CHOICE Newsletter: How Powerful is China’s Coercion Toolkit in Europe?

Dear reader,

October is shaping up to be an important month for EU-China relations, with trade, economic security, and Europe’s dependencies again high on the agenda. In this month’s newsletter, we look at China’s economic coercion toolkit and what Europe should watch in the weeks ahead. It also comes shortly after we launched our own audit of China policies across 19 countries in Central and Eastern Europe – an attempt to capture how different governments across the region are responding to many of these same challenges.

But CHOICE has never been only about commenting on policies and producing research. We increasingly want to invest in the community that makes good research possible – because expert networks are hardly sustainable without taking care of the people behind them. This is why we brought together co-chairs of our sister-project the Women Insight on China (WiCH) for our first strategic retreat in the Czech Republic. Over two working days, we planned our next gender audit (the last year’s report is available here), expert database and mentoring program, and discussed how WiCH should grow while preserving the trust and commitment behind it.

There is plenty more happening across CHOICE this autumn – and plenty to read below.

Enjoy the read!

Ivana Karásková, CHOICE Founder and Team Lead (based in Prague)

CHOICE Quick Takes

Whatever direction related to China the EU leaders endorse later this month, Beijing is widely expected to escalate its ongoing economic coercion vis-à-vis Brussels. What kind of “countermeasures” can the EU expect? How effective is China’s coercion? Do past lessons hold for the future? We have asked our experts to discuss what Europe needs to watch out for in the coming weeks.

Sense Hofstede, AMO China Team Brussels Office Head

The Derisking Trap?

Europe’s green transition creates a paradox for economic security, as dependence on China may expose it to coercion. Particularly in cases involving trade restrictions and critical supply chains, Chinese coercion has often proved less effective at extracting political concessions than its economic weight would suggest. Yet the more important question may be whether the threat of disruption changes European behavior before coercion is even applied.

Central and Eastern Europe illustrates this dilemma particularly well. The region is becoming a major hub for EV and battery production, involving European, South Korean, and increasingly Chinese firms. Localizing production, however, does not necessarily mean de-risking: factories inside the EU may still rely on Chinese raw materials, components, technologies, or supply chains. Disrupting these flows could therefore hurt European automotive value chains and ultimately the EU’s green-transition targets.

This is where Tobias Gehrke’s concept of “anti-de-risking” becomes relevant. Through export controls and other supply-chain restrictions, China can raise the costs of diversification precisely when Europe tries to reduce its vulnerabilities. Direct coercion may fail to force political concessions, while anti-de-risking succeeds indirectly by making European policymakers more cautious.

The EU may therefore need to look beyond trying to hold back changes that are difficult to reverse. The more important question is which technologies and innovations can sustain Europe’s role in the next phase of industrial transformation.

Two Scenarios for Rare Earths

Not one, but two former Australian prime ministers argue China overplayed its hand with rare earth export controls. Easy to say from Australia – a continent holding 35 of the 50 minerals on the US critical minerals list. Many European analysts disagree, and argue that investment commitments are not the same as stockpiles.

Beijing knows coercion erodes leverage by pushing others to diversify, so it is unlikely to squeeze hard. But European companies remain surprisingly laid back: only one in ten is preparing for a Taiwan contingency, and supply chains that look diversified often trace back to a single country or supplier. What if the EU-China dialogue does not deliver in October?

The first scenario is tit-for-tat. When the EU sanctioned 14 Chinese companies for helping Russia circumvent export bans, Beijing blacklisted 14 European entities – a calibrated political signal. The second is escalation against a politically sensitive sector: in Europe, it is usually cars. Nexperia’s case showed that no other sector gets a reaction from the European governments faster.

A full-blown trade war remains unlikely. With the US market less reliable, the EU is an export destination China does not want to lose. But Beijing could also do nothing. The suspension of China’s 2025 rare earth controls expires on November 10, and simply letting it lapse would still hurt.

CHOICE in Brussels

The EU’s China Deadline

October will be an important month for EU-China relations. The Commission has given Beijing until then to deliver “concrete results” on its €1 billion-a-day trade surplus with the bloc or face “harsher measures,” and the EU Trade Commissioner Maroš Šefčovič will travel to Beijing on October 8-9 to secure China’s commitments in that regard. On top of that, Germany reportedly aims to adopt its own “far-reaching” economic-security measures to shield its industries from China, aiming for cabinet approval on October 14 – just a day before the European Council meeting in Brussels. All this follows Xi Jinping’s state visit to Washington, where the US-China trade and rare earths truce was extended by only two months, to January 10.

For the EU – caught between the US and China, and dependent on a truce it did not necessarily negotiate – the question is whether it will back its ‘ultimatum’ vis-à-vis China with tangible actions. And the answer to this lies not merely in Brussels, but predominantly in the EU’s largest member states. Germany and France now agree on the diagnosis, but not on all the remedies. Berlin wants the EU’s planned “Made in Europe” rules opened to trade partners outside the bloc, while France prefers to reserve public contracts for European-made goods only. CEE’s stakes are growing as well. Poland runs one of the highest trade deficits with China among all EU member states, importing 18 times more than it exported in 2025; and Czechia’s imports from China were roughly 13 times higher than its exports. The cost of inaction is rising in capitals across the EU, both on its western and eastern flanks. October will therefore test not only Beijing’s willingness – or lack thereof – to deliver, but predominantly the member states’ readiness to act together. Such readiness is clearly long overdue, but still not entirely certain.

WiCH Highlights

Katja Drinhausen, WiCH Co-Chair for Germany, co-authored a report on China’s pursuit of dominance in industry, trade and technology. Read it here!

Nataliya Butyrska, WiCH Co-Chair for Ukraine, wrote an article on where Ukraine and India could find space for cooperation. Read it here! 

 Ágnes Szunomár, WiCH Co-Chair for Hungary, wrote an academic article on the nature of Chinese EV battery investments in Hungary. Read it here!

CHOICE News

 Ivana Karásková commented on CEE countries’ diverging China policies for Table Briefings (read it here).

 Sense Hofstede wrote an article on the Nexperia case for The Diplomat (read it here), commented about China’s approach to AI regulation and its views of Anthropic and OpenAI for Het Financieele Dagblad (read it here) and about the Trump-Xi summit and Europe’s position for Pravda (read it here).

  Paulína Ovečková was interviewed by Radiožurnál about the Trump-Xi summit for the podcast Interview Plus (listen here) and by Český rozhlas (listen here).

  Konrad Szatters was interviewed by Nikkei Asia about Taiwanese investments in Poland (read it here), and wrote articles on Chinese FIMI in Europe (read it here) and EU-China affairs (read it here) for the Polish Robert Schuman Foundation.

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