Updated February 14, 2022
The European Union and China
The European Union (EU) Strategy for Cooperation in the
implement any specific proposals. The EU and China
Indo-Pacific, published in September 2021, outlines an
concluded negotiations on a bilateral Comprehensive
agenda to expand economic, security, and political
Agreement on Investment (CAI) in December 2020, but the
partnerships in a region that is rapidly becoming “a key
European Parliament (EP) suspended ratification of the CAI
player in shaping the international order.” The 27-member
in May 2021, following China’s use of economic coercion
EU’s increasing attention to the Indo-Pacific unfolds in the
against EU member states, firms, and institutes.
context of transatlantic discussions about the direction of
relations with the People’s Republic of China (PRC, or
Supply Chain Measures. In September 2021, the United
China) and the implications of U.S.-China tensions for
States and the EU launched a new Trade and Technology
Europe. Many Members of Congress have expressed
Council (TTC) to address a wide range of trade and
concerns about China’s influence in Europe and the EU, as
technology issues, including enhancing cooperation in
well as interest in policy options for greater U.S.-EU
sectors where China controls key supply chain inputs, such
cooperation regarding China.
as clean energy and pharmaceuticals. Additionally, the
European Commission in December 2020 published a
In recent years, EU views on China appear to have
regulatory “toolbox” for 5G network rollouts that many
hardened and now mirror more closely U.S. concerns about
analysts contend could limit the ability of Chinese firms to
China’s global influence. In a 2019 position paper, the
meet the standards for participation. Several European
European Commission (the EU’s executive body) described
governments have adopted various measures that limit and
China as “simultaneously ... a cooperation partner with
in some cases exclude Huawei’s participation in the
whom the EU has closely aligned objectives, a negotiating
buildout of their 5G network infrastructure.
partner with whom the EU needs to find a balance of
interests, an economic competitor in the pursuit of
Response to PRC Economic Coercion Some European
technological leadership, and a systemic rival promoting
policymakers have expressed concerns about China’s use of
alternative models of governance.” Many saw the paper’s
economic coercion to advance certain geopolitical
uncharacteristically sharp tone as indicative of mounting
objectives. The EU is currently considering a proposed anti-
frustration with China’s trade and investment practices, its
coercion instrument that could allow the EU to respond as a
aspirations to become a global technology leader and
bloc against economic coercion of a single member state,
standard setter, and its promotion of a governance model at
among other tools, but divergent views among member
odds with core EU values.
states could complicate its finalization or deployment. In
2021, China imposed a de facto trade embargo on Lithuania
Notwithstanding initial suggestions that China’s
and European firms that source from Lithuania after
Coronavirus Disease 2019 (COVID-19) “facemask
Lithuania announced it would open an office in Taiwan. In
diplomacy” and “vaccine diplomacy” could build goodwill,
response, in January 2022, the EU initiated a trade dispute
many analysts assess that the pandemic and other recent
case at the World Trade Organization, and some experts
developments have further strained EU-China relations. An
contend that China’s continued pressuring of Lithuania
exchange of sanctions in March 2021 stemming from EU
could increase support for the proposed anti-coercion
concerns about human rights in China reflected what some
instrument among member states.
observers have described as a low point in relations.
Human Rights and Political Issues
Economic Issues
European criticism of human rights and political issues in
China, and China’s reaction to such criticism, has been a
Although many European policymakers seek to sustain or
deepen economic ties with China, they appear to share U.S.
growing source of tension. Many EU and member state
concerns over China’s industrial policies, which have led to
officials have expressed concern about human rights
violations of the Uyghur Muslim and other Muslim
asymmetric trade and investment advantages for China, as
well as China’s growing control of certain global supply
populations in China’s Xinjiang region. The EP and
chains. EU officials also have expressed concern regarding
national parliaments in several member states have passed
China’s use of economic coercion for political objectives.
resolutions criticizing human rights violations of Uyghurs.
In March 2021, the EU sanctioned four officials and one
entity in Xinjiang under the bloc’s Global Human Rights
Trade and Investment Asymmetries. The EU for some
Sanctions Regime. The designations were coordinated with
time has sought to increase market access in China for
European firms and investors amid Chinese industrial
sanctions imposed by the United Kingdom, Canada, and the
policies that limit foreign investment and subsidize
United States. China countered with retaliatory sanctions
against selected EU entities, nongovernmental
domestic firms in strategic sectors. The EU has worked
organizations, and scholars. Many saw China’s respons
with the United States and Japan to develop approaches to
e as
counter China’s subsidies, but the group has not moved to
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The European Union and China
disproportionate and outsized compared with the EU
“17+1,” as a potential source of division within the EU. The
designations.
17 European countries involved included 12 EU members,
although Lithuania’s May 2021 departure reduced the
Some European policymakers share U.S. concerns over
mechanism to 16 members. The mechanism’s prospects
threats to civil and political rights in Hong Kong. Several
have grown increasingly uncertain amid some participants’
EU member states suspended extradition treaties with Hong
reported disappointment that China’s pledges of investment
Kong in response to China’s June 2020 National Security
and trade opportunities have not materialized.
Law for Hong Kong. In January 2022, the EP passed a
resolution urging the EU to sanction Hong Kong and PRC
China’s Perspective
officials “responsible for the ongoing human rights
While China generally continues to portray its relationship
crackdown” in Hong Kong.
with the EU as friendly and cooperative, State Councilor
and Foreign Minister Wang Yi described the EU’s
European initiatives regarding relations with self-ruled
simultaneous acknowledgement of China as both partner
Taiwan also have caused tensions with China, which claims
and rival as the product of “cognitive dissonance” that is
sovereignty over the island democracy and has sought to
undermining China-Europe relations. From China’s
limit other countries’ interactions with it. In addition to
perspective, this dissonance complicates its EU policy,
Lithuania’s efforts to strengthen ties with Taiwan, the EP
which, as laid out in the December 2018 Policy Paper on
adopted a resolution in October 2021 calling for closer EU
the European Union, is built on the premise of “all-
relations with Taiwan and sent its first official delegation to
dimensional, multi-tiered and wide-ranging exchanges and
visit Taiwan the following month.
cooperation.”
In July 2021, the EP adopted a resolution urging other EU
China’s EU policy includes rhetorical support for European
institutions to put democracy, human rights, and the rule of
integration and autonomy, which many Chinese officials
law at the center of EU-China relations. The resolution also
have described as a way to promote a multipolar, less U.S.-
urged European officials to boycott the 2022 Beijing Winter
centric world order. In December 2021, State Councilor
Olympics unless the government of China “demonstrates a
Wang conveyed the Chinese government’s hope that
verifiable improvement” on human rights issues. Several
“Europe, as an important force in the process toward greater
European countries did not send diplomatic representation
multipolarity, will shape an independent, objective and
to the event, citing human rights concerns.
rational perception of China at an early date, and promote
and deepen its mutually beneficial cooperation with China
Differing Views Within Europe
following the principle of strategic autonomy.”
Despite seemingly growing agreement within the EU on
certain aspects of relations with China, forging a consistent,
China’s support for the concept of EU “strategic
consensus-based policy has often been difficult. Many
autonomy,” in particular, seems at least partially
major EU decisions on external economic relations and
attributable to China’s desire to weaken ties between the
foreign policy require unanimous agreement from the EU’s
United States and the EU, at a time when the United States
27 members, which have varying national security concerns
is seeking to strengthen transatlantic ties to help counter
and economic interests, as well as differing bilateral
China in certain areas. Some Chinese analysts describe the
relations with China. Some member states have deeper
EU as a critical factor influencing U.S.-China relations and
trade and investment ties to China, making economic
likely hope a more autonomous EU could resist (or
coercion a potentially more worrisome prospect for them
moderate) U.S. attempts to take a more assertive stance
than for others. Some observers suggest that Germany, for
toward China.
example, remains relatively cautious about upsetting
relations with China, in part because of its extensive trade
U.S.-EU Cooperation
and investment relations. Further complicating efforts to
The Biden Administration and the EU have committed to
reach consensus on China, views may differ among key
intensifying cooperation to address shared concerns about
stakeholders within EU member states, such as political
China and have restarted a dialogue on China begun by the
parties, business groups, and civil society organizations.
Trump Administration. Several measures announced at a
June 2021 U.S.-EU summit aim to foster collaboration to
Some observers assert that China has sought to sow
counter China’s growing influence, especially on trade and
divisions within the EU and to selectively cultivate relations
technology. At the same time, many in the EU remain wary
with member states to shape EU policies toward China
of the implications of intensifying U.S.-China tensions for
indirectly. Greece (under a prior government) and Hungary,
Europe and are reluctant to antagonize a major economic
for example, have vetoed EU statements critical of China
partner. EU officials also point to a need for cooperation
on several occasions, although they also have agreed to
with China on global concerns, such as climate change.
such statements on China and to specific measures in other
Varying economic and political interests among EU
instances. Some critics attributed these vetoes to the
member states also could affect efforts to more closely
countries’ generally good bilateral relations and economic
align U.S. and EU policy toward China.
cooperation with China.
Sarah E. Garding, Analyst in European Affairs
Some officials and analysts have regarded the China-
Ricardo Barrios, Analyst in Asian Affairs
backed China-Central and Eastern European Countries
Derek E. Mix, Specialist in European Affairs
(CEEC) engagement mechanism, known in Europe as
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The European Union and China

Michael D. Sutherland, Analyst in International Trade and
Finance
IF10252


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https://crsreports.congress.gov | IF10252 · VERSION 10 · UPDATED

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