EU Takes Steps to Safeguard Economic Assets amid Changing Relations with China
The European Union (EU) is implementing measures to safeguard sensitive economic assets and protect them from geopolitical rivals. These initiatives aim to reduce security risks arising from trade and investment, with a particular focus on China. The plan, which includes stricter screening of foreign investments, tighter controls on exports, and restrictions on participation in key technology research, comes at a time of profound geopolitical turmoil and rapid technological shifts.
The EU Trade Commissioner, Valdis Dombrovskis, stated that the proposed rules are necessary because of the challenges posed by geopolitical tensions and technological advancements. While the plan does not name any specific country, it is evident that the EU is seeking to de-risk its economic relations with China, which is its most significant trading partner.
The draft text of the plan, which aims to address risks to EU economic security while maintaining an attractive business and investment destination, emphasizes the need for more coordinated action at the EU level. However, critics contend that enforcement may be challenging given that each member state retains control over its foreign policy.
The EU’s proposed measures include enhanced screening of foreign direct investment (FDI) and improved coordination on controlling the export of critical technologies. In October, the EU identified four key technologies—advanced semiconductors, artificial intelligence, quantum computing, and biotechnology—as high-risk sectors if they were to fall into the wrong hands.
Additionally, the EU plans to implement measures for export controls on dual-use technologies, which have both civilian and military applications. The EU executive initiated a debate on the bloc’s security in June, highlighting various new risks arising from the COVID-19 pandemic, Russia’s invasion of Ukraine, cyber and infrastructure attacks, and heightened geopolitical tensions.
The European Commission’s proposals will now be assessed by EU member states and the European Parliament. It is important for the EU to strike a balance between safeguarding its economic assets and maintaining open business and investment activities. These proposed measures are part of the EU’s efforts to navigate the evolving landscape of international relations and protect its economic interests in an increasingly complex geopolitical environment.
In conclusion, the EU is taking concrete steps to protect its sensitive economic assets and reduce security risks stemming from international trade and investment. By focusing on tighter controls and regulations, particularly in relation to China, the EU aims to ensure the security of its critical technologies and key infrastructure. The proposed measures will require further evaluation and cooperation among member states and the European Parliament to strike a balance between security and economic openness.
