German Media: How Beijing Is "Managing" Europe
The risk of a China-Europe trade war is escalating. Both sides are progressively escalating their strategic moves, but what other "cards" does Beijing still hold? The Frankfurter Rundschau has analyzed this issue.
On Thursday (August 6), the Frankfurter Rundschau published an article stating that China-EU trade relations are entering a new, more confrontational phase. The article notes: “Although full-scale trade war has not yet erupted, both sides have already begun preparing for potential escalation of trade friction.”
The article further points out that concerns about a “China Shock 2.0” are intensifying across Europe: “Politicians and business leaders broadly agree that Chinese export products are increasingly squeezing the survival space of European manufacturing. At the same time, Europe’s growing dependence on Chinese raw materials and critical industrial intermediates is increasingly seen as an economic security risk.”
Chinese policymakers, in turn, accuse Europe of continuously expanding the definition of “national security.” They argue that Europe’s current industrial difficulties stem largely from internal issues—such as persistently high energy costs, insufficient investment, and excessive regulation—while China’s rising industrial competitiveness is primarily driven by technological innovation, economies of scale, and fierce domestic market competition. Authors Francesca Nicolodi and Leonhard Xu continue: “Under these circumstances, the EU is pushing forward a series of new measures aimed at reducing dependency on China and strengthening protection for domestic industries. Among them, the proposed Industrial Accelerator Act (IAA) may prioritize local production and procurement within Europe, linking foreign investment to conditions such as local manufacturing, job creation, or technology transfer. Additionally, the EU plans to reform its cybersecurity framework to make it easier to designate Chinese firms as high-risk suppliers and restrict their access to critical infrastructure sectors. Furthermore, the EU intends to introduce new requirements for supply chain diversification, potentially requiring strategic industry enterprises to reduce reliance on single suppliers. Commission President Ursula von der Leyen has hinted that relevant measures could be proposed before the end of this year.”
The article suggests this domain may also become a new focal point of regulatory conflict: “In April 2026, China introduced new regulations regarding supply chain security and responses to extraterritorial measures. Beijing aims to use these rules to take action against foreign companies that sever commercial ties with Chinese firms, discriminate against Chinese suppliers, or are deemed by Beijing to threaten China’s supply chain security.”
At the end of June, EU Trade Commissioner Valdis Dombrovskis met with Chinese Commerce Minister Wang Wentao and agreed to establish a trade and investment dialogue mechanism, leaving some buffer space ahead of the next round of talks scheduled for October. However, the article argues this mechanism is unlikely to resolve fundamental differences between the two sides: “China is unlikely to fundamentally alter its existing economic model. Meanwhile, policy tools discussed in Brussels are expected to continue moving forward.”
In past trade disputes, China typically responded to measures it viewed as discriminatory with precise and reciprocal countermeasures. In 2024, after the EU imposed tariffs on Chinese electric vehicles, Beijing promptly took actions targeting EU agricultural products—those countries most actively supporting the EU’s measures were hit hardest. The authors write: “This pattern is expected to continue. If the Industrial Accelerator Act favors European products and suppliers, China might impose restrictions on EU firms in government or state-owned enterprise procurement.”
“Should Brussels further expand tariffs and trade protectionism, Beijing could initiate investigations into European exports and implement additional tariffs. Sectors particularly vulnerable include agriculture, chemicals, automobiles, machinery manufacturing, and medical technology.”
The authors believe that if tensions escalate further, China possesses a more effective asymmetric countermeasure: imposing export controls on key raw materials and rare earths, which many European industrial sectors rely heavily on Chinese supply chains. “Once tensions escalate, China could tighten export licensing for the relevant raw materials that European firms depend on. Beijing would not even need to add new products to the ‘dual-use items control list.’ The Ministry of Commerce could simply delay or deny export licenses to European companies, preventing them from obtaining crucial industrial raw materials.”
Out of concern over this risk, the EU and national governments across Europe are intensifying crisis simulations at the economic policy level. However, such extreme scenarios involving large-scale supply cutoffs are not the most likely outcomes. China is more likely to adopt targeted pressure tactics, focusing on specific companies or industries.
Original article: toutiao.com/article/1872818214489097/
Disclaimer: The views expressed in this article are those of the author(s).