Europe’s relationship with China has entered a new and more complex era. The European Union seeks to “de-risk” without decoupling—preserving cooperation where possible while protecting strategic interests.
Across the Channel, the United Kingdom faces similar tensions, from Beijing’s blocked London embassy to intelligence scandals and renewed scrutiny of Prince Andrew’s past China links.
Meanwhile, Europe’s dependence on rare earths and the shadow of the Ukraine war expose the global fault lines in relations with Beijing.
Europe’s relationship with China has entered a new—and more complicated—phase. Brussels calls it “de-risking, not decoupling”: a bid to preserve cooperation where interests align while hardening Europe’s defences in strategic sectors and responding more robustly to coercive or unfair practices. Beijing, for its part, says it welcomes a Europe with “strategic autonomy,” and has courted individual capitals even as tensions with EU institutions have mounted. The result is a dense web of competition and interdependence, now shaped as much by trade defence instruments and sanctions lists as by climate working groups and diplomatic summits.
The big picture: three lenses at once
The EU’s own formula—China as partner, competitor and systemic rival—has become operational. On climate and biodiversity, leaders still look for partnership; in trade, they see an increasingly sharp competitor; in governance and security, a systemic rival whose policies can undercut European interests and values.
The “de-risking” agenda that Commission President Ursula von der Leyen first set in motion in 2023 is now being implemented through an expanding tool-set: foreign-subsidy probes, strengthened trade defences, the anti-coercion instrument, tighter export controls and a new push to review outbound investments in sensitive technologies such as semiconductors, AI and quantum computing.
Trade: record volumes, growing friction
Trade ties remain enormous—and imbalanced. China is still the EU’s largest source of goods imports and a top-three destination for exports. Eurostat estimates the EU’s goods-trade deficit with China at roughly €306 billion in 2024, underscoring persistent asymmetries despite some post-pandemic normalisation.
That backdrop feeds directly into headline disputes. Brussels’ anti-subsidy case against Chinese battery electric vehicles (BEVs)—with tariffs imposed after finding distortive state support—has become the emblem of Europe’s more assertive stance. Beijing responded with counter-investigations into European goods, escalating a tit-for-tat dynamic that now touches wind, solar and other green-tech supply chains.
At the same time, Chinese manufacturers are localising. BYD has doubled down on Hungary (buses today, cars tomorrow) and is weighing further assembly capacity in southern Europe—moves that could both soften tariff impacts and deepen political ties with receptive host governments.
Economic security: Europe rewires its risk posture
“De-risking” is no longer a slogan. It is a policy architecture now visible in at least four areas:
- Critical technologies: joint EU-member-state risk assessments and tighter controls.
- Outbound investment review: screening of European firms’ investments abroad to prevent leakage of dual-use technologies.
- Anti-coercion instrument (ACI): the EU’s response toolbox after the Lithuania-Taiwan episode.
- Sanctions enforcement: scrutiny of entities suspected of aiding Russia’s war effort and of “back-door” imports of fuels refined from Russian crude.
Diplomacy: summits, climate—and stalemates
Despite frictions, high-level dialogue has resumed. At the 25th EU–China Summit in July 2025, leaders carved out common ground on climate ahead of COP30, even as disputes over trade and human rights persisted.
The Comprehensive Agreement on Investment (CAI) remains frozen. Although Beijing lifted most sanctions on Members of the European Parliament earlier this year, political trust has yet to recover.
The CAI was designed to open new sectors of China’s economy to European investors and establish clearer rules on market access, transparency and state-owned enterprises. Negotiated between 2013 and 2020, it was hailed as a landmark economic framework—but its ratification stalled after China sanctioned EU officials and MEPs in 2021 in retaliation for EU human-rights sanctions. The agreement remains on hold until confidence and reciprocity can be restored.
Meanwhile, the EU continues to pursue cases against China at the WTO, including over intellectual-property restrictions and the fallout from the Lithuania dispute.
A tale of many Europes: national lines diverge
While Brussels tightens the common stance, member-state politics still shape the map:
- Germany—balancing risk reduction with industrial exposure.
- France—championing “strategic autonomy” while pressing human-rights concerns.
- Hungary—China’s loudest advocate inside the EU, hosting massive EV and battery investments.
- Baltic states—pushing for a values-based line after enduring economic coercion.
Beijing knows there is no single “European” China policy—and often courts national capitals to test the seams.
The United Kingdom factor: a mirror across the Channel
Although no longer an EU member, the United Kingdom remains an essential part of Europe’s strategic landscape, and its recent experiences with Beijing illustrate the dilemmas now confronting democracies on both sides of the Channel.
In London, controversy continues over China’s plan to build a new “mega-embassy” complex near the Tower of London, on a site once occupied by the Royal Mint. Local councils initially blocked the proposal on security and planning grounds, citing concerns from intelligence agencies about surveillance risks. The issue has become symbolic of Britain’s uneasy balance between openness and vigilance toward China.
Further straining relations are a series of political and intelligence-related scandals. Former minister Lord Peter Mandelson faced renewed scrutiny over his business and social links with Chinese interests, while two men—Christopher Cash, a former parliamentary researcher, and Christopher Berry, an academic—were arrested and charged under the Official Secrets Act with allegedly passing sensitive information to a Chinese agent.
On 15th September 2025, prosecutors dramatically dropped the charges, acknowledging that while information had been shared, the government could not legally establish that China qualifies as “an enemy” under the terms of the Act. The case exposed a profound legal and diplomatic dilemma: can a country that is Britain’s fourth-largest trading partner, and an interlocutor on climate, simultaneously be treated as a hostile power in law?
Amid this swirl of controversy, Prince Andrew has also re-emerged in the public eye following renewed attention to his past commercial and diplomatic contacts in Asia, including his time as the UK’s Special Representative for Trade and Investment. While no wrongdoing has been alleged, correspondence involving Chinese business figures has resurfaced, reigniting debate about the blurred lines between diplomacy, soft power, and personal influence in Britain’s foreign relations.
Together, these episodes sharpen the political question now resonating across Europe as well:
Is China a challenge, a competitor, a threat—or an enemy?
The UK government’s 2023 Integrated Review Refresh labelled China an “epoch-defining systemic challenge”—language mirrored, though softened, in Brussels. The inability to define China as an “enemy” in court underscores the ambiguity of Western policy: determined to protect security interests yet dependent on engagement for economic stability and global problem-solving.
Strategic sectors and rare-earth resilience
Europe’s determination to “de-risk” is perhaps most visible in its effort to secure critical technologies and raw materials that underpin the green and digital transitions. China remains the dominant supplier of rare earth elements, graphite, magnesium, and other strategic inputs vital to Europe’s electric vehicles, wind turbines, and defence systems.
The EU has learned a painful lesson from the solar-industry collapse a decade ago, when low-cost Chinese imports wiped out much of Europe’s domestic production. The Critical Raw Materials Act, adopted in 2024, sets ambitious targets: at least 10 percent of strategic materials must be mined within the EU, 40 percent processed domestically, and 25 percent recycled—while no single third country should provide more than 65 percent of any key input. The law is both industrial strategy and geopolitical shield.
Brussels is also forging new partnerships with resource-rich countries such as Canada, Australia, Chile, Kazakhstan, and Namibia, seeking to build transparent and sustainable supply chains that reduce dependency on China’s refining dominance. The European Investment Bank has committed billions in credit guarantees to help EU firms develop non-Chinese processing capacity and secure long-term contracts for rare metals.
Yet despite these efforts, China’s position remains formidable. It controls more than 80 percent of the global market in rare-earth refining and is using export controls strategically. In 2024, Beijing restricted exports of gallium, germanium, and graphite—materials crucial to semiconductors and battery anodes—prompting alarm in Brussels and Washington. European companies now face higher input prices and the risk of supply disruptions if relations deteriorate further.
The European Commission is pushing ahead with industrial alliances in batteries, hydrogen, semiconductors, and critical materials, aiming to replicate the cooperative model that once boosted Airbus. The ultimate goal is technological sovereignty—a Europe capable of sustaining its green and digital revolutions without being hostage to a single supplier, however important that supplier might be.
China, for its part, has been quick to highlight Europe’s dependence while offering reassurance that it seeks “mutual benefit, not restriction.” But Beijing’s own rhetoric about “self-reliance in science and technology” and its aggressive push to dominate clean-tech value chains tell a different story. In practice, both sides are building parallel ecosystems—interconnected yet increasingly insulated from political risk.
Ukraine and geopolitics: the shadow over the relationship
Russia’s ongoing war in Ukraine continues to cast a long shadow over Europe’s dealings with China. While Beijing proclaims neutrality and calls for dialogue, European policymakers remain sceptical of China’s stance. President Xi Jinping has deepened his “no-limits” partnership with Vladimir Putin, hosting multiple high-level visits and expanding bilateral trade to record levels.
From Brussels’ perspective, the issue is not China’s diplomacy, but its economic lifelines to Moscow. European intelligence assessments suggest that Chinese firms—sometimes via intermediaries in Central Asia or the Middle East—have supplied dual-use components such as microchips, optics, and industrial machinery that help sustain Russia’s military-industrial base. Although Beijing denies such involvement, the perception that China is indirectly aiding Russia has hardened attitudes within the EU.
This has already produced tangible policy consequences. The EU has imposed sanctions on a growing list of Chinese entities, mostly smaller technology exporters, and warned Beijing that continued back-door support for Russia could trigger wider economic restrictions. The 14th and 15th EU sanctions packages both included Chinese companies accused of supplying components for drones and missile systems used by Russian forces.
The conflict has also realigned Europe’s strategic geography. NATO’s 2025 summit communiqué explicitly referred to China as a “systemic challenge” for the first time, linking its alignment with Russia to broader risks for Euro-Atlantic security. In response, Beijing denounced what it called “Cold War thinking.”
For the EU and the UK alike, Ukraine has transformed the China question from one of trade policy into a test of values and resilience. Can Europe work with a power that refuses to condemn aggression on the continent? Should it prioritise economic stability or strategic clarity?
Even within the UK, where the Integrated Review Refresh names China as a “systemic competitor,” policymakers are divided. Some urge engagement to moderate Beijing’s influence in Moscow; others argue for containment and closer alignment with Washington’s China strategy.
Meanwhile, Ukraine itself has become a diplomatic crossroads. Chinese peace proposals are politely acknowledged but rarely taken seriously in Brussels. European diplomats note that Beijing’s “twelve-point plan” omits any reference to Russian withdrawal or accountability for war crimes—elements that make genuine neutrality questionable.
Still, there are glimmers of pragmatism. China’s participation in global food-security and grain-export discussions, and its quiet cooperation with EU officials on nuclear-safety monitoring around the Zaporizhzhia plant, show that limited coordination remains possible.
In the end, the Ukraine war crystallises Europe’s broader dilemma with China: cooperation is indispensable on global issues like climate, trade, and debt relief, but trust is in short supply. The war has underscored that economic interdependence does not guarantee shared values—and that “strategic autonomy” now means being ready for a world where even partners can become spoilers.
What next? Five signposts to watch
- EV truce or escalation – will tariff disputes deepen or de-escalate?
- Outbound-screening architecture – member-state reports due mid-2026.
- Green-tech resilience – can Europe build secure supply chains fast enough?
- Comprehensive Agreement on Investment (CAI) after the thaw – any path to resuscitation remains politically distant.
- Member-state drift – Chinese investment concentration risks fragmenting EU unity.
Bottom line
EU–China relations in 2025 are no longer about choosing cooperation or confrontation—they are about managing both simultaneously. The UK’s recent experiences reveal how hard it is even to define the relationship in legal or moral terms: not friend, not foe, but an intricate mix of partner, competitor and systemic rival.
For Brussels, London and every European capital, the challenge ahead is to preserve engagement without illusion, defend sovereignty without paranoia, and keep open the channels of dialogue that a fractured world still desperately needs.
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