A member of the People’s Armed Police stands guard in front of the European Union flag at the European Delegation in Beijing, China.
Kevin Frayer | Getty Images News | Getty Images
As the United States considers disengagement from China, Europe could soon find itself in a sweet spot.
US President Joe Biden has, for most of his term so far, taken a hard line on China, calling the world’s second-largest economy a the most serious competitor in America Diplomatic dialogue between the two hit a rough patch earlier this year when Washington accused Beijing of using a spy balloon for information on US military posts.
“The US policy stance towards China means that China needs to improve relations with Europe to mitigate the impact of export controls. Therefore, China has an incentive to work hard to improve relations with the EU”, Anna Rosenberg, head of geopolitics at the Amundi Institute. , he told CNBC via email.
European officials have taken a slightly different approach from the Biden administration, preferring to take a softer stance with Beijing, recognizing its importance to the European economy. Data from the European Statistical Office prove it China was the third largest buyer of European products during 2021.
“The EU is in a very different situation than the US, which is clearly pursuing political disengagement with China,” Jacob Kirkegaard, non-resident senior fellow at the Peterson Institute for International Economics, said by email.
“From China’s perspective, the EU is the most important revenue market to which it still has largely unrestricted access. This, in turn, makes it much less likely that China will actively seek to limit trade with the EU,” he said, adding China. “has a lot to lose from a trade war with the EU”.
The president of the European Commission, Ursula von der Leyen, has promoted, in recent months, a risk reduction policy from Beijing, reducing the country’s dependence on critical sectors such as raw materials and semiconductors. However, European officials are nowhere close to supporting a complete severing of economic and diplomatic ties.
“The political need to de-risk the EU-China relationship is completely different from the US-China relationship. In a world characterized by US-China rivalry, the EU is the most important economic partner for both, that gives him significant political benefits against Beijing and Washington,” Kirkegaard said.
The EU’s single market, where goods and services flow freely across borders, is home to 23 million businesses and more than 450 million consumers, according to data from the European Council.
“We don’t want to fuel the rivalry between the United States and China,” an EU official, who did not want to be named because of the sensitive nature of the situation, told CNBC. “We prefer to calm things down… without being naive,” said the same official.
US rhetoric towards China eased slightly after a meeting of G7 leaders over the weekend, with Biden warming to the concept of de-risking, rather than completely separating the two largest economies. greats of the world
Beijing would not have liked the idea of G7 leaders coming together to criticize China’s policies. Following the meeting, China imposed a ban on its companies buying from US chip maker Micron.
Alicia García-Herrero, a senior fellow at European think tank Bruegel, said Europe might not find itself in an easy position amid these tensions between the US and China.
“In fact, I highly doubt that will happen,” he said of the prospect of Washington and Beijing looking to Europe for their economic ties.
“China is taking a lot of retaliatory actions against Europe in a lot of ways and the feeling that Europe is becoming more and more dependent on China — that kind of strategic dependence on green energy is becoming more and more evident,” he said, noting that Beijing is aware of the influence it has. it remains as Europe seeks to develop a more sustainable economy. China is the largest supplier of several critical raw materials in the world, according to a study published by the European Commission, which are used in products such as electric vehicles.
