For years, some European leaders viewed EU-China relations as a systemic challenge — serious, certainly, but never so urgent that it couldn’t be postponed for another day. Others simply saw China as a simple economic opportunity to exploit.
But the mood is now shifting. Even with war on Europe’s doorstep, turmoil engulfing the Middle East, and a transatlantic alliance in tatters, confronting the China Question has climbed to the top of the European Union’s agenda.
Against a bleak backdrop of economic stagnation, surging unemployment and record support for once-fringe far-right parties fueled by dissatisfaction with declining living conditions, EU commissioners are meeting on Friday to discuss how to counter China’s growing footprint in Europe.
The high-level talks follow a call last week from five EU member states urging Brussels to take a tougher stance on trade defense measures, pursue anti-subsidy investigations more aggressively and be less shy about imposing tariffs.
Europe’s anxiety over China is justified. Recent trade data show that China now accounts for roughly 30% of global manufacturing output — nearly triple its share of consumption — leaving a vast surplus of goods searching for markets.
Since 2021, Chinese exports to the EU have grown by 6% annually, while its imports from the bloc have shrunk by 2.5% each year, according to economic think tank Bruegel.
Worse, China’s 15th Five-Year Plan, approved in March, suggests Beijing has little intention of slowing its industrial expansion.
“The mood in Brussels is that people want to get tougher [on China] and I think it's probably a good idea,” said Philippe Le Corre, a professor of geopolitics and Asian studies at Paris-based ESSEC Business School. “EU officials are becoming more aware that with China you need [both] carrot and stick.”
Analysts like Le Corre see a steady deterioration in good will between Brussels and Beijing. Last July, following a disappointing EU-China summit, Commission President Ursula von der Leyen said relations had reached an “inflection point.”
Gunnar Wiegand, a visiting distinguished fellow at the German Marshall Fund, said policymakers are gradually realizing that the rapport with China has evolved from a source of “endless opportunities for our companies” into a major threat of deindustrialization.
Last year, Germany lost around 124,100 industrial jobs, according to a study by consulting firm EY. At the same time, recent polls showed the far-right Alternative for Germany (AfD) party has become the leading political force in the Eastern state of Saxony-Anhalt, boosting its prospects of scoring its first electoral victory in September since the party’s founding in 2013.
“There’s a growing sense of panic,” admitted a diplomat from one of the countries that has called on Brussels to toughen its stance on China.
The pivot that wasn’t
Early last year, China watchers saw a window to reset years of strained relations. It seemed logical: Washington's aggressive trade moves had alienated both China and the European Union, while the EU itself had suddenly become Beijing’s primary market.
No such thawing materialized — quite the opposite.
After hitting a record low at the bilateral summit last July, relations between Brussels and Beijing were thrown into fresh turmoil when the bloc found itself a battered bystander in a broader power struggle between China and the U.S. over rare-earth restrictions.
To Europeans, the move reinforced the belief that China not only holds strategic dominance over key sectors but isn’t afraid of weaponizing it.
Since then, Brussels has intensified efforts to reduce its dependence on Beijing across critical supply chains. Earlier this year, when unveiling the Industrial Accelerator Act (IAA) — a proposal designed to boost European manufacturing — the EU introduced “Made in Europe” rules designed to squeeze Chinese components out of the bloc’s tech production.
In a similar vein, a Cybersecurity Act presented in January featured key provisions ruling out “high-risk" foreign technology suppliers from 18 critical sectors.
In a tit-for-tat escalation, China’s State Council in April instructed domestic companies not to comply with EU investigations or sanctions, banned exports to seven European defense contractors over arms sales to Taiwan, and threatened retaliation against both the EU’s IAA and Cybersecurity Act.
Building trade leverage
In theory, the EU already has plenty of trade instruments to counter China’s flooding of the bloc with heavily subsidized goods — from anti-subsidy investigations and foreign investment screenings to its Anti-Coercion Instrument (ACI), best known as the “trade bazooka.”
The problem, critics say, is that most of these instruments are used too sparingly and require months-long investigations before being deployed.
To change that, one of the chief requests of an informal French-led proposal, backed by Italy, Spain, the Netherlands and Lithuania, is to create a “broader, cross-sector trade defense tool” in order to “address situations where a significant market distortion on a specific sector is identified that no existing trade defense measure could prevent.”
Unlike the ACI — a sort of nuclear option requiring a qualified majority vote in the European Council and cumbersome investigations — the new tool would be triggered when “European supply sources are concentrated beyond a specific threshold,” suggesting it would specifically target China.
As expected, the proposal had Chinese firms bucking hard. The China Chamber of Commerce to the EU was quick to warn that an “escalation in trade barriers would likely translate into higher import costs for European industries and consumers,” and as such primarily harm the EU itself.
“Overextension of such tools could risk undermining the EU’s own competitiveness and its attractiveness as an open investment destination,” the CCCEU added, in a statement shared via email.
Making Beijing listen
Most experts agree that the EU will only be taken seriously in Beijing if it speaks with one voice.
“There is only one way of working with China — to appear as a unified country,” said Le Corre. China seems to be aware of the EU’s fragmentation, as it has been leveraging it by deliberately intensifying bilateral relations with EU member states at the expense of engaging with Brussels.
Countries like Spain and Hungary, under their previous administrations, have often sought to preserve close ties with China, wary that aligning with calls for a more confrontational approach could jeopardize their chances of attracting Chinese investment.
Laia Comerma, a fellow at the Centre for Security, Diplomacy and Strategy (CSDS) of the Vrije Universiteit Brussel (VUB), said “the EU has not realized the power that it has because it has been trapped in disagreements between member states.”
Where the next EU-China summit this year is held — and who attends — will offer an important signal of the state of relations between Brussels and Beijing, Comerma added, as details of the meeting remain scarce. Last year, European leaders traveled to China after Xi Jinping declined to come to Brussels.
What's already clear, however, is that the outcome of the EU’s contest with China will determine whether Europe remains at the table, or ends up on the proverbial menu, in the years ahead.
“We have to accept a very bad deal with the U.S. It should not become a habit that we are becoming the punching ground for the economic needs of our strongest trading partners,” Wiegand said.
Sign up to The Parliament's weekly newsletter
Every Friday our editorial team goes behind the headlines to offer insight and analysis on the key stories driving the EU agenda. Subscribe for free here.