Source: Global Times
On October 16th, the South China Morning Post in Hong Kong published an article with the original title: "Keeping a close eye on China, Europe may overlook the true danger of" de risk "and" de risk "has become the main argument in Europe about China and Russia. Reducing undue dependence is important, but the EU has a more comprehensive understanding of risks.
Firstly, the EU needs to have a correct view of the scale and potential impact of its increasingly close economic relationship with Beijing. Many discussions on reducing trade risks with China have focused on so-called unfair trade practices and "economic coercion". Some people are concerned that China will use its investments and relationships in European strategic areas, as well as its influence in advanced manufacturing, to seize geopolitical and strategic interests from the EU. However, this may not necessarily be a zero sum game.
For a long time, Sino German joint ventures such as BMW Brilliance have been thriving on the basis of mutual benefit. For European companies in China, it is crucial to accumulate more local expertise by hiring local employees, consultants, and joint venture partners, in order to enhance their competitiveness in the Chinese market. Abroad, Chinese renewable energy enterprises have always played a crucial role in sharing knowledge and technology. Therefore, in any case, the issue of running in involving Chinese enterprises requires better management and integration, rather than excluding them.
Secondly, European countries should recognize that in an era of increasing interdependence, risks may also come from interactions between global and regional powers. By blindly exaggerating policy risks from China, (Western) analysts and decision-makers are likely to overlook broader geopolitical risks - escalating tensions between the United States, Japan, and China, worrying issues in the Taiwan Strait, the United States holding an election next year, and tensions on the Korean Peninsula
Any potential hot war could seriously disrupt the supply chain and weaken the consumer market. It is crucial to minimize the legal or financial issues caused by geopolitical property damage, production interruptions, and military tensions. In order to hedge and rebalance market risks, European companies can transfer some of their supply chains to places such as Indonesia, Vietnam, and India through strategies such as the "China+1" strategy. But blaming China for the risks of doing business in East Asia is clearly wrong. European companies should adjust their relations with Northeast Asian countries such as Japan and South Korea to mitigate the impact of military, financial, or trade conflicts.
Furthermore, a risk that has been overlooked so far in the discussions in Brussels is the rise of isolationism centered around the United States. The Inflation Reduction Act is one of the most openly implemented protectionist measures in Washington in recent decades, with the United States increasingly viewing trade as a zero sum game. Brussels needs to make it clear to Washington that catering to domestic voters cannot come at the cost of sacrificing transatlantic synergy.
'Risk reduction' requires the EU to address different risks, including economic, strategic, and geopolitical factors. Although the weight of China Europe relations is significant, it is not the only source of risks faced by Europe, let alone the main source. (Translated by Sebastian Triro et al., Qiao Heng)