served to shape national discussions about the changing nature of relations with China. Arguably, the most emblematic of these was the acquisition of the German robotics firm Kuka by Midea in 2016. This proved an important turning point not only in Germany because it demonstrated China’s broader ambitions for leadership in cutting-edge industries and the shift of Europe-China relations into an era of more direct economic competition. Debates that would follow about 5G further highlight this shift and introduce in particular the idea that Europe could become dependent on Chinese technology providers in the context of a sweeping digital transformation. In parallel, human rights, governance, and geopolitical concerns have further defined the notion of risk.
The hardening of China’s authoritarian political system in recent years has had a marked impact on how China is perceived, as have debates in many countries about Hong Kong, the oppression of Uyghurs and many other human rights concerns. The now well-established US-–China rivalry has also induced a geopolitical rethinking in many countries and squarely contributed in a broader turn toward a more “geopolitical Europe”, particularly as the weaponization of trade and technology becomes an increasingly defining feature of the strategic competition between Washington and Beijing. Crucially, the dependencies and interdependencies that Europeans have forged with China will be confronted more and more with those developed in relations with the United States, fueling the impetus for Europe to nourish its own resilience. The Covid-19 pandemic has been an important watershed in the public debate on dependence, vulnerability, and resilience across much of Europe, particularly given the prevalence of perceived dependencies on China for medical equipment.10 While many of the initial challenges posed by the pandemic proved surmountable, it has served as a catalyst for a broader reflection on Europe’s dependencies and vulnerabilities. As the pandemic persists both globally and within Europe and China specifically, a wide range of supply chain issues have emerged and impacted not only businesses, but also the daily lives of Europeans. Another key moment in European debates on China and dependence has been the dramatic downturn in Lithuania’s relations with Beijing, and in particular China’s use of informal economic coercion to punish Lithuanian businesses and, importantly, those who include Lithuanian components in their supply chains. For many, the saga has proven to be a wake-up call for how the leveraging of even low levels of perceived dependence on China can have a significant economic—as well as political—impact. Finally, Russia’s invasion of Ukraine has brought the debate on dependence to the front and center of the European discussion, and what Europe views as Beijing’s tacit support for Moscow has already started to move that discussion toward one that includes China.
The compounding of these various alarm bells, which are often augmented by specific developments in each country, has ultimately shaped a multi-faceted discussion around Europe’s dependencies on China. Trade dependencies, and the reliance on Chinese suppliers for critical goods in particular, often predominate the discussion. The European Commission, for instance, has identified 137 product categories in the most sensitive ecosystems—Aerospace & Defence, Digital, Electronics, Energy Intensive Industries, Health and Renewable Energy—in which the EU can be regarded as strategically dependent. This means that, for these product categories, extra-EU import sources provide more than half of the EU's demand, that these foreign import sources are highly concentrated, and that the EU's production cannot cover its extra-EU imports. While these products make up around only 6% of the EU's total import value, roughly 52% of the import value these products come from China. Yet, such dependencies do not affect all countries equally, and many of the chapters below suggest that the concerns may in some cases be overblown (whether intentionally or unintentionally). More needs to be done at the national level to assess strategic vulnerabilities in a broad sense, and not just with regard to China. The chapters that follow highlight that the notion of dependence in Europe’s various discussions of the topic runs well beyond the concept of strategic goods. The following map provides an overview of just some of the ways in which discussions on China and dependence are framed in different corners of Europe.
Taken from the Annual Report of the European Think-tank Network on China (ETNC), April 2022
