Von der Leyen’s ‘de-risking’ is a tougher stance on China

Ursula von der Leyen, president of the European Commission, launched a landmark reality check on worsening relations with China on Thursday, in a speech that revealed Brussels’ toughening stance towards Europe’s biggest trade partner for goods and its axis with Russia.

“Very clearly, she took a much more realistic line on China than other European state leaders do in public,” says Mikko Huotari, executive director at Merics, a Berlin-based think-tank which focuses on China.

“But in a sense what she is doing is making public what the internal assessment on China is in several European capitals.”

The selection of Merics as the joint host for the speech underlined her tougher message. Merics was among four European organisations and 10 individuals targeted by Chinese sanctions in 2021, in protest against the EU’s sanctions on four Chinese officials for their alleged role in carrying out human rights abuses in Xinjiang.

Von der Leyen lost no time in criticising both Beijing’s support for Moscow, and Xi Jinping, China’s leader, personally. “Far from being put off by the atrocious and illegal invasion of Ukraine, President Xi is maintaining his ‘no-limits’ friendship with [Russian president Vladimir] Putin,” she said at the start of her address.

Von der Leyen is due to travel to China next week with French president Emmanuel Macron. She called for the “de-risking” of the EU’s relationship with China, marking at least a rhetorical difference with the US’s policy of “decoupling” in trade with China, in mainly high-technology areas.

The EU’s “de-risking” means the establishment of restrictions on trade in highly sensitive technologies where military use cannot be excluded or where there are human rights implications. The commission was also looking into the creation of a mechanism for scrutinising overseas investment by EU companies in a small number of sensitive technologies that could enhance the military capabilities of rivals, von der Leyen added.

The commission president also said that the EU would need to “reassess” the Comprehensive Agreement on Investment with China, a trade deal that was not ratified and has stalled since 2021. “We have to recognise that the world and China have changed in the last three years, and we need to reassess CAI in light of our wider China strategy,” she said.

Noah Barkin, a senior adviser with the Rhodium Group consultancy, sees von der Leyen’s speech as a “major inflection point in how Europe defines the challenges presented by China”.

“She has set the terms of the debate, with two important messages,” Barkin says. “The first is that Europe must adopt a clear-eyed view of China based on what it says and does, not based on what Europe hopes it will be.

“Second, she is putting the focus firmly on economic security, after several years in which EU policy towards China has been drifting and lacking new ideas,” he adds. “In using the de-risking framing and rejecting the idea of decoupling, von der Leyen is defining EU strategy towards China as distinct from that of the US, while embracing important elements of the US approach.”

Theresa Fallon, director of the Centre for Russia Europe Asia Studies, a think-tank in Brussels, says that the speech indicated a shift that has taken place in EU thinking on China since it designated ties with China in 2019 as those with a “partner for co-operation and negotiation, an economic competitor and a systemic rival”.

“The biggest basket now is that of systemic rival. The other two baskets have shrunk in size,” Fallon says.