EU labels China a long-term strategic threat over trade leverage

EU foreign ministers have formally labelled China a "critical long-term strategic challenge", citing Beijing's willingness to weaponise its economic dominance to become the world’s leading power. The joint assessment marks a significant hardening of the bloc’s posture towards its largest trading partner ahead of an October deadline to rebalance commercial ties through dialogue.

The immediate concern for European industry is Chinese overcapacity, which ministers warned threatens entire sectors of the continent's economy. However, every attempt by Brussels to shield its market has triggered threats of retaliation from Beijing.

This leverage stems largely from China’s monopoly over rare earth supplies, materials essential for Europe's defence industry and green technologies. Europe already experienced the risks of this dependency last year when it became collateral damage in the US-China trade war. Beijing restricted global rare earth exports, jeopardising key industrial value chains across the continent.

“China’s asymmetric advantages with the EU, from trade imbalances to critical raw materials to technological advances in some areas, along with its willingness to use this as leverage against the EU and others in pursuit of its ambition of becoming the world’s leading power makes China a critical long-term strategic challenge,” the ministers stated.

Beyond immediate trade frictions, the assessment connects Beijing’s economic might to broader security vulnerabilities. Ministers noted that China’s growing assertiveness and technological competition with the US will increasingly damage the bloc’s competitiveness and economic resilience.

This security threat is compounded by Beijing's role in the war in Ukraine, with the document describing China as a "key enabler" of Russia's invasion. In April, the EU targeted several Chinese firms with sanctions under its 21st sanctions package, despite Beijing's denials of involvement.

Ministers warned that China and Russia share a goal to "establish regional dominance and reshape the global order in line with their interests, fostering a return to a sphere-of-influence logic." The assessment concludes that "the deepening China-Russia strategic partnership" will link security theatres from Europe to the Indo-Pacific, amplifying the strategic pressures facing European businesses and policymakers.