EU’s China ‘de-risking’ plan targets AI, semiconductors, quantum tech, biotech – South China Morning Post

A report published on Tuesday does not name China, and the EU asserts that the strategy is country-agnostic.

Breton told a press conference that “this is not against anyone”.

“This is not against any continent, country or whatever, it is for us in Europe. We are working for the general interest of our fellow citizens.”

European Commission President Ursula von der Leyen is seen in the European Parliament in Strasbourg in February. Photo: AFP
Other, more immediately adversarial actors such as Russia and North Korea do not have ready access to EU technology, nor does it flow quite as freely to Iran as it does to China.

However, it is believed that the focus on China – though subtle – will make it even more difficult to convince an already sceptical group of prominent member states that de-risking is necessary.

Eventually, curbs could be placed on exports or investments made by European firms in hi-tech sub-sectors identified as high risk. The policy could also lead to the deployment of EU funds to bolster industries seen to be under threat.

Agathe Demarais, an expert on geoeconomics at the European Council on Foreign Relations, described the list as a “key signal of the bloc’s willingness and ability to pursue efforts to de-risk from China”.

EU trade chief heads to China for prickly talks amid EV and de-risking disputes

“It provides concrete insights into the EU’s thinking about what the risk of doing business with China really is – a key question for the EU to answer before initiating any risk mitigation efforts,” she said, adding that the narrow list reiterates Brussels’ stance “that it is willing to de-risk, not decouple, from China”.

Six more technologies are in line for investigation next spring. They are advanced connectivity, navigation and digital technology – including internet of things and distributed ledger technology mostly associated with blockchain – advanced sensing technology, space and propulsion technology, energy technology, robotics, and advanced materials.

However efforts to compile the list have been beset by internal haggling between the commission’s pro-trade and protectionist factions, sources said.

There are disagreements on how much control the EU should assert over private companies, but also fears that opening the coffers for state aid would be a lopsided move to benefit the big players among member states, including France and Germany.


China restricts critical metal exports following Western semiconductor curbs in latest trade war

China restricts critical metal exports following Western semiconductor curbs in latest trade war

The European Commission will now conduct risk assessments with its 27 member states to see how and where they are exposed when it comes to technological security and leakages in critical technologies.

It hopes to conclude this by the end of the year, but insiders said that the timeline was “extremely optimistic” given the complexity of the technologies at hand – as well as the expected resistance from member states.

While member states have loosely thrown their rhetorical support behind a plan to “de-risk” ties with China, there is little coherence on how exactly to do so.

France, for instance, has pushed for an investigation into Chinese subsidies of electric vehicles, announced by the EU last month, but Germany opposes it.

Chinese envoy takes aim at Europe’s ‘de-risking’, national security fears

Asked at a Berlin forum last week about the risk of a trade war emanating from the probe, German Chancellor Olaf Scholz replied: “Obviously this will not happen.”

China, meanwhile, has repeatedly warned that de-risking is a euphemism for decoupling.

On a trip to Beijing last month, trade chief Valdis Dombrovskis emphasised that the bloc wants to maintain strong business ties with China, but made clear that the nature of these relations must change.

In private meetings, Chinese interlocutors appeared more concerned about 5G bans and the electric vehicle investigation than economic security, according to people familiar with the trip.


China has built 6 times the number of 5G towers in 3 months than the US has installed in 2 years

China has built 6 times the number of 5G towers in 3 months than the US has installed in 2 years

Also on Tuesday, the European Parliament approved the adoption of an “anti-coercion instrument”, a powerful trade weapon that would allow Brussels to slap tariffs, quotas, export controls, or market freezes on countries seen to be engaged in economic bullying.

The vote passed by a landslide, with a series of lawmakers taking the floor to state that the tool would have been useful to counteract China’s perceived economic coercion of Lithuania in 2021.

Lithuanian exporters found themselves frozen out of the Chinese market after the Baltic country welcomed the opening of a controversially named Taiwanese government office in the capital Vilnius.

Marketa Gregorova, a Czech member of the European Parliament, said the instrument was a “direct response to Chinese threats and coercion of Lithuania, a member state, when they dared to call their Taiwanese embassy Taiwanese”.


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