The European Union (EU) flags in front of EU headquarters in Brussels, Belgium. Photo: VCG

The EU is set to join “Pax Silica” this week, a US-led scheme to coordinate export controls and co-investment in advanced chips that “aimed at curbing China's technological rise,” particularly in artificial intelligence (AI), according to a report by the Euro News on Monday. The move, under which the bloc is to purchase “at least $40 billion worth of US AI chips,” has already drawn criticisms and doubts from EU members and officials, according to media reports. 

The decision came as the EU has been joining more US-led “small cliques” such as the US-EU strategic partnership on critical minerals and Forum on Resource Geostrategic Engagement, which some critics say come at the cost of sacrificing and surrendering its own interests. 

The trend underscores the bloc’s anxiety over its lag in key technologies, and rather than reflecting on itself on the root cause, the EU is hyping the “China threat” and pinning hopes on becoming external vassals as a quick fix, a Chinese analyst said, warning that the move could put the EU’s long-advocated “strategic autonomy” into a severe test and severely disrupt the local companies’ supply chain.

The “Pax Silica” was set up in December last year with the intention to “address deficits in critical mineral access and counter China's massive investment in its critical minerals and the tech sector,” according to news portal politico.com. To date, the UK, Japan, South Korea, India and Australia have already joined, as have three EU member states — Greece, Finland and Sweden, according to the Euro News report. Under the EU-US trade agreement, the bloc is also set to purchase “at least $40 billion worth of US AI chips,” the report said. 

The EU ambassadors are due to green light the initiative on Wednesday. And ministerial endorsement would still be required, and could come as early as next week, the report said.

However, there has been a divide among EU members on joining the initiative. A Bloomberg report said in May that some EU officials remain uncertain about the initiative — including its scope and objectives. France has voiced objection, framing it “as nothing short of an attempt to colonize Europe and at odds with the EU's tech sovereignty agenda, which seeks to reduce strategic dependence on foreign suppliers, including American ones,” according to the Euro News report. 

Cui Hongjian, a professor at the Academy of Regional and Global Governance at Beijing Foreign Studies University, told the Global Times on Tuesday that there will be a noticeable two-tier polarization within the EU, as the bloc’s members diverge on their tech infrastructure capacity and the overall initiative – in contrary to the bloc’s pursuit for strategic autonomy – will make EU’s high-tech industry more dependent on the US supply chain.

“Take the semiconductor sector as an example. The EU has launched the European Chips Act to boost its tech dependency. Yet this initiative also requires the bloc to buy a large quantity of chips from the US. Will this move ultimately sacrifice the EU’s interests and undermine its strategic autonomy?” Cui asked.

The joining of Pax Silica adds to a slew of EU’s recent moves explicitly designed to target China. In recent months, the EU has been aggressively pushing forward legislation, including the Cybersecurity Act and Industrial Acceleration Act, which imposes restrictive requirements on foreign investment. These moves have drawn strong criticism from business communities on both China and the EU. 

“The EU finds itself in a state of deep anxiety upon realizing it is falling behind in nearly all high-tech sectors. European politicians have erected higher barriers and pressing ahead with protectionism targeting China which they assume could earn time and space for local companies,” Cui said. 

However, the attempt to build and manage global industrial chains through an alliance-based mindset is bound to fail, the analyst said, while warning that the move could backfire as the mindset of establishing small clique goes against the tide of the times and it would ultimately hamper EU companies’ competitiveness.

China has long opposed such small cliques. In response to a question that the US, Japan and the EU will announce plans to lay the groundwork for a critical minerals trade agreement, China’s Foreign Ministry spokesperson Guo Jiakun said that China opposes any country using “small clique” rules to undermine the international economic and trade order.

“Maintaining an open, inclusive, and mutually beneficial international trade environment serves the common interests of all countries. All parties should fulfill their responsibilities by playing a constructive role in ensuring the stability and security of global critical minerals supply chains,” Guo said.