As 2024 comes to a close, the relationship between the European Union (EU) and China stands at a crossroads. Once defined by pragmatic economic cooperation, their interactions are increasingly shaped by geopolitical tensions, strategic competition, and mutual scepticism, writes Colin Stevens.
Trade, technology, and global influence remain central themes, while accusations of industrial espionage, human rights concerns, and disputes over electric vehicles (EVs) have further strained ties.
Economic interdependence under strain
The EU and China remain significant trading partners, with bilateral trade exceeding €700 billion annually. European companies rely heavily on Chinese manufacturing, while China is a key market for European luxury goods, automobiles, and technology. However, 2024 saw trade tensions deepen, particularly in the burgeoning EV sector.
EV disputes and the quest for dominance
China’s dominance in the EV market has triggered alarms in Europe. Chinese EV manufacturers, supported by substantial government subsidies, have made aggressive inroads into the European market, offering affordable alternatives to local brands. The European Commission responded by launching an anti-subsidy investigation in September, accusing Beijing of distorting competition.
This move marked a turning point in trade relations. While the EU sought to protect its automotive industry, China denounced the investigation as protectionist, threatening retaliatory measures that could impact European companies operating in China. The dispute underscores the growing strategic rivalry in green technologies, with both sides vying for leadership in the transition to renewable energy.
Europe’s tightrope: Partner and rival
Europe faces a delicate balancing act in its relationship with China. On the one hand, China is a vital trading partner, offering a massive market for European goods and critical supply chains for manufacturing. On the other, Beijing’s assertive geopolitical posture and its perceived ambitions to reshape the global order have led to concerns over security, economic dependency, and strategic rivalry.
The pragmatic case for cooperation
China is the EU’s largest source of imports and its third-largest export destination. European industries, particularly in sectors like automotive, machinery, and pharmaceuticals, depend on Chinese consumers. Additionally, China’s role as the world’s leading manufacturer of renewable energy components, such as solar panels and EV batteries, makes it an essential partner in Europe’s transition to green energy.
The perceived threat
However, Europe increasingly views China as a systemic rival. The concerns are multifaceted:
- Economic leverage: China’s dominance in critical supply chains, including rare earth minerals and semiconductors, raises fears of overdependence.
- Geopolitical ambitions: Beijing’s growing influence through initiatives like the Belt and Road Initiative (BRI) and its partnership with Russia amid the Ukraine conflict challenge Europe’s strategic interests.
- Cybersecurity and espionage: Accusations of industrial espionage and cyberattacks targeting European industries have fueled mistrust.
- Human rights and governance: China’s policies in Xinjiang, Hong Kong, and Tibet conflict with Europe’s human rights values, straining diplomatic relations.
Spying accusations and security concerns
In 2024, allegations of industrial espionage and cyberattacks further eroded trust. European intelligence agencies accused Chinese operatives of targeting critical sectors, including energy, telecommunications, and defence. The discovery of alleged surveillance devices in European diplomatic missions led to a diplomatic row, with both sides exchanging accusations.
The EU’s heightened focus on cybersecurity and supply chain security has led to stricter scrutiny of Chinese technology providers, including Huawei and ZTE. Several member states have accelerated plans to phase out Chinese equipment from their 5G networks, citing national security risks. These measures reflect a broader European effort to reduce dependence on Chinese technology, aligning with U.S. pressure for greater transatlantic cooperation on security issues.
Realpolitik: The US-China-Europe triangle
Europe’s relationship with China cannot be understood in isolation; it is deeply influenced by the United States. Washington has intensified its calls for Europe to align with its tough stance on Beijing, particularly regarding technology, trade, and human rights. The U.S. has lobbied for restrictions on Chinese investments and closer coordination on supply chain security, pushing Europe to take a harder line.
However, Europe’s economic interests often diverge from Washington’s priorities. Many European leaders remain wary of fully antagonizing China, recognizing the risks of disrupting trade and inviting retaliatory measures. This balancing act—maintaining strong economic ties with China while addressing US security concerns—defines Europe’s realpolitik.
China’s growing stature as a world power
China’s global influence continues to grow, underscoring its role as both an indispensable partner and a formidable competitor. In 2024, Beijing positioned itself as a leader in global trade, green technology, and infrastructure development. The Belt and Road Initiative expanded into new regions, while Chinese diplomacy played a key role in mediating conflicts in the Middle East and Africa.
Beijing’s alignment with Moscow has heightened European concerns, particularly regarding its stance on Ukraine. By refusing to condemn Russia’s actions and deepening economic ties with Moscow, China has positioned itself as a counterweight to Western influence.
Cooperation amidst competition
Despite the tensions, the EU and China continue to cooperate on global challenges such as climate change and public health. In 2024, both parties reaffirmed their commitments to the Paris Agreement and pledged to collaborate on green finance initiatives. However, these areas of alignment are increasingly overshadowed by strategic competition.
Outlook for 2025: Pragmatism and possibility
As 2025 approaches, the EU-China relationship will remain defined by pragmatic engagement amid strategic divergence. Europe’s tightrope act—balancing the need for good trading relations with the reality of viewing China as a potential threat—will become even more precarious. Key developments to watch include:
- Further moves to diversify European supply chains and reduce reliance on Chinese imports.
- The outcome of the EU’s anti-subsidy investigation into Chinese EVs.
- Possible retaliatory measures by China against European companies operating within its borders.
Despite these challenges, there is room for optimism. The complexity of the EU-China relationship demands a thoughtful, measured approach, and wise heads on both sides recognize the necessity of meaningful coexistence. Cooperation on critical issues such as climate change, public health, and global stability offers a foundation for rebuilding trust and forging a more balanced partnership.
If Europe and China can navigate their differences with a shared commitment to global progress, the future may hold not just competition but also opportunities for collaboration that benefit both sides—and the world at large.
Author
Colin Stevens founded EU Reporter in 2008. He has more than 30 years of experience as a TV producer and journalist. He is a past president of the Press Club Brussels (2020-2022) and was awarded an Honorary Doctor of Letters at Zerah Business School (Malta and Luxembourg) for leadership in European journalism.
