Europe Wants to ‘De-Risk’ Its China Relationship. Or Does It?
Key Takeaways
E.U. officials are characterizing their approach to managing interdependence with China as “de-risking,” in contrast to U.S. “decoupling.”
Compared with U.S. adults, Europeans are less enthusiastic about using economic tools like investment screening mechanisms or export controls for national security purposes.
Divisions are somewhat more pronounced among major E.U. member states: Italian and Spanish adults on net don’t want to pull back from economic engagement with China if doing so could pose economic risks, and are less likely to approve of using these tools in the name of national security.
Since E.U. member states retain responsibility for their own national security policy while the European Union manages most economic policy, these divisions will complicate bloc-wide coordination.
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Von der Leyen lays out a vision of de-risking E.U.-China relations
In a landmark speech in late March, European Commission President Ursula von der Leyen called for more cohesiveness and faster trade action to reduce Europe’s reliance on China. Previously, she had hinted at the need for more defensive trade tools, such as outbound investment controls on critical tech and enhanced export controls to complement existing inbound investment screening mechanisms. At the same time, she has characterized the European Union’s approach to addressing economic interdependence with China as “de-risking,” implicitly contrasting it with U.S. “decoupling,” commonly understood to imply a more definitive separation.
Europeans and Americans have differing views on economic statecraft
The turn of phrase is apt: Our data shows that, compared with U.S. adults, Europeans on average are slightly less enthusiastic about using such tools, including inbound and outbound investment screening measures and export controls. But more Europeans than not support them, with inbound investment screening in the lead.
E.U. Adults Are Less Enthusiastic Than U.S. Adults About Controls on Investment and Trade in Critical Technology
U.S. survey conducted Feb. 22-24, 2023, among a representative sample of 2,210 adults, with an unweighted margin of error of +/-2 percentage points. Figures may not add up to 100% due to rounding.
Southern Europeans are less likely to support de-risking
National security in the European Union is the responsibility of individual E.U. member states. Much like current investment screening policies are developed and implemented by national authorities and subsequently coordinated at the E.U. level, implementation of the latest policies under discussion — including an outbound investment screening mechanism — would also be the responsibility of member states. As such, country-by-country differences in public support for these measures are important.
Among a subset of major E.U. countries, we see clear evidence of north-south differences. Despite Germany and France exporting more goods to China, people in each country are less averse to using these particular tools than Spanish and Italian adults. In some sense, this is good news for European policymakers pushing for de-risking: The countries that would screen the largest volume of transactions and trade flows would also encounter less popular resistance to doing so. On the other hand, it indicates significant difficulties lie ahead for von der Leyen’s vision of E.U.-wide coherence on these policies.
Southern Europeans Are Less Supportive of Economic National Security Restrictions
Mirroring their hesitancy to implement export controls and outbound investment screening mechanisms, Spanish and Italian adults are more likely than not to favor unaltered economic engagement with China if reducing relations would entail economic losses, and they do so at higher rates than their northern neighbors. By contrast, more French adults than not want to decrease economic engagement with China even if it carries costs. The German public is torn, with about equal shares favoring the status quo and decreasing engagement.
Spanish and Italian Adults Prefer the Status Quo in Economic Relations With China
Room for change, in either direction
As elected officials and trade negotiators learned the hard way during mass protests against the Trans-Atlantic Trade and Investment Partnership, esoteric policy topics that the public usually ignores can quickly enter into the common discourse and become politicized — think of chlorinated chicken or, more recently, semiconductor supply chains.
Large shares of European adults still don’t have well-formed views on export controls and investment screening, whether inbound or outbound. But with high-profile cases in the news, like a proposed ban on the inbound investment of TikTok in the United States, or new Dutch export controls on sales of ASML’s most advanced lithography equipment to China, undecided shares could quickly shift their views to one side or the other. For E.U. policymakers and companies with a dog in this particular fight, southern Europe is most worth watching for signs that it may play spoiler to von der Leyen's de-risking vision.
Sonnet Frisbie is the deputy head of political intelligence and leads Morning Consult’s geopolitical risk offering for Europe, the Middle East and Africa. Prior to joining Morning Consult, Sonnet spent over a decade at the U.S. State Department specializing in issues at the intersection of economics, commerce and political risk in Iraq, Central Europe and sub-Saharan Africa. She holds an MPP from the University of Chicago.
Follow her on Twitter @sonnetfrisbie. Interested in connecting with Sonnet to discuss her analysis or for a media engagement or speaking opportunity? Email [email protected].