Building resilience: The need for a geopolitical European Commission and strong leadership from Member States

The EU and European capitals need to find a new political drive that will carry Brussels and 27 member states in further building their resilience towards China, say Abigaël Vasselier and Grzegorz Stec.

The EU has made progress on building resilience towards China being driven by three factors: China’s more assertive trajectory, external crises, and political leadership in Europe. Consequently, that progress has been uneven and reactive in nature. 

But as the EU with its new Commission is set to move to hammering out the practicalities of economic resilience agenda and to addressing more contentious aspects of political and societal resilience, it cannot any longer rely on crisis-induced political momentum to take ambitious and rapid actions. The EU and European capitals need to find a new political drive that will carry Brussels and 27 member states in further building their resilience towards China. 

Resilience building cannot wait for crises 

This is not an easy task as momentum for leadership on the topic is waning among the capitals. Indeed, European capitals appear to be losing the sense of urgency to build resilience towards China. Memory of the Covid crisis and Beijing’s ‘soft’ mask diplomacy is fading; China’s support for Russia’s war in Ukraine appears to be becoming one of the disagreement points between the EU and China rather than a relationship breaker;  and China’s economic coercion towards Lithuania and tough-talking wolf-warrior diplomacy gave way to diplomatic outreach and race for Chinese EV investments. Only the US elections are creating a sense of urgency in preparing for all scenarios, including changes in the transatlantic space on China.

Even if the broader EU-China cooperation agenda remains largely empty, Europe keeps the door open to cooperate with China on global challenges and maintain channels of communication open. At the same time, the European capitals show shaky resolve to stick with more assertive measures coming from Brussels as shown by the EU’s process of introducing tariffs on Chinese EVs.

A new crisis could turn that tide, but the EU’s resilience policymaking process should not be as dependent on circumstances outside of the EU’s control and rather stem from own strategic assessments.

The way ahead in a difficult political landscape 

Fundamentally more effective action and more leadership from member states is key for the EU to fill the de-risking concept with content. Major legislation or breakthroughs on resilience-building on China require not only European capitals to support but also to lead on the subsequent efforts, enabling the Commission to pursue a more ambitious agenda. For instance, the foreign direct investment (FDI) screening mechanism began with a joint Franco-German-Italian proposal in 2016. Similarly, some member states are pushing for updated EU export control mechanisms. 

However, political momentum on de-risking and resilience building will likely become harder to achieve. Today, leadership from EU capitals on China policy may be harder to find. Germany and France that have usually weighed in on European China agenda seem to be internally divided on China or occupied by power reshuffle following elections. The Franco-German tandem has lost its momentum and damaged its credibility on China policy with other member states through pushback on resilience measures like EV tariffs or failing to coordinate with a larger number of countries. The German government appears internally divided on China policy, while the French parliamentary elections in July have damaged President Emmanual Macron’s standing and will compel a greater focus on juggling a minority government.

Other capitals seem reluctant or unable to take on the burden of pushing China agenda further. Especially, as working out the practicalities of the economic security agenda that still need to be addressed and broadening the discussion on resilience towards China, which will be more difficult than building the loose support for a flexible “de-risking” concept. Warsaw remains reluctant to take publicly visible actions on China-resilience building and Rome lacks a clear China strategy.

Sweden and Baltic countries stand out for their good resilience measures

Some member states stand out for their specific resilience measures and so could lead on that area; for instance, Sweden on investing in national China capacity with experience of its National China Centre, Baltic countries including Lithuania on democratic resilience with their efforts to counter foreign information manipulation, the Czech Republic on FDI screening mechanism, which stands out in its notification thresholds and scope, and The Netherlands on export controls and exceptional knowledge security structure with the National Contact Point for Knowledge Security. Encouraging ad-hoc coalitions of member states and like-minded partners on specific resilience policies could create political momentum and the necessary leadership.

Such push from the member states would need to be paired with strong leadership from a Commission capable of incentivizing member states to conduct risk assessments and generating a common understanding of China-related risks. In the process, the Commission should collaborate with the new European Parliament that ideally will provide a linkage with the national legislatures to create political pressure on national level. At national level, cross-party consensus will be vital for effectiveness, continuity and coherence.

The upcoming update to the Economic Security Strategy to close existing loopholes in national foreign investment screening mechanisms and amend differences in approach to export controls can offer a good testing ground for the new political momentum building model.

Member states need to gear up

But convincing member states to invest in resilience towards China is not easy. The national governments need to keep in mind position of citizens and business hurt by inflation to pay a “security premium” for long-term resilience measures. 

Costly measures have never been popular, so make sure they are politically viable will need nuanced public debate on the risks of neglect – something that first requires China literacy among political parties and experts capable of providing it. 

But that is a worthy investment. Preventive resilience  is ultimately less costly but requires decisive political leadership.  Crisis-induced urgency often fails to create lasting policies and makes for reactive policymaking with a high price tag.

Three steps to enhancing resilience

To navigate the balance between the need for enhanced resilience and cost-aversion in the current political landscape effectively, the member states can begin with the following three steps: 

1. conduct a thorough national risk assessment – e.g. as part of featuring China more robustly during updating national security strategies -to identify most pressing China-related vulnerabilities and develop a shared understanding of the challenges across the administration through internal papers and more robust coverage of China in national security strategies than at present; 
2. implement any still pending EU level recommendations into national policy practice for instance on 5G or on export control; 
3. build China competence by increasing research capacity and China literacy within government bodies through dedicated funding and training programs with the UK’s FCDO’s initiatives serving as potential point of reference. 

Building on those most pressing steps the capitals could move to more long-term priorities with implications on European level: 

1. developing a China strategy to help coordinate national and subnational-level engagements with China and to communicate the key interests of the member state to its partners;
2. using the national strategies and risk assessments as the starting points for EU level resilience-building proposals that the member states can champion together with the Commission;
3. facilitate a “China resilience-building” best practice dialogue within the relevant Council working group to ensure a flow of knowledge between the member states that can also serve as a starting point for building coalitions on more ambitious EU legislations in that space. 

These steps could help to develop clearer, more decisive European policy and better coordination with non-European partners.  

You were reading an analysis from the MERICS Europe China Resilience Audit. For detailed country profiles, in-depth reports and further analyses, visit the project's landing page.

This MERICS analysis is part of the project “Dealing with a Resurgent China” (DWARC) which has received funding from the European Union’s Horizon Europe research and innovation programme under grant agreement number 101061700.

Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union. Neither the European Union nor the granting authority can be held responsible for them.