EU-China relations: European firms are reluctant to speak up on China as Brussels seeks to de-risk

Fear of threats, raids and other retaliatory measures hamper efforts to find evidence to support Ursula von der Leyen’s economic security strategy

Report finds many German multinationals plan to ‘friendshore’ production out of China to other Asian countries: ‘We are de-risking without too much noise’

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The European Commission is seen by some industry sectors to have acted too hastily with an investigation into subsidies in China’s electric vehicle sector. Photo: EPA-EFE

Published: 3:59pm, 13 Dec 2023Updated: 4:51pm, 13 Dec 2023

As the European Union moves forward with plans to de-risk ties with China, it is encountering a familiar problem: getting businesses to go on the record with their gripes about the world’s second largest economy.

Fear of retaliation from Beijing and a reluctance to air what could be highly sensitive trade secrets among competitors are combining to give officials a headache when gathering evidence to support Commission President Ursula von der Leyen’s economic security strategy.

Trade chief Valdis Dombrovskis on Tuesday announced the EU would push ahead in January with outbound investment screening and a broader suite of export controls.

“These joint risk assessments on technology security and leakage are currently ongoing and should be concluded by early next year,” the Latvian said.

A fear of “spooking” national governments and businesses means the focus is initially narrow. Officials are attempting to assess exposure to and dependencies on potentially hostile states in four hi-tech areas: semiconductors, artificial intelligence, biotechnology and quantum computing.

European Commission President Ursula von der Leyen attends a press conference following talks with Chinese President Xi Jinping in Beijing earlier this month. Photo: Kyodo

The bloc’s department of trade is “halfway” to where it wants to be in terms of analytics, sources said. They have held two working groups with member states, with another planned for Thursday, and believe they are winning some sceptics over to their cause.