In a new review published today, the European Court of Auditors (ECA) looks at the multiple risks – mainly of an economic and political nature – China’s state-driven investment strategy poses to the EU, as well as the opportunities it presents. The auditors warn the EU faces several challenges in managing its response, including how to better set, implement and track its own strategy on China and coordinate the actions of EU institutions and individual Member States as regards their bilateral relations with China. They also point to incomplete data on Chinese investments in the EU and note the need for robust mapping of risks and opportunities.
Since the 1980s, China has been implementing an investment strategy that encourages its state-owned enterprises and private companies to invest in strategic sectors abroad. Its two main pillars are the Belt and Road Initiative (BRI) on connectivity and the industrial Made in China 2025 strategy – both aiming at securing the country’s economic growth and influence. The European institutions have undertaken several initiatives – of which the most recent one in 2019 (the EU-China strategic outlook) marked a shift in tone in EU-China relations by referring to China as both a partner and systemic rival. In addition, Member States cooperate with China bilaterally, often according to their own national interests and without informing the Commission even when there is a requirement to do so. Such a fragmented approach fails to promote the economic power of the EU acting collectively. In this context, the auditors highlight particular challenges the EU faces in acting in a timely and coordinated manner where a concerted approach could be an advantage – as in the case of 5G security.
“China has risen as a significant economic player internationally and EU-China relations will affect the lives and economy of EU citizens for years to come,” said Annemie Turtelboom, the ECA Member responsible for the review. “An effective response to the geopolitical shift would require the EU to step up its strategy on China, and Member States to act together with the EU institutions as a Union.”