A member of the Peoples Armed Police stands guard in entrance of the flag of the European Union on the European Delegation in Beijing, China.
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As the US seems at disengaging from China, Europe might quickly discover itself in a candy spot.
U.S. President Joe Biden has, for many of his time period up to now, adopted a harsh tone on China, calling the world’s second-largest financial system the most serious competitor to America. Diplomatic dialogue between the 2 hit a rockier patch earlier this 12 months when Washington accused Beijing of utilizing a spy balloon to acquire intelligence from U.S. army websites.
“The U.S.’ hawkish coverage stance in direction of China implies that China wants to enhance relations with Europe to mitigate the affect of export controls. Due to this fact, China has an incentive to work exhausting on bettering EU relations,” Anna Rosenberg, head of geopolitics on the Amundi Institute, advised CNBC through e-mail.
Officers in Europe have adopted a barely totally different method from the Biden administration, preferring to take a softer stance with Beijing, recognizing its significance to the European financial system. Information from Europe’s statistics workplace reveals that China was the third-largest buyer of European goods throughout 2021.
“The EU is in a really totally different scenario than the U.S., which is clearly pursuing policy-led disengagement with China,” Jacob Kirkegaard, a nonresident senior fellow on the Peterson Institute for Worldwide Economics, stated through e-mail.
“Seen from China, the EU is an important high-income market that it nonetheless has largely unfettered entry to. This in flip makes it far much less probably that China will actively attempt to restrict commerce with the EU,” he stated, including China “has rather a lot to lose from a commerce conflict with the EU.”

European Fee President Ursula von der Leyen has, in current months, pushed for a coverage of de-risking from Beijing — decreasing dependency on the nation in important sectors similar to uncooked supplies and semiconductors. Nonetheless, European officers aren’t wherever close to supporting a complete breakup of financial and diplomatic ties.
“The political must de-risk the EU-China relationship is totally totally different from US-China relations. In a world characterised by U.S.-China rivalry, the EU is an important financial companion for each — this offers the EU vital political advantages versus each Beijing and Washington,” Kirkegaard additionally stated.
The EU’s single market, the place items and providers transfer freely throughout borders, is residence to 23 million firms and greater than 450 million customers, in line with information from the European Council.
“We do not wish to feed the U.S.-China rivalry,” an EU official, who didn’t wish to be named as a result of delicate nature of the scenario, advised CNBC. “We desire to calm issues down … with out being naïve,” the identical official stated.
The American rhetoric towards China eased barely following a gathering of G7 leaders over the weekend, with Biden warming to the idea of de-risking, slightly than fully detaching the 2 largest economies on this planet.
Beijing would not have relished the thought of G7 leaders coming collectively to criticize China’s insurance policies. Within the wake of the gathering, China imposed a ban on its firms shopping for from American chipmaker Micron.
Alicia García-Herrero, a senior fellow at European assume tank Bruegel, stated Europe won’t discover itself in a straightforward place amid these U.S.-China tensions.

“I really very a lot doubt that may occur,” she stated concerning the prospect of Washington and Beijing each trying to Europe for its financial ties.
“China is taking a number of retaliation motion towards Europe in some ways and the sense that Europe is more and more depending on China — this sort of strategic dependence for inexperienced power is changing into more and more clear,” she stated, noting Beijing is conscious of the leverage it holds as Europe seems to develop a extra sustainable financial system.
China is the largest supplier of a number of important uncooked supplies on this planet, in line with a research revealed by the European Fee, that are utilized in merchandise like electrical autos.