Over the past few years, the European Union and a handful of other European countries have reluctantly moved away from a China policy organized around economic engagement toward a policy of limiting China’s influence in Europe for strategic and security reasons. This is a distinctly and uniquely European style of balancing, which involves marshaling Europe’s internal power and working to build unity across member states. It has almost nothing to do with kinetic military power and is instead focused on technology, diplomacy, economics, and politics.
The driving force behind this shift is China’s behavior — its refusal to end practices of intellectual property theft and forced technology transfers, its failure to enhance market openness for European companies, its use of coercive economic tools and political influence in Europe, and its illiberalism on the world stage. In some ways, the European shift is occurring despite American pressure, not because of it. If China were a responsible stakeholder, U.S. pressure would very likely lead to Europe hedging against the Trump administration and increasing engagement with Beijing. After all, most Europeans are profoundly worried by President Donald Trump, and China seemed well poised to take advantage of this with adroit diplomacy to weaken the trans-Atlantic bond. That it utterly failed to do so shows how badly Beijing has bungled its Europe policy.
With all of that said, Europe is far from united behind this strategic shift. There are Europe-wide divisions, differences between countries, and within them. German Chancellor Angela Merkel remains the most important figure on the pro-engagement side. But unless China’s behavior becomes more benign, Europe’s evolution toward balancing looks set to continue.
China has a strategic dilemma. They’re frustrated by the status quo, and they’re probing for ways to change it. But taking big, bold actions would come at an extraordinary cost to them. You can’t eliminate the possibility that they would be willing to pay that cost, and so we have to be prepared for it. But if you accept the proposition that war is inevitable, and we must do everything we possibly can to prepare for it now, then you risk precipitating the very outcome that your strategy is designed to prevent.
Both leaders held their ground on key issues without offering concessions in either direction. Even so, Biden and Xi clearly set a tone for their respective governments that tensions must be managed and that neither side seeks unbridled confrontation with the other.