China exercises power in Europe not just through its massive trade surplus, but also through investment, lending, and financial power that serves China’s foreign policy goals and helps China acquire the technology necessary to support is ambitious modernization goals. China can do this because it can “pick and choose” in its relations with the European Union, focusing on its direct interests, and often ignoring EU norms. Europeans have begun to require reciprocal openings of the Chinese economy, but they need to do more to prevent China from using their economic links to achieve geopolitical advantage.
🔷The EU needs a system of investment screening and a set of trade defense instruments to protect themselves from Chinese industrial policy. It also needs closer relationships with like-minded partners in Asia to gain leverage with the Chinese. And most of all, it needs sufficient unity to prevent China from suborning individual EU member states.