Europe is Rethinking Its Ties To China

Russia’s invasion of Ukraine—and China’s support of Putin despite it—have caused European leaders to reevaluate economic ties to China.

• For long, it was practically a mantra among EU leaders that world peace could be secured through increased trade and economic interdependence with autocracies like China and Russia.
• Russia’s move to invade Ukraine has now shaken that belief. Germany in particular had bet that maintaining strong trade links with Putin’s regime would reign in his expansionist ambitions.
• This proved wrong, and the EU is now beginning to apply the lesson learned to its greatest trading partner—China, whose authoritarian leaders have supported the Kremlin despite the Ukraine invasion.
• Already, frayed EU-China relations—and a pivot away from China—were evident last week, when on his first trip to Asia as German chancellor, Olaf Schoz visited Tokyo instead of Beijing.
• The message seemed clear: Germany, and the EU, were looking to diversify economic ties with the aim of preventing over-reliance on an authoritarian regime in China.
• That doesn’t mean China will stop being the EU’s main trade partner overnight. But a shift appears underway, and already some investments by European companies in China are now on hold.