The lack of transatlantic reference in European Commission President Ursula von der Leyen’s speech on China should be seen through the prism of the EU´s interest in the developing world, writes Janne Leino.

Right in time, before visiting China with President Macron, European Commission President Ursula von der Leyen outlined her view of future EU-China relations. In a speech on 30 March, she charted Europe´s response to a more assertive China. In her speech, President von der Leyen did not mention the US nor the transatlantic relation.

While the primary target of the speech might have been the decision-makers in Beijing, her argumentation illustrates how the European Union currently would like to see itself, namely as an independent actor that offers cooperation options to countries that do not want to (openly) choose between Washington or Beijing.

According to von der Leyen, the EU needs to change its approach to China, which is “becoming more repressive at home and more assertive abroad”. As China moves away from the opening-up and reform policies towards a state driven by security and control concerns, Europe must adjust its approach.

The new buzzword when it comes to managing China relations is de-risking. De-risking sounds more diplomatic than “decoupling”, which became widely used under the Trump administration.

The message to Beijing, Washington and the rest of the world: Europe is open for business, but not at any cost.

In her speech, Ursula von der Leyen presented an “economic de-risking strategy” built on several pillars. The first pillar is focused on increasing European competitiveness and resilience in future technologies that enable a green and digital transition for the continent.

The EU´s net-zero-act, widely seen as a response to the US´ Inflation Reduction Act, aims to bring home clean tech production to Europe. It states that 40% of future technologies should be manufactured in Europe and paves the way for national and European-level subsidies into these sectors.

Secondly, de-risking, learning from Japan´s experiences with China, should include greater autonomy regarding critical raw materials. Expect increased European interest in mineral-rich African, Latin American and South East Asian countries, utilising instruments like the very-much-hyped-but-not-really-known Global Gateway initiative.

The second and third pillars of the EU´s “de-risking strategy” cover the development of new and better usage of old defensive trade tools. The EU should better use the existing export control, foreign direct investment (FDI) screening and foreign subsidy instruments.

Take the example of FDI screenings: In 2021, not even all EU countries had FDI screenings in place, and even if they were in place, the EU has no legal power to block investments.

Regarding new defensive tools, the Commission President announced that the EU is working on a tool that could focus on outbound investments, meaning investments from Europe to “systemic rivals” like China.

Without naming them, the suggestion is a combination of the US Foreign Investment Risk Review Modernization Act (FIRRMA) and the bipartisan proposal of a National Critical Capabilities Defence Act (NCCDA).

Lastly, the EU would like to cooperate closely with global partners, naming the G7, the G20, and ASEAN members (…), again without explicitly naming the US. This alignment with partners should be flanked with trade agreements with countries like New Zealand, Australia, India and members of ASEAN and MERCOSUR.

According to von der Leyen, Green alliances, like with Japan and the trade and technology council (TTC) with India, are good examples of European partnerships. The EU-US Technology Council, which precedes the EU-India TTC and is used as an alignment between the EU and the US, was conveniently not mentioned.

The gloves are clearly off as Presidents Macron and von der Leyen head to Beijing to manage the relationship with China.

The EU stands firmly by Ukraine, sees critically the Russia-China friendship and stands for the UN Charta and human rights, also when it comes to Xinjiang.

Nevertheless, the EU seems unwilling to align itself openly with one of its closest partners, the United States.

This silence on the US should be seen through the prism of the European Union´s interest in the developing world.

The EU needs the developing world to reach strategic autonomy and for its digital and green transformation. And just like the EU, most of the developing world is unwilling to clearly choose a side between the USA and China.