Europe’s China Problem: How Not to Feed Beijing’s Military–Civil Fusion

Abstract

This essay explores the question of restricting China’s access to European dual-use technology. Under Xi Jinping, the Chinese Communist Party is transforming China into a techno-security state. The country’s innovation-driven development strategy and strengthened push for military–civil fusion, fuelled by powerful industrial policies, have made technology exchanges with China a challenging policy issue in Europe. The issue is not only a bilateral one with China – it constitutes a challenge for the management of the transatlantic alliance as well, given that US intervention has at times been a decisive factor shaping European policies vis-à-vis China, mostly through targeted action regarding specific issues of technology transfers. The European Union has developed a toolbox of defensive instruments in the past five years to address asymmetries and imbalances in EU–China trade and investment relations, providing European decision-makers with the instruments to manage technology transfers to China. This toolbox still needs to be perfected, however. The EU is only now starting to develop a political narrative linking China’s military build-up, its powerful industrial and innovation policies, and Xi’s vision for Chinese leadership in world affairs. In the absence of a shared European vision, technology transfers will remain a sporadic irritant in transatlantic relations.