China and the EU-US rift + Economic security + Car imports from China
Linda_Heyer
Thu, 01/29/2026 - 11:50 picture alliance / ROPI | Michailidis/EUC Download (pdf - 3.37 MB) MERICS Briefs
MERICS Europe China 360° Jan 29, 2026 17 min read China and the EU-US rift + Economic security + Car imports from China ANALYSIS China sees EU-US rift as an opening for EU re-engagement – on its own terms Europe’s predicament from China’s perspective
Re-engagement and abandoning de-risking
Implications for the EU
Takeaways for the EUChina continues to interpret its relationship with the EU through the lens of the EU’s relationship with the US. It discounts that the EU makes its own assessment of this relationship, informed by structural and systemic differences.China underestimates the significance of the threat from Russia for Europe’s readiness to re-engage with China.Beijing is likely to see Europe as eager to revitalize bilateral relations and expect concessions. The EU should not expect major offers from China beyond symbolic or isolated gestures.It is paramount for the EU to ensure that the search for new investment avenues does not erode de-risking policies. Showing resolve and assertiveness can improve the EU’s bargaining power. In that context, China will take note of how Europe manages Greenland and other tensions with the US as a test of the EU’s commitment to assertiveness.chinanews.com.cn/gsztc/2026/01-15/10552398.shtml">The so-called "China shock" is actually a "future shock"Quote 2: Cui Hongjian at Sina News: China faces a diplomatic boom at the beginning of the year, why is the European leaders "diplomatic offensive" so fierceQuote 3: Zhang Jian at Guangming Daily: Europe: Finding the way forward in a difficult situationQuote 4: Tian Dewen at Europe Times: Will conflict break out between Europe and the United States over Greenland?Quote 5: Jian Junbo at Sina Finance: Macron "conditionally" welcomes Chinese investments UPDATE Commission gets bold on economic security Revamping existing tools: The Joint Communication proposes revamping existing tools and introducing new measures – from preventing “high-risk entities” from accessing EU funds to preempting foreign takeovers of critical tech startups and incentivizing the use of locally sourced supplies and components in critical sectors, like defense and energy. The proposals reflect a new kind of risk assessment with respect to economic and technological interdependencies – including with China.De-risking, Nexperia edition: One leitmotif is the urgency for Europe to reduce high-risk dependencies. This has been a long time coming, considering the hard lessons of a global pandemic and a war in Europe, but recent events have added urgency. For example, the halting of shipments from Dutch chipmaker Nexperia’s fabs in China to its European customers brought the global auto industry to its knees. The move came in response to the extraordinary measures taken by the Hague to stop Nexperia’s Chinese parent from hollowing out the company’s European production.Chinese tech risks in focus: While Beijing’s response has arguably been defensive, larger issues are at play. Nexperia’s saga highlights how Chinese companies’ investments abroad often intersect with state-driven industrial master plans. It also shows that China’s centrality in many technology supply chains, coupled with Beijing’s growing appetite to impose export controls, can create chokepoints. Aside from import dependencies, the Joint Communication implicitly references Chinese technology in the context of each of the high-risk areas it singles out. Governance of economic security: But to identify, assess, and respond to risks, the EU must collectively overcome information asymmetries. This is a weak link in the bloc’s economic security, which the Commission is looking to fix by improving the underlying evidence base, intelligence capabilities, and technical expertise. Tearing down the information walls between capitals, as well as between industry, science and government, is going to be crucial if Europe is to balance cooperation and competition with China’s techno-industrial system.
europa.eu/commission/presscorner/detail/en/ip_25_2889">A strategic approach to strengthen Europe’s economic securityEuropean Commission: Strengthening EU cybersecurity resilience and capabilitiesNRC: Nexperia in no-man’s-land: How a chip company became caught between two world powers EUROPE-CHINA DIPLOMATIC TRACKER European capitals intensify visits to Beijing French President Emmanuel Macron’s Beijing trip in December 3-5 centered on signaling a shared interest in global stability and multilateralism, along with calls to “re-balance” EU-China economic relations. France and China released four joint statements on different topics: global governance, Ukraine and Palestine, climate and environmental cooperation, and the peaceful use of nuclear energy. However, the visit has not featured major trade deals but instead has led to 12 undisclosed sectoral cooperation agreements.German Foreign Minister Johann Wadephul’s visit – postponed from November over diplomatic tensions – took place on December 8-9 and prepared the ground for Chancellor Friedrich Merz’s first China trip, expected in late February. Compared to Macron’s visit, the Wadephul’s visit more explicitly raised concerns about rare-earths, and Beijing in turn pushed Germany on respecting China’s position on Taiwan.UK Prime Minister Keir Starmer is visiting China on January 29-31 in an apparent bid to boost economic relations. In the week preceding the visit, close to 30 British companies – including HSBC and Swire Group –met with top Chinese officials. The visit is likely to be a diplomatic balancing act for Starmer who recently said he recognized the “national security threats” stemming from China while at the same time approving the opening of China’s “mega-Embassy” in London. The visit is further complicated by reports of alleged cyberespionage targeting the British Prime Ministers’ aides between 2021 and 2024 released hours before the visit started.
Speaking at Davos on January 20, Chinese Vice-Premier He Lifeng voiced support for economic globalization and multilateral economic governance –implicitly contrasting China’s “stability” with US disruptions. Further, in an apparent reaction to partners’ concerns, He argued that China “never deliberately pursued” a trade surplus and vowed a pivot toward domestic demand. He said this is at the “top of its economic agenda” and that Beijing aims to rapidly boost consumption. However, a similar speech by President Xi Jinping in 2017 in Davos, frequently referenced and echoed by He, brought little change. So, this messaging intended for a foreign audience should be taken with caution.Engagement between China and EU institutions has been comparatively low in recent weeks, except for a technical export-control dialogue channel for managing practical frictions around rare earths licensing. This points to a wider problem: The last EU–China summit showed little scope for a bilateral agenda, with Beijing limited willingness to substantively engage the EU on its concerns. This has raised doubts in Brussels about the effectiveness of such dialogue formats and shifted its focus to enforcement and defensive instruments.Beijing continues to send mixed signals. On the one hand it lowered immediate pressure on the politically sensitive agricultural sector, by concluding its anti-dumping investigation into EU pork with duties below provisional levels (ultimately 4.9-19.8 percent). On the other hand, it opened a new investigation into European dairy products (with provisional duties at 21.9-42.7 percent), sustaining leverage and uncertainty for EU exporters with the final decision expected in February. SOAPBOX MERICS DATA HIGHLIGHT EV and hybrid car imports to the EU from China The Soapbox-MERICS Data Highlight offers visualizations of EU-China economic relations. In this issue, MERICS Senior Associate Fellow Rafael Jimenez Buendía, author of the weekly China trade newsletter “Soapbox”, zooms in on the latest developments with regard to European tariffs on electric vehicles made in China. SHORT TAKES Reuters: EU plan to phase-out high-risk tech draws fire from China's HuaweiSCMP: EU moves to force Huawei out of networks, opening door to wider Chinese tech bans
Euronews: EU countries agree temporary €3 flat customs fee for small imported parcels
BBC: Chinese mega-embassy in London approved by government after debate over security risks
Reuters: China to fall out of Germany's top five export destinations for first time since 2010
Euractiv: Poland asks Commission to investigate TikTok over AI disinformation Author(s) Grzegorz Stec Head of Brussels Office/Senior Analyst Rebecca Arcesati Lead Analyst Author(s) Grzegorz Stec Head of Brussels Office/Senior Analyst Rebecca Arcesati Lead Analyst Download (pdf - 3.37 MB) Related content about EU-China Defeatist Europe is set for growing dependence on China without decisive action Comment Feb 13, 2026 EU-China relations in 2026, with Grzegorz Stec Podcast Feb 02, 2026 A pragmatic approach to EU-China cooperation on frontier AI governance (EPC) External publication Dec 17, 2025