Embracing systemic rivalry: the new European Commission’s plans for EU-China relations

The guiding documents of the new Commission and the first interventions of the Commissioners in their parliamentary hearings point to a strengthening of the EU’s position towards China.

Key takeaways:

The first von der Leyen administration was beset by the shocks of the COVID-19 pandemic and Russia’s invasion of Ukraine. These shocks, coupled with the rising economic challenge posed by Beijing, led the EU to reconsider its policy toolbox towards China, with Brussels increasingly leaning into creating and using geoeconomic tools against Beijing. 

As the second Leyen Commission comes into office, the question is whether it will maintain continuity or diverge from the approach established over the past few years. There are three ways of gauging what can be expected: by looking at the Commission guidelines drafted by the von der Leyen team, the mission letters she gave to her commissioners, and the statements they made during their hearings in the European Parliament. 

Choosing the Union: How the EU should approach China

In her political guidelines for the 2024-2029 Commission, Ursula von der Leyen makes the case for European unity regarding the risks facing the EU. China is the second most mentioned country in the guidelines after Russia, with none of the mentions being positive. This negative portrayal of China has been a consistent feature for von der Leyen in recent years: from the EU-China tensions during the global health crisis to her insistence on de-risking from China, there is a fine line connecting her views on the Asian country and the reorientation of the Commission’s policies and tools.

Von der Leyen’s approach to China is closely linked to economic competition and geoeconomic risks. Citing the experience of the pandemic, the political guidelines state that the EU should overcome the “structural breaks” that hamper European growth and try to “break China’s monopoly on raw materials essential for batteries or chips.” Similarly, Beijing’s aggressive use of geoeconomic tools and its “no limits” friendship with Russia could make the Commission’s view on China shift further away from economic competitor to systemic rival.

The other issues related to Beijing highlighted in the guidelines are security and defense. Von der Leyen makes the case for the EU to take note of China’s increase in defense expenditures and create a proper defense union to face future challenges. This not-so-rosy picture is complemented by the clear assertion that the EU will work closely with like-minded partners such as Japan, Korea, New Zealand, and Australia to prevent China from changing the global status quo through military means, especially where Taiwan is concerned. 

Von der Leyen’s “Four on China”

Another way to predict what the new Commission’s China policy will look like is by analyzing the instructions von der Leyen gave her commissioners. It’s important to remember that the China portfolio is no longer linked only to the Commission’s position of High Representative/Vice President (HRVP). It now encompasses a broader policy approach, including competition, economic security, and technological sovereignty. Therefore, it is necessary to look at the mission letters received by von der Leyen’s so-called “Four on China,” the four commissioners whose portfolio is most directly linked to China, and their statements during the European Parliament hearings.

As EU High Representative for Foreign Affairs, Kaja Kallas will formally represent the EU vis-à-vis China together with European Council President Antonio Costa. Although von der Leyen does not mention China directly in her mission letter, she warns the EU’s new chief diplomat against weaponization of all kinds of policies, which can be read as an indirect reference to Beijing. Moreover, she instructs Kallas to “shape a new foreign economic policy, focusing on economic security and statecraft,” which will affect how the EU’s relations with China are managed. Beyond these remarks, the bulk of the letter to Kallas is devoted to addressing more pressing or geographically closer issues, such as Russia’s illegal invasion of Ukraine.

Using these guidelines, Kallas tried to differentiate herself from other commissioners during her hearing by deviating slightly from the path von der Leyen set for her. She focused mainly on Ukraine and Palestine, downplaying this way the geopolitical and geoeconomic implications of the actions of major powers such as China. In addition, she mentioned China mainly in the context of the de-risking process, explaining how this policy could be implemented using trade and other economic tools. Finally, she talked about Taiwan only when asked by one of the MEPs present, repeating the position stated in her mission letter: upholding the status quo. 

Another person who is likely to play a key role in the EU’s dealings with China is Maroš Šefčovič, the new Commissioner for Trade and Economic Security. His was the only mission letter explicitly mentioning China, likely because Šefčovič is responsible for the de-risking strategy initiated by von der Leyen. According to it, derisking should be implemented according to the values of free and fair trade, although it is questionable how these can be applied in a world that is very clearly moving away from multilateral rules.

That new international landscape was made evident in Šefčovič’s hearing when he focused his remarks about China on leveling the playing field and de-risking.  He acknowledged the geoeconomic nature of the EU’s relationship with China, noting that “two-thirds of our trade defense instruments are directed at China.” He also posited that China’s own overcapacity problem caused these trade dynamics. Finally, Šefčovič also suggested that the Indo-Pacific, Latin America, and the Caribbean will be the key regions for the EU to implement its de-risking policies by engaging other partners. Seeing how the EU uses its newly developed geoeconomic tools under Šefčovič’s lead will be another subject to watch for the upcoming five years. 

Teresa Ribera, Executive Vice-President for a Clean, Just and Competitive Transition, and Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, are the other two commissioners who will play an important role when it comes to EU-China relations. Ribera’s task will be to bring one of the EU’s historic policies (competition) up to date. Her approach to the recently adopted Foreign Subsidies Regulation and state aid in general will be crucial for Chinese companies doing business in Europe. Conversely, Virkkunen will have to make a new way of understanding technology through the lens of sovereignty central to the Commission’s undertakings. Von der Leyen has asked her to address complex security threats by promoting AI innovation, continuing the Digital Services Act and Digital Markets Act rollout, and implementing the Chips Act. 

However, Ribera’s and Virkkunen’s comments at the Parliament hearings placed China as a low policy priority. While it is true that they have mirrored the mandate given to them by von der Leyen in their respective mission letters, they failed to substantially acknowledge the external impact their domestic policy portfolios can have on China. 

While the “Four on China” are set to play a key role in putting down the framework for Brussels’ China approach, other members of the College of the Commissioners will also shape the policy. This is especially the case with the new Executive Vice-President for Prosperity and Industrial Strategy, Stéphane Séjourné, due to the assigned Competitiveness Coordination Tool, and the new Commissioner for International Partnerships, Jozef Síkela, due to his responsibility for the Global Gateway strategy. However, none of these commissioners’ mission letters showed a substantial focus on Beijing, which points to how von der Leyen plans to run their portfolios: relatively void from China’s perspective while likely seeking to centralize more power around her position and putting her personal imprint on policies.

What remained to be said: Trump and the Member States

Despite the extensive documentation provided by von der Leyen in both the Policy Guidelines and the Mission Letters, three distinct issues were not mentioned, yet they will undoubtedly affect the upcoming Commission’s work on China.

First, the re-election of Donald Trump as US President will have a major impact on EU-China relations. While Trump had not yet been elected when the documents were drafted, it is still noteworthy that there was no mention of the role the US plays in EU-China relations. Similarly, apart from a few exceptions regarding the EU-US Trade and Technology Council, there was a systematic failure to acknowledge the importance of the US to the EU’s external action in the guidelines. This can be interpreted as a poor assessment of Europe’s role in the world or a deliberate way of highlighting the EU’s perceived autonomy in international relations. Considering the resources available at the Commission on China issues, the latter hypothesis is more likely.

Second, the EU’s fragile internal position when it comes to China. Speaking with a single voice has traditionally been difficult for the EU.  Although the EU is not one of China’s priorities, Beijing is definitely a priority for Brussels. The systemic rivalry view of EU-China relations points to the fact that China’s proposed model of governance, which deeply disregards liberal values such as human rights, competes with the EU’s liberal democracy. Although this is a key factor for EU-China relations and the European integration process, there is no direct reference to it in the documents and speeches analyzed. This also ties into the links between authoritarian governments in EU member states and China. As seen recently with Hungary’s elevation of ties with China, governments that deviate from the EU’s liberal values tend to be closer to China. Given the good results that radical right populist parties achieved in last May’s European Parliament elections, these ties will be paramount for EU-China relations in the coming years.

The road ahead for the new Commission

All in all, the Commission’s understanding of China is moving away from the triad of negotiating partner, economic competitor, and systemic rival, focusing solely on its systemic rivalry. This can be seen to varying degrees, depending on how prominent each commissioner’s portfolio is and how high a priority China is for them.

Unforeseen global developments will undoubtedly influence the EU’s approach to China. Depending on the outcome of the invasion of Ukraine or Israel’s war in Palestine, the EU’s ability to cope with China will also be affected. Moreover, the plethora of geoeconomic instruments adopted in recent years will be deployed in the coming years, giving a better idea of how prepared the EU is to deal with China.