A report from the European Union Institute for Security Studies argues that the economic vulnerabilities of China could provide space for a more assertive European strategy, based on risk reduction and the use of the bloc’s economic influence.
The study, titled “China — A Fragile Superpower? How Europe Can Leverage Its Economic Influence Over Beijing”. The authors argue that Chinese foreign policy is increasingly shaped not only by the country’s economic and technological strength but also by internal vulnerabilities.
According to the authors, China faces a combination of structural challenges, including the accelerated aging of its population, the decline in investment returns, high levels of debt, and a persistent crisis in the real estate sector.
“China’s economic growth is expected to slow down. The document states, “considerably in the coming decades,” and adds that projections indicate expansion below 2.5% before 2035.
The authors also highlight that these vulnerabilities may limit the resources available for the international projection of power and increase internal pressure on the Chinese Communist Party.
According to the European Union Institute for Security Studies, in the face of these difficulties, Chinese authorities may strengthen political and economic control and intensify their focus on technological self-sufficiency. “The Chinese leadership may increasingly prioritize security and control over economic efficiency,” the document states.
The study also considers that the economic slowdown may lead Beijing to adopt a more assertive external posture, resorting to nationalism to consolidate domestic support.
“As internal pressures may lead Beijing to adopt a more confrontational foreign policy,” the authors warn, mentioning the risk of increased tensions in areas such as the Taiwan Strait or the South China Sea.
The European think tank points out that the weakness of internal demand could worsen problems of excess industrial capacity, encouraging Chinese companies to export products at low prices to external markets.
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“Industrial overcapacity in China may intensify competitive pressure on European industries,” the document states, emphasizing that this dynamic is already having an impact on sectors such as electric vehicles, solar energy, and batteries.
Despite these vulnerabilities, the study highlights that China continues to have significant instruments of global influence, including its dominant position in strategic supply chains and the weight of its industrial base.
“The significant influence of China is highlighted due to its central role in global supply chains,” he emphasizes.
The authors argue that the EU should adopt a strategy that combines “risk reduction” policies with more active use of its economic influence in relations with Beijing.
Xi Jinping, President of China since 2013
According to the document, the EU continues to represent a fundamental market for the Chinese economy, especially in higher-value-added sectors.
study notes that ‘Europe continues to be a crucial export market for Chinese manufacturers,’ adding that access to the European market is one of the main levers of influence for the bloc.”
The report recommends that the EU preserve this strategic advantage while it still exists by diversifying supply chains, strengthening coordination with international partners, and conditioning access to the European market in sensitive sectors.
For the authors, a more assertive European strategy would allow for better defense of the bloc’s interests and establish a more balanced foundation for relations with Beijing in a context of growing geopolitical rivalry.
“The study points out that ‘Europe should use its economic influence while it still has it.’ ”
