European Commission Finally Met on China

Dear reader,

Europe’s China debate is no longer only about how to trade with Beijing, but about how to defend Europe’s industrial base while reducing strategic vulnerabilities. In 2025, the EU imported €559.4 billion worth of goods from China, while exporting only €199.6 billion, leaving a trade deficit of almost €360 billion. Compared with 2024, EU exports to China fell by 6.5 percent, while imports from China rose by 6.4 percent. When looking at 2015, exports increased by 37.1% from €145.6 billion and imports by 89.0% from €295.9 billion.

For CEE, this is far from an abstract Brussels debate: the region is deeply embedded in European manufacturing networks, especially those linked to Germany’s automotive, machinery, and industrial base. If Europe faces a China shock 2.0, its consequences will be felt not only in Western Europe’s boardrooms, but also in factories, supplier networks, and regional economies across CEE.

The security dimension makes this debate even more urgent. China’s industrial power does not only put pressure on Europe’s manufacturing base through subsidized exports and overcapacity. It also helps sustain Russia’s wartime economy by supplying machinery, electronics, and dual-use goods that Moscow can no longer easily obtain from the West. China’s support determines how long Russia can sustain its war against Ukraine. For Europe, the implication is clear: China’s manufacturing dominance is no longer a question of competitiveness alone. It has become a part of Europe’s strategic environment.

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

CHOICE Quick Takes

The Commission finally met on May 29 to discuss China’s economic challenge. China’s manufacturing dominance could have severe consequences for the EU’s industrial base. Yet Chinese manufacturing also affects European security through its role in the supply chains of Russia’s war machine. We asked two experts to reflect on the industrial connections between China and Russia and their relation to Xi Jinping’s “high-quality development.”

Sense Hofstede, AMO China Team Brussels Office Head

Taiwan Shows Challenge of Escaping Chinese Dependencies

China’s technological rise poses a dual threat to Europe: economic and strategic. Though export controls have blocked China’s access to cutting-edge EUV lithography equipment, Chinese chipmakers are already exploiting older-generation DUV machinery to close the gap faster. More immediately, China’s dominance in mature-node semiconductor manufacturing has made it an indispensable supplier to European industry. The same supply chains that serve European factories also feed Russia’s war machine – through deliberate circumvention and dual-use ambiguity.

This is not incidental: Xi’s ‘high-quality development’ strategy is a calculated effort to render Chinese manufacturing irreplaceable, and to weaponize that dependency when geopolitical pressure demands it. Russia’s war economy starkly illustrates how fusion between civilian supply chains and military ends operates in practice. So does Taiwan’s situation. Even the world’s most advanced semiconductor manufacturer cannot fully eliminate strategic exposure to Beijing’s reach. Dependencies, once embedded, are extraordinarily difficult to unwind.

Europe is beginning to respond. The EU’s proposed Cybersecurity Act revisions extend supply chain risk assessments beyond telecoms. Yet binding obligations remain concentrated on mobile and fixed networks, leaving connected vehicles, solar technology, and port infrastructure without equivalent requirements. Only comprehensive oversight across all critical infrastructure can ensure that Europe’s openness does not become a vector for undermining its own security in the light of China’s civil-military fusion.

Same Chinese Supply Chain Powers EU’s Green Transition and Russia’s War Effort

The Commission’s China discussion has become harder to separate from the task of developing Europe’s own industrial policy. The EU has lost roughly two million manufacturing jobs since 2019 in what a French planning body recently called a “steamroller” flattening Europe’s industrial capacity. Some of the sharpest declines are concentrated in Germany and parts of Central and Eastern Europe. The concern in Brussels is not only economic, but political, as industrial decline tends to deepen regional inequality and fuel political fragmentation.

The China-Russia dimension adds another layer. After reaching a record US$245 billion in 2024, bilateral trade fell modestly in 2025, but the structure of the relationship changed little: Russia continued exporting discounted energy and raw materials to China, while China exported electronics, industrial equipment and machine tools to Russia. According to recent MERICS reporting, Chinese exports of dual-use goods also remained above pre-war levels despite tighter sanctions enforcement.

This leaves Europe facing an uncomfortable duality. Chinese exports such as batteries, solar panels, and critical minerals are essential to the EU’s green transition, yet they also intensify pressure on Europe’s own industrial base. At the same time, parts of this same industrial ecosystem continue supporting Russia’s wartime economy, making Europe’s trade-offs even harder to manage. In sum, the Commission certainly has a challenging task ahead.

CHOICE in Brussels

The Commission Debates EU-China Relations

On May 29, the College of Commissioners held an orientation debate on EU-China relations to discuss both the opportunities and challenges the relationship presents. The Commission reaffirmed its de-risking-not-decoupling line, calling China a critical partner but stating plainly that the current trade and investment relationship is “not sustainable” and that it requires a more robust and coherent response as Europe’s economic and security interests increasingly intertwine. Reportedly, Commissioners also weighed tools such as supply-chain diversification rules and new trade mechanisms to curb Chinese access to the EU’s chemicals, metals, and clean tech sectors – all feeding into the G7 and European Council summits planned for June. 

The Commission’s hawkish turn – embodied by President von der Leyen and Industry Commissioner Stéphane Séjourné, who calls for applying the EU safeguards “more systematically” at the sectoral level rather than targeting particular businesses or materials – is already meeting mixed reactions ahead of the June Council. The decisive variable remains Germany. Berlin’s position is notoriously conflicted: its largest industrial champions are deeply exposed to the Chinese market, leaving the country caught between defending Europe’s competitiveness and protecting the interests of its own companies. Because Germany’s stance effectively sets the ceiling for what the EU as a whole can adopt – and because other European economies, such as Poland’s, are so tightly woven into German industrial supply chains – whatever Berlin decides will impact wider Europe. And although Chancellor Merz’s February trip to China struck a conciliatory bilateral tone, Berlin’s posture at the EU level seems to be evolving. A German government official told POLITICO that the country is now “open to discussing” stronger trade defenses, including a measure to address Chinese overcapacity. The open question therefore seems no longer whether Germany engages, but to what extent – and what kind of consensus is feasible at the EU level.

WiCH Highlights

Ágnes Szunomár, WiCH Co-Chair for Hungary, spoke to the New York Times about Hungary-China relations. Read it here! 

Sari Arho Havrén, WiCH Co-Chair for Finland, wrote a commentary about purges inside China’s army. Read it here!

Francesca Ghiretti, WiCH Co-Chair for Italy, published her research on chemicals as Europe’s neglected economic security frontier. Read it here!

CHOICE News

 Ivana Karásková presented Europe’s reactions to the Xi-Trump summit at a closed-door event organized by a CHOICE partner, the Atlantic Council. She also spoke at a roundtable on China-Russia cooperation held in the Czech Parliament in cooperation with MP Helena Langšádlová.

  Sense Hofstede presented on Chinese resilience at a closed-door event at Bruegel and commented for Domino Theory on Dutch-China relations (read it here). 

  Paulína Ovečková wrote an article on how the China shock is disrupting both developing and advanced economies for The Diplomat (read it here). She was also interviewed by the Czech Radio and TV Nova about the Trump-Xi summit (listen here and watch here).

  Paulína Ovečková and Emma Belmonte spoke to Le Monde about the recent trend of Chinamaxxing (read it here).

 Konrad Szatters was interviewed by Onet about the broader Europe-China relations (read it here).

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