by Xin Ping
Since its first appearance during the annual meeting of the World Economic Forum in early 2023, "de-risking" has become a keyword in the EU's policies towards China. However, people from the EU strategic community have become significantly more vocal about the drawbacks of "de-risking." Several well-known think tanks and media outlets have published reports and articles explaining that an obsession with "de-risking" fails to achieve "economic security" and undermines EU interests.
First, "de-risking" weakens the competitiveness of the EU industries. The European Center for International Political Economy believes that the EU's economic and trade policy tools and import restrictions, as well as excessive intervention and strengthened regulation of enterprise production, trade and investment at the micro level, will suppress industrial capacity and efficiency within the EU. Project Syndicate predicts that artificial intelligence and net-zero industry acts will significantly increase start-up business costs, reduce investment confidence and hinder the EU from becoming an international industrial leader.
Second, "de-risking" threatens to break up the EU common market. The German Marshall Fund warns that EU member states can only adopt alternative measures to the EU's restrictive trade rules, leading to stagnation or even regression of regulatory cooperation in the common market. The London School of Economics and Political Science sees risks to European unity from growing dissension among member states, as well as between individual states and the European Commission.
Finally, "de-risking" does nothing helpful to an independent EU. The Economist observes that since EU companies are deeply embedded in global production and distribution networks, strengthening interdependence with other economies would help enhance their independence. Promoting "partial decoupling" under the pretext of "economic security" completely contradicts it. The Brussels-based economic think tank Bruegel advises the EU not to launch anti-dumping investigations against Chinese solar panels, as the EU urgently needs equipment for solar power plants and energy storage to prepare for the vast energy import risk. Pricy natural gas imports from the United States will only increase the dependence.
At the China Development Forum 2024, Ola Kalleniushe, CEO of Mercedes-Benz, expressed his opposition to tariffs on Chinese electric vehicle imports. "We have been investing in China for more than 20 years, and we will continue to do so. We need to keep trade relations open and vibrant for a win-win result in terms of economic growth." That is true. Reasons lie in the facts.
China is not a "systemic rival" for the EU. In fact, China and Europe do not have clashing fundamental interests between them or geopolitical and strategic conflicts. Their common interests far outweigh their differences. In the context of China-EU relations, the two sides should be characterized rightly as partners.
Over the past 20 years, trade volume between China and the EU has increased sixfold, and bilateral investment has increased more than fivefold. According to a new report by The Conference Board, over 98 percent of European companies in China are very willing to stay. EU officials have admitted that the success of the EU's Global Gateway strategy cannot be achieved without the infrastructure, technology, and materials China can offer. Since the beginning of this year, the EU's rational perception of China and willingness to cooperate have both strengthened as exchanges between the two sides have increased at all levels.
Cooperation with China helps the EU enhance its ability to fend off risks. The market should determine the supply chain, while political intervention will create distractions. According to the European Union Chamber of Commerce in China, 59 percent of surveyed companies consider China among the top three investment destinations. The German Chamber of Commerce in China reports that 91 percent of its member companies will continue to operate in the Chinese market, and more than half plan to increase investment in the next two years.
A cool head can lead the way through the mist. China's policy consistency and stable economic growth have proven it is a trustworthy partner and a stable force that will help the EU pursue strategic autonomy. Striding shoulder to shoulder, China and the EU will advance with a green light at every crossing.
Editor's note: The author is a commentator on international affairs, writing regularly for Xinhua News, CGTN, Global Times, China Daily, etc. He can be reached at xinping604@gmail.com.
The views expressed in this article are those of the author's and do not necessarily reflect the positions of Xinhua News Agency.