DW: EU leaders agree to cut reliance on China
EU leaders at the Brussels summit also called on China to press Russia to end the conflict in Ukraine. But they failed to agree on a plan to distribute migrants in the bloc, after it was blocked by Poland and Hungary.
European Union leaders pledged to reduce their economic dependence on China, as they concluded a two-day summit in Brussels on Friday.
The bloc's leaders vowed to pursue a mutually beneficial economic relationship with Beijing that would "continue to reduce critical dependencies and vulnerabilities," they said in a joint statement.
"We must prevent strategic dependencies. It will take a few years for companies to diversify, but it will remain an economic cooperation which is also necessary in terms of climate policies and food security," German Chancellor Olaf Scholz said.
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Update #1: EU softens China strategy by adopting ‘de-risking’ approach (The Guardian)
Update #2: EU leaders agree to 'de-risk' the bloc's trade dealings with China (SCMP)
WNU Editor: Not everyone is onboard. Hungary's foreign minister Péter Szijjártó says that efforts by Europe to decouple or derisk from China would be an act of economic suicide (see video below).
As to what is my take.
The EU's economic/business model was based on obtaining cheap and relaible energy imports from Russia that in turn help make European products competitve in global markets and inflation in control. That model no longer exists, and targeting countries like China is not going to solve the economic problems that Europe is facing.
The EU decoupling from China is a complex and challenging issue. There are strong economic and political arguments for and against decoupling, and there is no easy solution. However, there are a number of steps that the EU could take to decouple from China more successfully.
ReplyDelete**1. ** Increase investment in domestic industries. The EU could increase investment in domestic industries that are currently reliant on Chinese imports. This would help to reduce the EU's dependence on China and make it more resilient to future disruptions.
**2. ** Diversify trade partners. The EU could diversify its trade partners by increasing trade with other countries, such as India, Brazil, and Africa. This would help to reduce the EU's reliance on China and make it less vulnerable to Chinese economic coercion.
**3. ** Strengthen its intellectual property rights (IPR) regime. The EU could strengthen its IPR regime to protect European companies from Chinese IP theft. This would make it more difficult for Chinese companies to benefit from European innovation without paying for it.
**4. ** Work with other countries to counter China's economic coercion. The EU could work with other countries, such as the United States and Japan, to counter China's economic coercion. This would help to deter China from using its economic power to bully other countries.
**5. ** Promote a rules-based international order. The EU could promote a rules-based international order that would help to level the playing field for European companies. This would make it more difficult for China to engage in unfair trade practices.
It is important to note that decoupling from China would not be easy or painless. The EU would likely face economic costs in the short term. However, in the long term, decoupling could help to strengthen the EU's economy and make it more resilient to future disruptions.
The EU would also need to carefully consider the political implications of decoupling from China. China is a major economic and political power, and decoupling could damage relations between the EU and China. However, the EU may need to be willing to take some risks in order to protect its long-term interests.
Ultimately, the decision of whether or not to decouple from China is a complex one that the EU will need to make carefully. There are strong arguments on both sides of the issue, and the EU will need to weigh the costs and benefits carefully before making a decision.