Europe’s China Dilemma: Why the EU Still Cannot Decide What China Is

The European Union persistently characterises China as a partner, a competitor, and a systemic rival—often within the same policy frameworks. This ongoing conceptual ambiguity has resulted in a fragmented and inconsistent approach that fails to advance Europe’s core economic interests or respond adequately to the new geopolitical landscape.

Strategic Drift and the Crisis of European Statecraft

Recent sanctions, anti-subsidy investigations, and economic security measures are routinely framed as efforts to bolster European competitiveness and bargaining power. However, there is inadequate evidence that these initiatives address the underlying structural weaknesses eroding Europe’s economic and geopolitical standing. Instead, they often serve as rhetorical gestures, masking the EU’s ongoing inability to articulate a unified and effective foreign policy towards China.

Europe’s challenges are fundamentally domestic. Industrial decline, sluggish productivity, high-energy costs, demographic stagnation, technological dependence in critical sectors, and fragmented capital markets are deep-rooted issues that sanctions or trade restrictions cannot remedy. By resorting to these external measures, the EU risks fostering the illusion of a determined strategy while evading the urgent and uncomfortable debates about its own economic and industrial vulnerabilities. This reluctance to confront internal shortcomings further exposes the lack of coherence in Europe’s policy towards China.

A growing divergence is also emerging between Brussels and significant sectors of European industry. Many European firms continue to regard China as an indispensable market, production hub, and source of technological collaboration. German automotive manufacturers, luxury brands, chemical producers, and numerous medium-sized enterprises remain deeply invested in the Chinese market. While Brussels increasingly frames China through the lens of economic security and geopolitical competition, many European firms continue to view engagement with and investment in China as a commercial necessity and a matter of survival.

This mismatch highlights a deeper governance deficit within the EU. European institutions frequently craft policy based on shifting geopolitical narratives, while economic actors remain rooted in business realities. The resulting fragmentation leaves political objectives and economic interests constantly misaligned. This growing disconnect not only undermines the credibility of European foreign policy but also raises fundamental questions about whether Brussels genuinely represents the diverse priorities of its member states and economic stakeholders. The inability to reconcile these differences is emblematic of the EU’s failing efforts to forge a coherent China strategy.

The Contradictions of the “Partner, Competitor, and Systemic Rival” Framework

A critical impediment to a coherent China policy lies in the EU’s insistence on labelling China........

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