Policy paper 282

China and the role of Europe in a new world order

| 10/10/2022

Recommanded citation:
Lamy P., Fabry E. & Redeker N. 2022. “China and the role of Europe in a new world order“, Policy paper, Paris: Jacques Delors Institute, 10th Octobre.


Introduction

The EU-China relationship has deteriorated significantly. Given the likely direction of travel of China and of the world, it needs rebalancing in various directions in order to strengthen the EU’s position while engaging China where cooperation seems both necessary and possible and avoiding its isolation. This will imply releveling the economic playing field, reducing critical EU dependencies, increasing its resilience and its strategic autonomy, augmenting its global clout, and building cooperation with China in topics or regions where our interests converge.

The Russian invasion of Ukraine marks a new low point in EU-China relations. The fact that the Chinese government has shared the anti-western narrative of the Russian aggressor has accentuated many of the long-standing economic and political tensions between the two blocs. It has forged a new sense of unity amongst Member States vis-à-vis China, prompted a number of member states to rethink their economic dependencies on the authoritarian state and led Brussels to stress the systemic rivalry between the EU and China in even starker terms than before.

While it is now obvious that the diplomatic relations will remain on a downward spiral for the foreseeable future, it is much less clear how this new reality should translate into policy. With the remaining economic interdependencies and the need to cooperate with China as a world power on several issues from climate policy to health or food security, the EU will need to find new ways to juggle conflicting economic and political goals. France and Germany should, therefore, take the lead in formulating this new approach.

Most importantly, the two countries should push the EU to continue to level the playing field towards Chinese competitors, reduce its dependence in strategic sectors through trade policy but also through a politically and macroeconomically meaningful European industrial strategy. Moreover, the EU should leverage the geopolitical clout of its standard-setting powers and carve out a realistic agenda for an arm’s length cooperation in those areas in which the two blocs still pursue common interests.

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