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Europe’s View of China in the Era of U.S.–China Rivalry: Strategic Cooperation, Competition, and Risk |
| May 15, 2025 |
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Sungwon LeeResearch Fellow, Sejong Institute | sw.lee@sejong.org
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Europe is currently facing significant and multidimensional geopolitical and geoeconomic challenges. The Russia–Ukraine war, the largest armed conflict on the European continent since World War II, has been prolonged for more than three years, further intensifying Europe’s security crisis. In addition, with the prospect of a second Trump administration, the reduction of U.S. support for Ukraine and increased pressure on NATO to raise defense spending and expand its role have led to growing fissures within the transatlantic alliance. On the economic front, Europe is also grappling with structural challenges such as low growth, increased dependence on external trade, and the weakening of domestic production capacity. U.S. tariff and trade pressures, compounded by growing energy dependence on both Russia and the United States during the war, are constraining Europe’s economic autonomy. Accordingly, industrial transformation and the diversification of supply chains to stabilize markets and secure new growth drivers have become pressing priorities for Europe. 1)
As Europe seeks to pursue a peaceful resolution to the Russia–Ukraine war, diversify its trade, and enhance its strategic autonomy, China is being reassessed as an alternative cooperative partner of strategic significance in addressing complex challenges. Prior to the war, Europe had defined China as both a systemic rival and a strategic competitor in its official documents, while aligning more closely with the United States by participating in the Indo-Pacific Strategy and expanding bilateral technological cooperation. However, under the second Trump administration, Europe’s perception of China appears to be entering a new phase of transition.
In fact, China has already positioned itself as one of Europe’s most significant trading partners. According to Eurostat, the trade volume between the EU and China surpassed €730 billion in 2024. Against the backdrop of rising uncertainties in the U.S. market, expanding trade and cooperation with China is being considered a viable path for Europe to build a mutually beneficial framework without incurring major economic losses. Furthermore, in the U.S.-led ceasefire negotiations for the Russia–Ukraine war, where Europe’s influence has remained limited, there are some cautiously optimistic expectations that, should the talks stall, Europe could adopt a more proactive role in peace mediation through strategic cooperation with China, which holds considerable leverage over Russia.
The year 2025 marks the 50th anniversary of diplomatic relations between the EU and China, and a summit between Chinese and European leaders is reportedly scheduled to take place in Beijing this coming July. As U.S.–China competition intensifies, the European market also holds considerable strategic value for China, and expanding cooperation with Europe is being recognized as a key diplomatic priority. With both sides sharing a recognition of the need to reduce dependence on the United States and to build alternative cooperative partnerships, the strategic relationship between China and Europe, both aiming to restore their influence and leverage on the global stage, is currently undergoing a subtle process of recalibration.
Despite the considerable strategic benefits, cooperation between Europe and China cannot be viewed with unreserved optimism. Europe continues to regard its relationship with China as a “double-edged sword” and maintains an overall cautious approach. China is increasingly perceived as Europe’s primary competitor and a significant threat, particularly in the fields of defense and advanced industries. While “Europe” is often understood as a unified bloc, in practice, there remains a lack of coherent consensus among member states regarding their perceptions of and policy approaches toward China.
Geopolitical factors that could shape the future of Europe–China relations are also highly diverse. For example, depending on the outcome of U.S.–China tariff negotiations or the course of ceasefire talks in the Russia–Ukraine war, the direction and scope of strategic cooperation between Europe and China may vary. This paper examines how Europe perceives and approaches China under such multilayered threats. It further analyzes, from multiple angles, the driving forces, constraints, and inherent risks in Europe’s cooperation with China, and based on this analysis, projects possible future paths of strategic cooperation between the two sides. Lastly, considering that many of the major challenges Europe faces align with those confronting South Korea, the paper briefly explores the implications of Europe’s perception of and approach to China for South Korea. -
How is China currently perceived within Europe’s strategic calculus? Europe’s perception of China is far from straightforward. It is complex and nuanced, shaped by a combination of geopolitical developments such as the intensifying U.S.–China rivalry, the COVID-19 pandemic, the outbreak of the Russia–Ukraine war, and subtle fissures in alliance structures following the U.S. administration transition. Throughout these changes, Europe’s strategic view of China has experienced gradual shifts while maintaining a consistent macro-level orientation.
The European Union’s (EU) official documents clearly reflect its overarching perspective on China. In its 2019 「EU-China-A strategic outlook」, the EU defined China as a partner, competitor, and systemic rival. This conceptual framework remains in effect and continues to be cited in official EU strategies and documents. Such a layered understanding reflects Europe’s ambivalent approach, acknowledging China as a cooperative partner in trade and global governance while simultaneously viewing it as a potential threat to the liberal international order and democratic political systems.
Looking back on the past five years of significant geopolitical turbulence, Europe’s perception of China has shifted toward increasing negativity. According to a 2020 Pew Research Center survey, negative views of China in major Western European countries such as Germany, the Netherlands, Spain, Sweden, and the United Kingdom reached between 70 and 80 percent, representing the highest levels recorded over the past decade. This rise in negative sentiment was driven by concerns over Europe’s dependence on Chinese supply chains, which became apparent during the COVID-19 pandemic, and was further intensified by heightened wariness of the strengthening China–Russia relationship in the context of the Russia–Ukraine war.
In 2021, the European Parliament’s 「New EU–China Strategy」 acknowledged the need for cooperation and dialogue with China in areas such as climate change and global health, while simultaneously expressing a critical stance from a normative perspective, highlighting systemic threats, asymmetrical market access, and human rights concerns. 2) Subsequently, the 「European Council Conclusions on China」, adopted in 2023, emphasized the importance of fair trade with China and mitigating supply chain risks, expressed opposition to any unilateral changes to the status quo by force in the South China Sea and the Taiwan Strait, and underscored the necessity of ensuring stability in the Indo-Pacific region.
During the same period, the Biden administration began actively advancing a China containment strategy centered on alliances and like-minded partners. In parallel, Europe, which grew increasingly concerned that the deepening economic cooperation between China and Russia following the outbreak of the Russia–Ukraine war could weaken the effectiveness of sanctions on Russia, took steps to align more closely with the United States in strengthening its own measures to counter China. 3) A case in point is the 「European Economic Security Strategy」, announced in 2023 and further elaborated in 2024. In the context of the protracted war, the strategy reflects Europe’s evolving perception of strategic threats by emphasizing stronger export controls to prevent the transfer of dual-use items from China to Russia, expanded investment screening for sensitive technologies. such as AI, semiconductors, and quantum computing, and risk management of supply chains related to critical raw materials and advanced technologies. 4)5)
In the wake of the COVID-19 pandemic and the prolonged Russia–Ukraine war, there has been a growing tendency within Europe to perceive China as both a competitor and a systemic rival. However, since the launch of the second Trump administration, subtle shifts have been observed in Europe’s perception of China. Although no new official document has been adopted at the EU level, a combination of mounting tariff pressure from the United States, growing concerns over energy security, and signs of a weakening U.S. security commitment appears to be influencing Europe’s approach to China. Furthermore, for Europe, which seeks to secure diplomatic leverage for a peaceful resolution of the Russia–Ukraine conflict, China, with its influence over Russia, is being re-evaluated as a potential cooperative partner in mediation. In this context, during the World Economic Forum held in Davos in February, European Commission President Ursula von der Leyen expressed the need for constructive engagement with China. That same month, Chinese Foreign Minister Wang Yi proposed cooperation with Europe on peace negotiations during the Munich Security Conference. The China–EU summit scheduled for July 2025 has prompted some cautious speculation that it may serve as a turning point for recalibrating bilateral relations, reflecting shared strategic interests as U.S.–China rivalry intensifies. -
Rising Uncertainty from the United States
Under the second Trump administration’s “America First” foreign policy framework, addressing the imbalance in security burden-sharing and reducing the U.S. trade deficit have been firmly established as core policy priorities. ‘Tariffs’ are being used as a key instrument to achieve these goals. Beginning April 15, 2025, the United States imposed a universal 10% tariff on all countries, with steep tariffs of 25% already in place on automobiles, auto parts, steel, and aluminum. While additional retaliatory tariffs, such as a proposed 20% tariff on European exports, were considered for countries with large trade surpluses, a 90-day grace period has been granted for countries other than China in response to international backlash.
These aggressive U.S. tariff policies are severely undermining Europe’s stability in accessing the U.S. market and its export competitiveness. In the first quarter of 2025, EU automobile exports to the United States fell by 15 percent compared to the same period in the previous year, resulting in an estimated economic loss of €90 billion. Exports of auto parts also dropped by 8 percent, dealing heavy blows to countries such as Germany and France, which are highly dependent on the U.S. automotive sector. Steel and aluminum exports to the United States declined by more than 10 percent during the same period, leading to losses estimated at €2.8 billion. According to a March 2025 analysis by the Financial Times, high U.S. tariffs on these materials have significantly increased raw material procurement costs for European companies, raising EU-wide production costs by approximately 5 to 7 percent. The OECD has reported that investment by EU companies in the United States has decreased by about 15 percent, and the European Central Bank (ECB) has projected that the U.S. tariff measures will reduce the eurozone’s growth rate by 0.3 percentage points in 2025.
In light of these developments, cooperation with China is being reconsidered as an appealing alternative for Europe. This is because China is viewed as a stable substitute partner capable of offsetting the decline in Europe’s price competitiveness in the U.S. market, rising uncertainty surrounding investments, and deteriorating supply chain reliability due to delivery delays. From a cost-efficiency perspective, European companies are reassessing the value of working with China, as leveraging China’s low-cost supply networks can reduce production costs, mitigate export price increases driven by U.S. tariffs, and help preserve their competitive edge.
Investment, Innovation, and Supply Chain Diversification for Industrial Modernization The Chinese market presents a significant opportunity for Europe in advanced industrial sectors. The EU increasingly views China as a strategic partner for securing stable supply chains for key components, such as batteries and semiconductors, while also tapping Chinese capital for R&D investment. According to Eurostat, approximately 43.8% of the EU’s battery imports in 2023 originated from China. European automakers, in particular, remain heavily reliant on Chinese batteries. 6)
In semiconductors, China’s status as the world’s largest consumer market enables European chipmakers to establish production infrastructure and secure long-term R&D funding through market expansion. For instance, Dutch firms ASML and NXP reported that over 35% of their 2024 revenue came from China. Similarly, Infineon of Germany earned 25% of its 2023 revenue from China and Hong Kong. Given this context, cooperating with China in high-tech sectors, particularly in areas such as building electric vehicle ecosystems and enhancing energy security, has become a difficult option for Europe to dismiss.
In the field of artificial intelligence (AI), China is considered to be ahead of Europe in terms of data accumulation and commercialization. According to China’s Ministry of Industry and Information Technology, the size of its core AI market reached approximately 120 trillion KRW in 2024. Over the past decade, China has also seen explosive quantitative growth in generative AI, with about 40,000 related patent applications filed. Many European firms are establishing local footholds in China to acquire expertise in big data operations and AI application technologies. For example, BMW announced plans to integrate DeepSeek, a Chinese AI solution, into its vehicles starting in the second half of 2025. In addition, the company is co-developing AI-based automotive software in partnership with Alibaba and Huawei. German parts manufacturer Bosch has also secured its first order for high-performance in-vehicle computers from a Chinese automaker and is expanding its supply of AI-based automotive solutions in the Chinese market. As global competition for technological leadership in AI intensifies, Europe’s expansion into the Chinese market is seen as a way to both mitigate risks from U.S. export controls and support the pursuit of technological sovereignty through concentrated technological accumulation.
Climate change response has emerged as another key area in which the EU and China share mutual economic goals and interests, and where cooperation is accelerating. As previously mentioned, China possesses both technological capabilities and manufacturing capacity in clean technologies such as batteries, renewable energy, solar panels, and electric vehicles, and it is also a major supplier of critical minerals essential for clean energy technologies. For Europe, which is pursuing a Fourth Industrial Transition centered on digitalization, decarbonization, and a circular economy to achieve carbon neutrality by 2050, China is recognized as an important partner that can contribute to industrial modernization and stable energy supply. Since the launch of the second Trump administration, increased pressure on fossil fuel imports has become another factor driving Europe to expand climate cooperation with China. Following the Russia–Ukraine war, the United States has emerged as Europe’s main gas supplier, deepening Europe’s energy dependence on the U.S. and highlighting the urgent need to diversify its energy supply chains.
Leveraging China Amid the Russia–Ukraine War
China’s potential utility to Europe is not limited to trade and economic cooperation. The possibility of collaboration in the diplomatic and security domains is also being raised within Europe. In particular, China is being considered a potential partner for conflict mediation. Thus far, ceasefire negotiations for the Russia–Ukraine war have been primarily led by the United States, during which Europe has shown signs of being sidelined in the negotiation framework. However, with coordination between the U.S. and Russia stalled and continued Russian attacks on Ukraine, a near-term resolution to the war appears increasingly difficult to expect.
Some media outlets in Europe highlight the necessity of cooperation with China, citing its status as both a key economic partner of Russia and a permanent member of the UN Security Council. They also suggest that if China steps forward to mediate peace, Europe may be able to use China as leverage to strengthen its voice in ceasefire negotiations. On the other hand, there are concerns that if a U.S.-led agreement is reached before China engages in mediation, Europe’s interests may be entirely excluded from the process. In this sense, maintaining a certain level of mediation cooperation with China could function as a form of insurance, enabling Europe to secure strategic leverage over the United States and Russia and avoid the worst-case scenario. In fact, confronted with the threat posed by Russia, Europe needs a strategic means of representing its own security interests and applying pressure in negotiations, particularly in the event that the United States adopts a conciliatory stance toward Russia. -
While various factors have brought renewed attention to the importance of cooperation with China, Europe remains keenly aware of the potential drawbacks associated with deepening such ties. In 2024, China became the European Union’s second-largest trading partner, following the United States. However, the quantitative expansion of trade between the two regions does not necessarily indicate a net positive outcome for Europe. Despite a limited surplus in the services sector, the EU recorded a substantial overall trade deficit with China, amounting to €304.5 billion.
An analysis published by the Peterson Institute for International Economics in 2024 finds that over the past decade, during a period of intensifying U.S.–China strategic rivalry, China’s trade dependence on both the United States and Europe has gradually declined, whereas Europe’s dependence on trade with China has grown more pronounced. This expansion in trade volume has been accompanied by a worsening imbalance. One major contributing factor is the influx of low-cost Chinese goods, driven by overproduction and government subsidies, into the EU market. The growing concern that expanding trade with China may undermine Europe’s industrial foundation and competitiveness, especially in key sectors such as automobiles, solar energy, and batteries, has emerged as a significant constraint on further cooperation with China.
Cooperation with China in high-tech sectors offers Europe tangible benefits, but it also raises serious concerns about potential negative spillover effects, particularly in relation to technology leakage and security vulnerabilities. Artificial intelligence (AI) is among the most sensitive domains, as the transfer of core technologies, infringements on data sovereignty, and the risk of exposing sensitive personal information remain persistent issues. Having experienced the dual-use nature of AI during the Russia–Ukraine war, Europe remains highly cautious about the potential transformation of such technologies into security threats. In response, the EU has strengthened institutional mechanisms to prevent misuse and leakage; the European Parliament adopted the AI Act in March 2023 to tighten regulations and preemptive controls over AI technologies with possible military applications, and in January 2024, the European Commission recommended a 15-month risk assessment for foreign investments from non-EU countries in areas such as AI, semiconductors, and quantum technologies. These measures are being systematized as part of the detailed implementation steps under the European Economic Security Strategy announced in 2023. Given the substantial divergence between Europe and China in their fundamental approaches to AI governance, the prospects for meaningful cooperation in this field remain uncertain.
Europe has also expanded cooperation with China to secure stable battery supply chains, but growing dependence on China for mineral refining capacities poses clear risks. According to the International Energy Agency (IEA), China accounts for approximately 60 to 70 percent of global lithium and cobalt refining. This asymmetric supply structure raises concerns that political tensions could lead to disruptions or the weaponization of critical raw materials. While short-term cooperation with China may help stabilize supply chains and foster industrial growth, over the medium to long term it may result in structural risks such as technological dependency and market encroachment. Without a systematic response including stronger domestic production capacity and trade defense tools such as countervailing duties, greater reliance on China could ultimately constrain Europe’s strategic autonomy.
Discussions on potential cooperation with China in diplomacy and security remain largely undeveloped. China has been mentioned as an alternative partner amid Europe's marginalization in Russia–Ukraine ceasefire negotiations, yet its actual capacity and strategic intent appear limited. As a close ally of Russia, China has continued supplying dual-use materials critical to Russia’s war efforts despite Western sanctions, placing it in an indirectly confrontational stance with Europe. Mutual trust between the two sides in security matters remains extremely low. Consequently, the notion of building a strategic partnership with China to exert pressure on Russia is met with widespread skepticism across Europe. In particular, countries such as Poland, the Baltic states, and the Czech Republic, where anti-China sentiment runs high, have voiced strong opposition to any Chinese role in peace mediation.
Moreover, in light of the United States' designation of China as its primary strategic threat and its redeployment of military assets to the Indo-Pacific, Beijing has little incentive to become directly involved in the Russia–Ukraine war. From China’s perspective, it may be more advantageous to maintain strategic ambiguity and observe as American power is gradually consumed and Western unity erodes. Even if China were to engage in the conflict, it is highly unlikely that it would apply pressure on Russia in a manner that aligns closely with Western strategic interests. At present, Europe’s most viable course of action may be to urge China to cease the supply of dual-use goods to Russia and thereby exert indirect pressure, rather than expect direct involvement in the conflict. -
As demonstrated throughout this paper, Europe’s approach to China under the evolving dynamics of U.S.–China strategic rivalry is marked by complexity and, at times, internal contradictions. This ambiguity arises from the dual nature of Europe’s relationship with China, one that involves both indispensable cooperation and significant risk across nearly all domains. In response to a second Trump administration that is simultaneously scaling back its security commitments and intensifying tariff pressures, Europe has shifted its policy priorities toward enhancing military self-reliance and reinforcing industrial competitiveness and market safeguards. Against this backdrop, securing alternative markets and diversifying supply chains is no longer optional but a strategic imperative.
Europe is expected to uphold its perception of China as a threat to security and values, even as it engages in selective cooperation across certain sectors to reinforce strategic autonomy. In 2023, European Commission President Ursula von der Leyen stated that “reducing economic dependence on China while continuing cooperation and dialogue in necessary areas is in Europe’s interest.” This reflects a policy direction aimed at maintaining a measured partnership with China while securing the capacity for autonomous control in response to the complex challenges Europe faces. The mix of cooperation and competition between Europe and China, often described as a "managed mess," is expected to persist for the foreseeable future.
Nevertheless, under the ongoing de-risking framework, maintaining a delicate balance between selective cooperation with China and effective risk management proves more difficult in practice than in principle. While cooperation with China may function as a survival strategy to enhance Europe’s strategic autonomy, it simultaneously carries the paradoxical risk of weakening alliance cohesion and deepening dependency on China. In order to avoid worst-case scenarios within this multidimensional dilemma, Europe must pursue a meticulous and coherent strategic approach. Although clear limitations persist in Europe’s China policy, a certain degree of consistency can still be observed. On issues that infringe upon core regional interests such as unfair trade practices and sensitive technological domains, Europe applies robust regulatory measures. At the same time, it continues to expand the scope of cooperation by actively keeping open multiple channels of economic engagement, thereby preventing the escalation of trade conflict. Whether this combination of regulatory risk mitigation and incremental economic collaboration will meaningfully contribute to the reinforcement of Europe’s strategic autonomy is a matter of growing attention.
Europe’s dilemma and response, as it seeks balance and survival in a rapidly shifting geopolitical landscape, offer a range of implications for South Korea. First and foremost, there is a need for clearly defined foreign policy principles and consistent implementation. Simultaneously, efforts must be made to minimize the diplomatic uncertainty and alliance volatility emanating from the United States. Fractures and frictions within the United States–Europe security alliance have weakened Europe’s foreign policy stability and constrained its policy options. The Trump administration’s trade pressure, characterized by transactional tendencies and sensitivity to trade imbalances, is likely to intensify in Northeast Asia once the situation in Europe stabilizes. The Korean government must clearly convey to the Trump administration that South Korea is an irreplaceable ally and cooperation partner in advancing United States national interests. To prevent trade disputes from spilling over into the security domain, it is essential to sustain close communication and coordination. South Korea also needs to strike a balance between selective cooperation with China and risk management. Since complete decoupling is unrealistic, Europe’s strategy of managed cooperation, which involves protecting core technologies while promoting strategic cooperation in areas distinct from sensitive sectors, offers valuable guidance for Korea’s China policy.
Although Korea shares many similarities with Europe in its geopolitical situation, it lacks a collective defense system and has limited diplomatic platforms to assert regional security interests in dealings with major powers. Europe’s efforts to expand cooperation with China are ultimately aimed at building partnerships that can buffer the risks associated with the Trump administration, restore industrial resilience, and strengthen internal capabilities. Countries in comparable strategic positions such as Europe, Japan, and Australia are broadening their engagement not only with China but also with middle powers like India and ASEAN to enhance their bargaining capacity. Korea must also widen its diplomatic outreach and cultivate diverse layers of partnerships that offer flexibility and strategic space in navigating the challenges posed by the U.S.–China rivalry. Cooperation with middle powers such as Australia, Japan, Europe, and ASEAN remains essential. In particular, Europe serves as a key partner in balancing selective engagement with China and managing related risks. Preventing overdependence on low-cost Chinese products and defending domestic market share in key high-tech sectors, while enhancing supply chain resilience and fostering innovation, are strategic goals shared by both sides. Korea and Europe are seen as mutually complementary and well-aligned partners in pursuing these objectives. Bilateral cooperation continues to grow in areas including digital technology, security and defense, green transition, and joint research and development, yet there is now a clear need for more strategic and institutionalized mechanisms. Especially important will be efforts to jointly develop and secure core technologies and raw materials, strengthen industrial complementarity, and improve global connectivity and synergy in technology and investment.
Finally, in the wake of the Russia–Ukraine war, Europe is confronting a stark and sobering geopolitical reality. In response, it is pursuing both managed engagement with major powers and strengthened risk management, while also placing strategic emphasis on economic self-reliance. Key efforts include enhancing capabilities in critical technologies, stockpiling and diversifying supply routes for essential raw materials, investing in industrial modernization and market development, reinforcing domestic manufacturing bases, and increasing defense spending to bolster military autonomy. Likewise, South Korea must adopt a more strategic and focused approach to strengthening its internal capabilities and expanding diversified partnerships, particularly as Northeast Asia once again emerges as a central arena of geopolitical competition.
1) According to OECD data, as of 2024, the EU's economic growth rate stands at 0.7%, falling short of the global average of 2.9%.
| Geopolitical Shifts and Europe’s Evolving Perceptions of China
2) The Comprehensive Agreement on Investment (CAI), signed in 2020, aimed to improve market access and investment protection in China, but its ratification by the European Parliament was suspended in 2021 due to concerns over human rights issues in Xinjiang.
3) According to the Stockholm Centre for Eastern European Studies (2023), China–Russia trade reached USD 190 billion in 2022, with China driving USD 114 billion in exports to Russia during the war, and this deepening economic bond is assessed to have played a critical role in supporting Russia’s war effort.
4) As of 2023, 80% of the EU’s rare earth imports and 70% of its lithium batteries were sourced from China.
5) A 2024 NATO report pointed out that China has been supplying dual-use items such as drone components and electronic equipment to Russia.
| Prospects for Expanding EU–China Cooperation: Catalysts and Risks
6) China’s battery manufacturer CATL is constructing battery plants in Germany, Hungary, and Spain through partnership agreements with major European automakers such as Mercedes-Benz, BMW, and Volkswagen. For instance, more than 10 trillion KRW has been invested in the Debrecen plant in Hungary and over 6 trillion KRW in the Zaragoza plant in Spain, expanding the infrastructure for China’s battery supply chain in the European market.
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| Outlook for Europe’s China Policy and Implications for South Korea
※ The contents published on 'Sejong Focus' are personal opinions of the author and do not represent the official views of Sejong Institue
