In this issue of MERICS Europe China 360°, we cover the following topics:

  • The new European Commission: Geared toward China challenges
  • Member states greenlighted China-made EV tariffs – What’s next?
  • Are Chinese EV investments in Europe an essential boost or a brewing risk?
  • The US is solidifying its position as top trading partner for the EU over China  

 

The new European Commission: Geared toward China challenges

The new European Commission of President Ursula von der Leyen’s second term is taking shape, with the 26 proposed commissioners awaiting approval by the European Parliament. The mission letters sent by the president to the prospective commissioners show that even if China isn’t named directly, responding to China-related challenges more coherently will be a key task of the new team of EU ministers, as the Commission plans to focus on bolstering the EU’s competitiveness and its geopolitical standing. 

The structure of the new Commission, with overlapping portfolios and shared responsibilities, strengthens von der Leyen’s position in guiding the EU. For China policy, this means a continuation of her assertive yet pragmatic “de-risking” approach, while also addressing trade tensions driven by China’s overcapacity. But the shaping of topical agendas and their execution rests with the new commissioners, who will play a pivotal role in the EU’s practice toward China. 

Not all the new designates have extensive experience with China, but they seem positioned to take a firm stance on key issues. An analysis of portfolios and commissioners can shed some light on the new Commission’s China-related priorities. (See the July edition for insights on the top positions within the new EU administration.)

Trade: A risk-focused portfolio

The EU trade portfolio has been expanded to “trade and economic security,” marking a stronger focus on risk management, particularly regarding China, whose distortions were a key impetus for the EU’s 2023 economic security strategy. A top priority will be preventing the spillover of economic distortions stemming for the techno-industrial focus of the Chinese state-led economy into the EU single market, especially those driven by overcapacity. The Commission’s intensified efforts of the past two years in opening investigations on goods imported from China will likely continue in the next five years.  

Maroš Šefčovič of Slovakia, the Commissioner responsible for the European Green Deal in the previous administration, is now set to take the trade portfolio. His key challenge will be developing an EU economic security doctrine and standards so that EU trade policy can respond even better to trade tensions. This includes coordination with like-minded partners, likely focused heavily on China.

Crucially, the new trade portfolio features building new strategic partnerships with countries like India and developing “clean trade” agreements to secure raw materials and advance green technology in order to limit overdependence on China. These tasks will also fall under the purview of Jozef Síkela of Czechia, Commissioner for Global Partnerships. He is responsible primarily for the EU’s infrastructure initiative Global Gateway, aligning this crucial EU response to China’s Belt and Road Initiative more closely with the EU’s risk mitigation towards China.

Industrial policy: More supportive de-risking policies ahead 

China’s industrial ambitions and US responses to defend its global technological leadership as highlighted in the recent EU competitiveness report by former European Central Bank head Mario Draghi have focused the new Commission on expanding its industrial policy efforts. That means aligning public procurement to enhance supply security and boosting domestic industrial capacity, as well as diversifying supply chains and stockpiling of critical raw materials.

Stéphane Séjourné, a close ally of President Macron, is taking on the high-profile role of vice president with a focus on industrial policy and overseeing trade and three other commissioners as well as the Directorate for industrial policy (DG GROW). In this role, Séjourné, who led the French Foreign Ministry in building momentum for EV tariffs, will surely not deviate much from the effective position of France on China under Macron, one of strong engagement alongside assertive actions for European interests and industries. 



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