In March 2019, the European Commission published a document that broke with several years of careful diplomatic language.

China, it said, was simultaneously a cooperation partner, a negotiating partner, an economic competitor, and a systemic rival. All four at the same time. The formulation was not diplomatic ambiguity — it was an attempt to capture a genuine complexity that simpler frameworks could not contain.

That four-part description has aged both well and badly. Well, because the tensions it identified have deepened. Badly, because Europe's actual behaviour has struggled to keep pace with the diagnosis.

China is the European Union's largest trading partner for goods. Bilateral trade in goods was worth roughly €740 billion in 2023. European companies have significant manufacturing and sales operations in China. German automakers sell more cars in China than in Germany. LVMH, Airbus, BASF, Volkswagen, Siemens — the list of major European companies with deep Chinese market exposure is long and consequential.

This is not a peripheral relationship that Europe could disentangle without cost. It is a core part of the business model of some of Europe's most important industrial companies.

The entanglement runs the other way too. Chinese investment in European infrastructure, ports, and technology companies accelerated through the 2010s. The port of Piraeus in Greece is operated by COSCO, a Chinese state company. Chinese firms own significant stakes in European energy infrastructure, semiconductor equipment manufacturers, and robotics companies. In several cases, acquisitions that might have attracted greater scrutiny in the United States passed with limited review in Europe.

This history is now being revisited. Since 2019, Europe has tightened its foreign direct investment screening mechanisms, excluded Huawei from 5G infrastructure in most member states, and begun subjecting Chinese acquisitions to more systematic national security review. The shift is real but uneven — and it has not yet resolved the fundamental question of how much economic exposure to China is acceptable.

Nothing illustrated the structural change in the European-Chinese relationship more clearly than the electric vehicle dispute of 2023 and 2024.

Chinese electric vehicles — led by BYD but accompanied by a wave of smaller brands — began entering the European market at prices that European manufacturers could not match. The price advantage was not primarily the result of lower wages. It was the result of massive state subsidies across the Chinese EV supply chain: battery manufacturing, raw materials processing, vehicle assembly, and export financing.

The European Commission launched an anti-subsidy investigation in October 2023. The investigation concluded that Chinese EV manufacturers had received state support that distorted competition, and the Commission proposed additional tariffs. The tariffs were implemented in 2024, over the objections of Germany — whose automakers feared Chinese retaliation against their own sales in China — and several other member states.

The episode was instructive on several levels.

It showed that the Brussels Effect — Europe's capacity to use market access as regulatory leverage — operates as a defensive as well as an offensive tool. Europe can use tariffs and trade remedies to slow the penetration of state-subsidised imports, not just to export its regulatory standards.

It also showed the internal tension in European China policy. Germany's position was determined substantially by the interests of its automotive industry. France's position was shaped by its desire to protect domestic EV manufacturing. The final decision required qualified majority voting — meaning that Germany's opposition was overridden — which itself represented a shift from the consensus-based approach that had previously governed EU trade policy toward China.

The EV dispute was a symptom of a broader issue that Europe has been reluctant to confront directly: strategic dependency on Chinese supply chains.

Europe's green transition depends on minerals that China dominates. Roughly 60 percent of global lithium processing, nearly 70 percent of cobalt refining, and more than 80 percent of rare earth processing takes place in China. The batteries that power European electric vehicles, the magnets in European wind turbines, and the solar panels being installed across the continent all flow through Chinese supply chains at some point.

This is the mirror image of the Russian gas dependency that the 2022 energy crisis exposed. Europe is building a green economy on the assumption of continued Chinese supply of the materials that green economy requires. The analogy is not perfect — there are more potential suppliers for critical minerals than there were for pipeline gas — but the structural logic is similar.

The European Critical Raw Materials Act, adopted in 2024, attempts to address this by setting targets for domestic extraction and processing of critical minerals and diversifying import sources. The targets are ambitious and the timelines are long. Mining new deposits in Europe takes a decade. Building processing capacity from scratch takes longer. In the near and medium term, Chinese supply chains remain essential.

European China policy operates on two levels that are in constant tension with each other.

At the level of values and political statements, Europe condemns human rights abuses in Xinjiang, supports Taiwan's right to participate in international organisations, and frames its relationship with China partly in terms of the contrast between democratic and authoritarian governance. The European Parliament has been more consistently critical of China's domestic policies than the Commission or member state governments.

At the level of trade and investment, Europe's behaviour has been substantially governed by economic interest. The Comprehensive Agreement on Investment — a major EU-China deal negotiated over seven years and concluded in principle in December 2020 — was ratified by neither side after the European Parliament froze it in response to Chinese sanctions on European officials and academics. That episode illustrated both Europe's capacity to respond to Chinese pressure and the fragility of any framework that requires sustained political consensus across twenty-seven governments.

The underlying tension is structural. Europe's largest economy, Germany, has the deepest commercial ties with China and the strongest institutional resistance to treating the relationship primarily through a security lens. France is more willing to use market access as political leverage but has its own commercial interests that constrain its rhetoric. Eastern European members are more alert to Chinese influence operations and infrastructure deals but have less economic weight to bring to bear on policy.

The result is a China policy that is more coherent than it was five years ago and less coherent than the situation requires.

One thing that frequently confuses American observers of European China policy is the expectation that Europe will, or should, align with the American approach.

It will not, and the reasons are worth understanding.

The United States frames its relationship with China primarily as strategic competition — a contest for global influence, technological leadership, and the shape of the international order. This framing leads naturally to policies of decoupling, export controls, alliance management, and containment-adjacent strategies.

Europe's starting position is different. It has less global strategic interest in maintaining primacy relative to China. It has more economic exposure that it cannot easily disentangle. Its security relationship with China is less direct — China is not a military threat to European territory in the way it may be to American interests in the Pacific. And its political culture is more resistant to the kind of binary framing — you are with us or against us — that American China strategy tends to generate.

This does not mean Europe is naive about China. The 2019 document calling China a systemic rival was a significant acknowledgment. The EV tariffs were a real policy action with real costs. The exclusion of Huawei from 5G infrastructure was not costless.

But Europe's approach will remain its own — slower to escalate, more focused on specific economic grievances than on strategic competition as such, and perpetually navigating the gap between what its largest member states are willing to do commercially and what the collective European position can sustain politically.

The Port of Piraeus handles around 5 million container units a year. It is the largest container port in the Mediterranean and one of the most important logistics hubs in Europe. Since 2016 it has been majority-owned by COSCO Shipping, a company owned by the Chinese state.

When COSCO acquired its initial stake in 2009, the deal was presented primarily as an economic opportunity for Greece, which was struggling with its fiscal crisis and needed investment. When COSCO acquired majority control in 2016, the same framing applied.

The conversation has changed since then. European officials now speak about critical infrastructure and strategic dependencies in ways they did not in 2016. Several member states have introduced or tightened foreign investment screening mechanisms specifically designed to prevent acquisitions like the Piraeus deal.

But the Piraeus deal is done. COSCO operates the port. The containers moving through it — including goods destined for markets across Central and Eastern Europe — pass through infrastructure that a Chinese state company controls.

No one in Brussels is proposing to unwind it. The conversation is about preventing the next one.

This is how European strategic adjustment typically works: slowly, after the fact, and with the previous arrangement grandfathered in.

The word that European officials have settled on for their China strategy is "de-risking" — a deliberate contrast with the American preference for "decoupling."

The distinction matters. Decoupling implies a systematic effort to separate the two economies, reduce bilateral trade and investment, and build parallel supply chains. It is a strategy with significant costs but a clear directional logic.

De-risking is narrower. It targets specific vulnerabilities — critical infrastructure, sensitive technologies, supply chain chokepoints — without attempting to reduce overall economic engagement. It is a surgical approach rather than a systemic one.

The European version reflects the real constraints of European China policy: the economic exposure that cannot be quickly reduced, the member state governments with different interests, and the political culture that resists binary strategic choices.

Whether de-risking is sufficient to address the vulnerabilities Europe faces, or whether it is a politically comfortable way of avoiding harder decisions, is the question that will define European China policy for the next decade.

Europe's China policy is the art of managing a relationship it cannot afford to lose with a partner it cannot fully trust.