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France and us economix relations 201912/15/2023 Long-standing unresolved issues with the EU – such as lack of market access, state subsidies, and the expanding reach of the Chinese Communist Party into the economy – are becoming more pronounced as China pushes for more economic self-reliance.Īs mutual anxiety about dependence grow, miscalculations on both sides risk severing established globally integrated supply chains. And while the EU is reflecting on its vulnerabilities, China is accelerating its efforts towards greater economic and technological autarky. There is a growing realization that deeper integration and potential overexposure come with political risks that could compromise the strategic autonomy of the EU and its member states. The EU is currently reevaluating its relations with China. Supply-chain disruptions during the start of the Covid-19 pandemic in Europe have further reinforced fears of overdependence on China. However, in times of growing political divergence and economic competition between the two sides, some areas of their economic interdependence are increasingly becoming a matter of concern in Brussels, European capitals, and Beijing. ![]() While Europe may rely on China for the likes of protective masks or electronic components, China needs European machinery and specialized equipment to manufacture these goods. Boasting the worlds’ second-largest economy and as an industrial powerhouse with an increasingly wealthy population, the country is now a major trading partner and a key market for the EU.Įconomic dependence cuts both ways and can create linkages that the other side does not want to jeopardize. Over the past two decades, the importance of China’s booming economy for European economic interests has grown quickly. Strong ties can create opportunities for political exploitation but will also often prevent an escalation. Preserving a healthy degree of economic interdependence should be in the interest of the EU and China.The EU’s China policy should not be constrained by an overblown perception of economic vulnerability and build on its relative strengths.Its policy is selective and pragmatic, taking into account its own economic vulnerabilities. China’s growing ability to engage in economic coercion is a fact, but so far it has been mostly taken the form of threat rather than concrete action.In times of growing political divergence and economic competition with China, EU stakeholders need a clear-eyed assessment of Europe’s economic exposure, vulnerabilities, and strengths to adequately balance the different spheres of cooperation and competition. ![]()
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