Europe can afford to fight with China

As the European Union confronts the immense challenge of economic recovery from the coronavirus-induced recession, the pressure on Europe to submit to China’s political dictates on Huawei, Taiwan, and other national interests overseas may grow.

Just last week, fearful of repercussions to its trade relationship with China, the European Unionsoftenedcritical language in an upcoming report on China’s disinformation campaign about the coronavirus pandemic.

But Europe can afford to say no to China. DIIS senior researcher Luke Patey argues in Foreign Policy that not only is Europe far less reliant on the Chinese market than many presume, but the strategic vulnerabilities and loss of competitiveness from trading and investing in China are also starting to outweigh economic opportunities. Chinarepresentedjust 5.5 percent of the total trade of EU member states in 2018 and is no longer a land of vaulting revenue growth for many European corporations.

Fixating on negotiating market access with China can blind Europe to broader horizons in the global economy.As emerging AsiaovertakesChina as the world’s main growth engine, Europe can build on its trade and investment portfolio across India and Southeast Asia.

Closer to home,Europe can also foster manufacturing centers in Central and Eastern Europe and Turkey to revitalize its role in global trade. Rather than chasing every last dollar in China, Europe should invest in its regional innovation and industrial competitiveness. Nurturing its own leading corporations as global champions and supporting fellow democracies around the world better serve Europe’s economic and political interests.