Build rules, not rivalries in China-EU ties

The framing of an impending "China Shock 2.0" reflects a contested and increasingly politicized narrative rather than an objective analytical reality. Against this backdrop, China-EU economic relations are entering a delicate, decisive phase of rebalancing. This new wave of Chinese high-tech exports has triggered systemic anxieties over European deindustrialization, and the European Commission has responded by building an aggressive industrial firewall. However, the bloc is engaged in an intense internal debate: where some member states demand sweeping protectionist walls, industrial leaders warn that such heavy-handed barriers will backfire — stifling European competitiveness and derailing the green transition. This friction creates a vital, fleeting window to replace reactionary rivalries with a predictable framework for engagement. While clear, stable rules will unlock shared momentum for economic growth and innovation, excessive securitization will only guarantee that both sides pay a much higher price for future cooperation.

As the world's second — and third-largest economies, China and the EU together account for roughly one-third of global nominal GDP and 30 percent of global trade. They are indispensable partners. China is a major supplier of industrial raw materials and intermediate goods to Europe, while the two sides have strong complementarity in the service trade. In 2025, the EU recorded a surplus of approximately €21.3 billion ($24.53 billion) in service trade with China. Strengthening predictability in this relationship is therefore vital not only for the two economies but also for the resilience of global value chains.

Over two decades, China-EU ties have evolved beyond simple commodity exchange to deep industrial integration. In sectors such as automotive, machinery and chemicals, European companies continue to expand their "In China, For China" strategies, benefiting from China's sophisticated supply chains and innovation momentum.