EU should be more resolute in protecting its companies from US investment interventions
Published: Oct 26, 2023 03:37 PM
Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

Senior European Union (EU) officials have raised concerns to their counterparts in the Biden administration regarding US restrictions on outbound investments targeting China. This development adds to the growing list of trade issues straining transatlantic relations, Bloomberg reported on Tuesday.

In the context of the serious disruption caused by the US technology war against China, European companies continue to suffer mounting economic losses. The dissatisfaction and concern held by the EU over the US' arbitrary investment curbs is justified. This is in line with the demands of the European business community and is an action that aligns with Europe's own interests.

A number of signs indicate that the US government intends to intensify disruption to global economic and technological cooperation. In order to protect businesses from the impact of the US' politicization of economic and trade issues, Europe needs the courage to take more decisive actions, while vocally expressing concerns alone is not enough.

After the US government announced investment restrictions in August, reports surfaced that many European companies expressed concern that such restrictions would have a negative impact on their business operation. It is understandable that European companies are unwilling to be involved in the US' investment restrictions targeting China. The reasons for their concerns and opposition are obvious. The US' practice of forcing European companies to give up opportunities in the Chinese market in order to maintain its own hegemony is unacceptable.

As the US once again announced the tightening of AI chip export restrictions this month, Dutch chip equipment maker ASML Holding NV warned that new updates to US export curbs that are designed to block China's access to highly advanced chips will undercut its sales in the Chinese market, Bloomberg reported.

Amid the gloom of the global economy, the Chinese market holds greater significance for European companies. ASML Holding NV's order intake plunged in the third quarter of 2023 amid a sector-wide slump in the semiconductor industry, leaving the company increasingly reliant on revenue from China, according to Bloomberg.

It is not difficult to foresee that in the field of sensitive technology, the US will continue to make efforts to win over EU countries. However, Europe should clearly reject the US' coercion, taking into account its own business interests.

China, as a major trading partner, is becoming increasingly important for major economies around the world, especially in Europe. There is no inherent conflict between China and Europe, and expanding cooperation would only benefit both. Europe is well aware of the US' motives, which are aimed at maintaining its hegemonic position. The US may not hesitate to sacrifice European businesses and industries when necessary.

Investment restrictions imposed by the US and the broader tech war can only lead to a "lose-lose" situation. The US' escalating tech war is detrimental to both itself and China and may even endanger the already fragile global economy. Europe and other economies should firmly oppose the disruptive behavior of the US in global supply chains and economic cooperation.

In the highly globalized economic and technological cooperation of today, the US is facing increasing resistance in its efforts to maintain technological hegemony through technology wars and decoupling. Officials from the EU, Malaysia and Singapore are skeptical about the US' efforts to cut China out of the global high-tech trading system, expressing reluctance to join Washington's move to contain China's technology development, the Politico reported in June.

The investment restrictions imposed by the US will not achieve the goal of curbing China's tech advance and development, and may even be counterproductive. As China continues to increase its funding in the technology sector, the restrictions imposed by the US will be turned into an opportunity for China to achieve self-reliance in key technologies more rapidly. Chinese universities, research institutions, and companies are in full swing to enhance China's technological capabilities in these fields.

 The US' persistent attempt to exclude China from global high-tech trade will only lead to more backlash from other countries. In the end, it will only isolate itself and make American businesses and the economy pay the price for its misguided policies. 

The author is a reporter with the Global Times.