EU economic security plan fails to find favor among skeptical bloc members: China Daily editorial

As a Chinese Foreign Ministry spokesman stressed earlier this week, it is in the interest of both China and the European Union to properly handle their differences through dialogue and consultation on the basis of mutual respect. To that end, it is not conducive for the EU to take protectionist moves citing unfounded security concerns.

When European Commission President Ursula von der Leyen unveiled the Economic Security Strategy in June last year as part of the plan to bolster the EU's economic security through "de-risking" from "countries of concern", she wouldn't have expected the initiative would turn out to be a political hot potato more than one year later. Yet that is what it has become, as the majority of the bloc's member states are questioning the policy's viability.

The strategy, though it does not mention China, is widely believed to be part of Von der Leyen's efforts to align the bloc more closely with the United States and reduce economic reliance on China, which she considers a "systemic rival". The strategy proposes to further restrict foreign investment in the EU's key infrastructure and apply coordinated controls on exports to "rivals" of technologies in high-tech sectors such as semiconductors and artificial intelligence, among other measures aimed at strengthening the EU's economic security.

It could take up to three years for the strategy to come into force. Yet given the huge negative impacts the strategy is likely to have on trade and investment, as well as on research and innovation, the proposed policy is quite unpopular among national governments, with only one of the EU's 27 member states — Lithuania — having expressed full support for plans to screen outbound investments, according to reports citing diplomatic sources.

Such a policy is also opposed by various industry bodies. It would "be a major interference in entrepreneurial decisions and international investment flows", the Federation of German Industries reportedly said in a written submission to the commission's consultation, adding that it "rejects any new mechanisms to control foreign direct investment".

Likewise, a submission from SEMI Europe, the industry association representing the global electronics manufacturing and design supply chain, said that "the introduction of state controls on European companies' outbound investments is not the right policy path to achieve economic security since it would constitute a major interference within the realm of companies' business decisions and international investment flows".

The US initiated its own mechanism last year to restrict US investment in China in such high-tech sectors as computer chips and artificial intelligence. By trying to toe the US' anti-China line on the economic and high-tech front, the EU risks causing more damage to the rules-based international economic order and accelerating the trend of de-globalization, which runs counter to its own economic interest.

The EU has taken a series of protectionist measures in recent months targeting Chinese electric vehicles and solar panel makers. This, in addition to the overstretching of the concept of economic security, will only serve to further shake the confidence of companies from China and other countries in Europe's business environment.

Despite the talk of "decoupling" or "de-risking", China-EU trade has kept its growth momentum in recent years due to their economic complementarity. China and the EU are both important segments of the global industry and supply chains, and together serve as a staunch force promoting an open world economy. China has never posed any economic security risks to the EU; instead, the country has always remained a trustworthy trading partner of the bloc.

As for the differences that exist between them, the two sides should engage in dialogue rather than confrontation. The EU should abide by the basic norms of a market economy, and embrace free trade and fair competition, so as to avoid further compromising the mutually beneficial trade and economic cooperation between the two sides.