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Since March, two European think tanks – the European Union Institute for Security Studies (EUISS) and the European Council on Foreign Relations (ECFR) – have released reports titled “China – A fragile power? How Europe can use its economic leverage over Beijing” and “Beijing hold’em: European cards against Chinese coercion.”

The reports portray China’s competitiveness in manufactured exports and its advantages in critical minerals as forms of “economic coercion” against the EU that are exacerbating Europe’s “deindustrialization.” They recommend that the EU employ economic leverage and build “a doctrine of economic deterrence” against China through four major tools: export restrictions, import restrictions, controls over critical infrastructure and cybersecurity, and financial as well as scientific research restrictions.

While the reports’ core arguments are themselves marked by confused logic and significant analytical flaws, they nonetheless reflect a possibility that the EU’s “de-risking” approach toward China in trade and economic relations could intensify further. It also cannot be ruled out that geopolitical confrontation may increasingly come to dominate the EU’s China-related economic and trade policies.

First, the reports signal the latest direction of the European Commission’s (EC) economic and trade policy toward China. These two think tank reports should not be viewed merely as expressions of academic opinion; rather, they are part of a broader effort to shape public discourse. This is evident in several respects.

The reports were released shortly after the EU introduced its Industrial Acceleration Act in early March, showing a clear tendency to echo the EC’s policy agenda. Since the beginning of the year, the EU has also put forward a revised draft of its Cybersecurity Act. Together, the two legislative proposals impose broad barriers to Chinese enterprises’ trade and investment in Europe – covering batteries, electric vehicles, solar photovoltaics, critical materials, and 18 key sectors including energy, transport, and information and communications technology. The two reports’ recommendations to deploy economic leverage against China align with the core provisions of EU legislative measures.

The two reports are complementary in content and together form a coherent logic underpinning a tougher EU economic and trade policy toward China. The report by the EUISS supports the EC’s strategic objective of maintaining Europe’s leverage by preserving China’s dependence on the EU. Meanwhile, the ECFR report focuses on providing concrete policy tools for the EC to counter what it labels as China’s “economic coercion.”

Second, the reports’ narrative represents a typical attempt to shift blame for Europe’s own problems onto others.

The EUISS report claims that China is using its economic strength on the international stage to “deliver shocks” to the EU, thereby accelerating Europe’s “deindustrialization.” This line of argument selectively seeks the roots of Europe’s problems externally, attributing the EU’s difficulties to supposedly “unfair shocks” from China. Politically, such a narrative carries a certain appeal in an increasingly right-leaning European public discourse. Yet if followed to its misled conclusion, it would ultimately reduce attention to Europe’s own structural problems and do nothing to address the EU’s declining competitiveness.

Now, the European economy faces multiple challenges, including weak growth, insufficient innovation, and persistently high energy costs. Rational voices among Europe’s political elites had already objectively identified the roots of these economic problems in the 2024 report called The Future of European Competitiveness. 

The report listed three major crises facing Europe – an innovation gap, high energy costs, and external dependency exposure – and accordingly proposed solutions centered on innovation-driven breakthroughs, green decarbonization, and strategic autonomy.

These rational perspectives from within Europe point to the real key to resolving Europe’s economic difficulties. If EC handles China-EU economic and trade relations solely through the lens of “blame shifting” seen in the above reports, Europe’s competitiveness will inevitably continue to erode.

Third, the reports wrongly portray a relationship of mutual cooperation as one of “coercion and counter-coercion.”

The ECFR report selectively labels China’s legitimate measures to safeguard national sovereignty, regulate market order, and promote industrial upgrading as “economic coercion.” It advocates confrontational pressure tactics, arguing that “de-risking” without deterrence is ineffective. The report disregards the contribution that deeply integrated China-EU industrial and supply chains have made to both economies and instead treats the mutually beneficial relationship built over the past 50 years of China-EU economic engagement as “a source of risk.”

In terms of trade volume, according to Chinese customs data, China's trade with the EU reached 5.93 trillion yuan ($867 billion) in 2025, up 6 percent from a year earlier, accounting for 13 percent of China's total foreign trade. From the perspective of the trade structure, intermediate goods account for more than 40 percent of China-EU trade. Industrial equipment exported from China to Europe is, on average, about 30 percent cheaper than comparable European products, effectively helping European companies reduce production costs and enhance competitiveness.

By framing China-EU industrial and supply chain interdependence as a relationship of “coercion and counter-coercion,” the reports will mislead EU’s economic and trade policy toward China. Such thinking could easily drive an unlimited expansion of “de-risking,” ultimately resulting in de facto “decoupling” and negatively affecting the EU’s green transition as well as its broader social and economic development.

On April 17, China formally submitted comments to the EC regarding the draft revision of the EU Cybersecurity Act, expressing serious concerns and warning that if the EU insists on enacting the legislation while targeting Chinese companies in a discriminatory way, China will take corresponding countermeasures.

The sound and stable development of China-EU economic and trade relations requires joint efforts from all sides. Mainstream European think tanks should view China-EU economic cooperation objectively and recognize its mutually beneficial nature, abandon cold war thinking, and stop promoting misleading narratives such as so-called “Chinese coercion” or irresponsibly encouraging unilateral confrontation.

Safeguarding the stability of global industrial and supply chains and promoting the steady and long-term development of China-EU economic and trade relations will serve not only the common interests of both China and the EU, but also the shared interests of the wider international community.

The authors are experts with the Chinese Academy of International Trade and Economic Cooperation. bizopinion@globaltimes.com.cn