CN-E-03: China-EU Relations — De-Risking, EV Tariffs, and the Strategic-Rivalry Pivot (2023–2026)

1. Key Takeaways

• The 30 March 2023 Mercator/EUI speech by European Commission President Ursula von der Leyen marked the inflection point at which the European Union's China policy moved from the 2019 "partner, competitor, systemic rival" triptych into an operational doctrine of "de-risking, not decoupling" — a doctrine subsequently institutionalised in the June 2023 European Economic Security Strategy, the April 2024 Critical Raw Materials Act, and the October 2024 definitive EV countervailing duties. Delivered at the Mercator Institute for China Studies (MERICS) and the European Policy Centre in Brussels one week before her joint visit to Beijing with French President Emmanuel Macron, the speech defined four pillars of EU policy toward China — competitiveness through industrial policy and Single Market reform; economic security through targeted instruments; alignment with allies including the United States and the G7; and continued engagement on global commons such as climate and pandemic preparedness. Its rhetorical innovation — that the EU "needs to de-risk, not decouple" — gave Brussels a vocabulary distinct from Washington's harder export-control language while justifying instrument expansion: the Foreign Subsidies Regulation, an outbound investment screening framework, the European Economic Security Strategy of 20 June 2023 (JOIN(2023) 20 final), and what would become the EV anti-subsidy proceeding opened on 4 October 2023. Within twelve months the speech's framing had been formally adopted by the German Federal Government's Chinastrategie of 13 July 2023, by the G7 Hiroshima Leaders' Communiqué of 20 May 2023, and by the European Council Conclusions of June and October 2023.

• The EV anti-subsidy investigation, opened by the European Commission ex officio on 4 October 2023 without an EU-industry complaint, was the most consequential trade-defence proceeding the EU had launched against China in two decades and signalled the operational application of the de-risking doctrine to a sector where the EU sought neither full decoupling nor passive market opening. Under Regulation (EU) 2016/1037 the Commission could initiate proceedings on its own motion only where it had sufficient evidence of subsidisation, injury, and Union interest — a procedural threshold rarely met without industry petition. DG Trade's notice (OJ C/2023/160, 4 October 2023) cited central-government subsidies, provincial-government subsidies (Hefei, Shanghai, Shenzhen, Shaanxi), preferential lending from state-owned banks, land at below-market prices, and battery-sector subsidies as the basis. The investigation sampled three Chinese-headquartered producers — BYD, Geely Auto, and SAIC — alongside a separately calculated rate for Tesla (Shanghai), whose vehicles were treated as Chinese-origin goods. The provisional duties of 3 July 2024 (Commission Implementing Regulation (EU) 2024/1866) imposed 17.4 per cent (BYD), 19.9 per cent (Geely), and 37.6 per cent (SAIC), with 20.8 per cent for cooperating non-sampled producers — figures that the definitive regulation of 29 October 2024 modestly revised downward in the BYD/Geely lines and held for SAIC.

• The 4 October 2024 EU Member State vote on the definitive countervailing duties produced a clear but not overwhelming qualified majority — ten Member States in favour, five against (Germany, Hungary, Malta, Slovakia, Slovenia), and twelve abstentions — exposing the political-economy fault line between EU industrial-strategy advocates and member-state economies most exposed to Chinese countermeasures in the automotive, agriculture, and luxury-goods sectors. Under the EU's trade defence comitology, definitive duties pass unless a qualified majority of Member States votes against — meaning Germany's "No" did not block the duties because a sufficient bloc of "Yes" votes (France, Italy, Netherlands, Poland, Spain, Ireland, Belgium, Bulgaria, Lithuania, and others) was assembled. The definitive duties published on 29 October 2024 — BYD 17.0 per cent, Geely 18.8 per cent, SAIC 35.3 per cent, Tesla (Shanghai) 7.8 per cent, cooperating non-sampled 20.7 per cent, and non-cooperating 35.3 per cent — entered into force on 31 October 2024 alongside the existing 10 per cent EU most-favoured-nation tariff on car imports, producing aggregate effective tariffs of 27.0–45.3 per cent.

• Chinese countermeasures — anti-dumping proceedings against EU pork (initiated 17 June 2024), anti-dumping investigation into French brandy (initiated 5 January 2024, provisional duties announced 8 October 2024), and an anti-subsidy investigation into EU dairy (initiated 21 August 2024) — were calibrated by MOFCOM to apply pressure on three politically sensitive Member-State export sectors (Spain and Denmark for pork, France for brandy, Ireland and the Netherlands for dairy) without escalating into automotive-supply-chain retaliation that would damage Chinese consumer-electronics and EV production. The brandy probe, opened formally in response to the June 2023 launch of the Economic Security Strategy and the EU launch of the EV investigation, applied provisional duties of 30.6–39.0 per cent on imports of "grape spirits in containers of 200 litres or less" from the EU — targeting Cognac and Armagnac producers such as Pernod Ricard, LVMH, and Rémy Cointreau, whose Cognac sales depend on the Chinese market for approximately 25 per cent of global volume. The pork probe, initiated immediately after the provisional EV duties, threatened approximately €2 billion of Spanish, Dutch, and Danish exports. The dairy probe targeted Irish, French, Italian, and Dutch product lines, including infant formula. The careful asymmetry — China did not open a probe against EU automotive components or chemicals — telegraphed Beijing's understanding that economic warfare against the EU automotive supply chain would damage Chinese automakers' own input dependencies.

• EU Member-State divergence on China policy through 2024–2026 ran along a four-track pattern: France pushing the hawkish line (Macron's strategic autonomy doctrine convergent with de-risking on industrial sectors); Germany on the cautious-pragmatist track (Scholz's two Beijing visits, BDI/VDA opposition to EV duties, the automotive sector's structural China exposure); Hungary on the China-aligned track (Orbán's Belt and Road embrace, CATL/BYD investments, blocking of selected EU consensus); and the Lithuania-Italy "small-state assertion" track (Lithuania's 2021 Taiwan office, Italy's December 2023 exit from the Belt and Road MoU). Germany's resistance to the EV duties — articulated by Chancellor Olaf Scholz, the Federation of German Industries (BDI), and the Verband der Automobilindustrie (VDA) — was driven by the structural fact that Volkswagen, Mercedes-Benz, and BMW collectively derive 30–40 per cent of global vehicle deliveries from China, while Chinese counter-retaliation against German automakers would directly damage German employment in Wolfsburg, Stuttgart, and Munich. Hungarian Prime Minister Viktor Orbán hosted Xi Jinping's 8–10 May 2024 state visit to Budapest, signed a series of Belt-and-Road financing instruments, and confirmed BYD's Szeged plant — Hungary's first major Chinese EV production facility on EU soil — alongside the CATL Debrecen battery plant.

• The EU-China Comprehensive Agreement on Investment (CAI), concluded in principle on 30 December 2020 after seven years of negotiation, has remained suspended since the European Parliament's resolution of 20 May 2021 (2021/2644(RSP)) demanding the lifting of Chinese counter-sanctions on European Parliamentarians, scholars, and entities before ratification proceedings could resume — making the CAI the most visible casualty of the March 2021 EU-China sanctions exchange over Xinjiang and the operational predicate for the de-risking pivot. The March 2021 sanctions package — EU sanctions on four Chinese officials and one entity for Xinjiang human-rights violations under the EU Global Human Rights Sanctions Regime, met within hours by Chinese counter-sanctions on ten EU individuals (including five Members of the European Parliament — Reinhard Bütikofer, Michael Gahler, Raphaël Glucksmann, Ilhan Kyuchyuk, and Miriam Lexmann) and four entities (including MERICS itself) — produced a structural deadlock in which Parliament's leverage made CAI ratification politically impossible while neither side wished to formally renounce the agreement. As of April 2026 the CAI text remains negotiated but unratified; Beijing's counter-sanctions remain in force; Parliament's conditionality remains operative. The agreement's freeze illustrates the broader thesis that the de-risking turn was not a Brussels-initiated policy choice but a consequence of the Xinjiang sanctions cycle and the broader human-rights / values turn that the European Parliament locked in.

• The Critical Raw Materials Act (Regulation (EU) 2024/1252), adopted on 11 April 2024 and entering into force on 23 May 2024, gave the EU its first comprehensive legal architecture for reducing strategic dependence on Chinese-controlled critical raw materials and was the most explicit operational legacy of the de-risking speech. The CRMA's three benchmarks for 2030 — at least 10 per cent of annual EU consumption of strategic raw materials from domestic extraction, at least 40 per cent from EU processing, and at least 25 per cent from EU recycling — paired with the cap that no more than 65 per cent of any single strategic raw material's annual consumption should come from a single third country, were architectural responses to PRC dominance in heavy rare earths (>90 per cent global processing), lithium processing (>60 per cent), and graphite (>80 per cent processing). The Act's "Strategic Projects" designation mechanism enabled accelerated permitting (24 months for extraction projects, 12 months for processing) and access to EU and EIB financing. The first wave of Strategic Projects designations was announced in March 2025, comprising 47 projects across 13 Member States and 5 third countries (Canada, Greenland, Norway, Ukraine, Zambia). The CRMA's diagnostic — that EU dependence on China for processed critical materials was a strategic vulnerability — was a direct operational expression of the von der Leyen de-risking doctrine.

• Beijing's counter-strategy under Xi Jinping pivoted along three axes: a Belt-and-Road recalibration toward "small and beautiful" projects emphasising green technology, digital infrastructure, and operational sustainability over signature mega-projects; a deliberate cultivation of Hungary and Serbia as politically aligned EU and EU-candidate footholds; and a sustained MOFCOM and MFA rhetorical campaign reframing PRC subsidies as legitimate industrial policy comparable to the US Inflation Reduction Act and the EU Green Deal Industrial Plan. During Xi's May 2024 European trip — France (5–7 May), Serbia (7–8 May), Hungary (8–10 May) — the choreography of state visits made the political logic explicit: France as the EU's strategic-autonomy interlocutor with whom Beijing sought to drive a wedge between Brussels and Washington; Serbia as the EU-candidate state outside the Brussels consensus and the first European partner to ratify a bilateral FTA with the PRC; Hungary as the inside-EU dissenter willing to host Chinese EV production. The "BRI 2.0" pivot, signalled in the Third Belt and Road Forum communique (Beijing, 17–18 October 2023), explicitly de-emphasised the debt-financing megaproject model that had drawn EU critique (CN-D-05) in favour of equity-investment partnerships, EV/battery joint ventures, and "green BRI" framing.

• The German automotive industry's pragmatist position — articulated by BDI President Siegfried Russwurm, VDA President Hildegard Müller, and the chief executives of Volkswagen (Oliver Blume), Mercedes-Benz (Ola Källenius), and BMW (Oliver Zipse) — held that overdependence on China was real and worth addressing, but that the EV countervailing-duties instrument would damage EU automakers more than Chinese ones because (a) it raised input costs for German OEMs sourcing battery cells in China, (b) it invited Chinese retaliation that would damage German export earnings in their largest single market, and (c) it would not durably address the underlying competitiveness gap because Chinese OEMs could relocate final assembly to Hungary, Spain, Turkey, or Morocco. Müller's statement of 3 July 2024 — "The EU Commission's tariffs are a step backwards for global free trade and thus for prosperity, employment and growth in Europe" — captured the German-industry position. The chief executives' tactical alignment with this stance reflected not pro-Beijing sympathy but a strategic calculation: that competitiveness, not protection, was the answer to the Chinese EV challenge. The German-industry position was reinforced by the Draghi Report's September 2024 finding that EU productivity growth had been only 60 per cent of US productivity growth since 2000 and that the EU's competitiveness deficit could not be addressed by trade defence alone.

• The "decoupling versus de-risking" debate has by April 2026 evolved into a tripartite distinction: full decoupling (a path no major EU actor advocates but that the Beijing rhetorical line attributes to Brussels), targeted de-risking (the operational policy embodied in CRMA, EV duties, FSR, outbound investment screening), and competitive engagement (the BDI/VDA position emphasising industrial-policy investment and innovation over defensive instruments) — with the Draghi Report's €750–800 billion annual investment requirement now functioning as the political-economy benchmark for whether the EU can deliver on the competitive-engagement pillar of de-risking. The contest within the EU is no longer whether the diagnosis of overdependence is correct — that is now consensus across Berlin, Paris, and Brussels — but whether the EU possesses the fiscal capacity, industrial-policy coherence, and Single Market integration to execute the positive (industrial) side of de-risking rather than only the negative (trade defence) side. The Draghi and Letta Reports together constitute the EU's self-diagnosis on this question. The April 2026 state of play is one of partial implementation: the trade-defence instruments are operational; the CRMA is designating strategic projects; but the €750–800 billion annual investment gap remains unfunded.

• The forward trajectory through 2026 depends on three contested variables: (1) whether Beijing accepts a price-undertaking deal with the European Commission that converts the EV duties into minimum-import-price commitments (negotiations resumed quietly through Q1 2026); (2) whether the Trump-2 administration's tariff dynamics with both China and the EU produce trans-Atlantic alignment ("de-risk together") or trans-Atlantic divergence ("EU caught between US and China"); and (3) whether the next European Commission term sustains the de-risking trajectory or — under industrial pressure as German recession deepens — softens it toward managed accommodation. The European Commission's December 2024 mandate, with Maroš Šefčovič as Trade Commissioner and Stéphane Séjourné as Industrial Strategy Commissioner, continues the von der Leyen-era doctrine. The structural question for 2026–2030 is whether the de-risking framework can survive its three internal contradictions: the German industrial constraint, the Hungarian member-state veto risk, and the asymmetry between the EU's defensive instruments and Beijing's ability to retaliate against specific Member-State export sectors. The CAI remains frozen. The duties remain in force. The competitive-engagement programme remains unfunded. The Strategic Compass China framing remains in place. The de-risking doctrine has proven operationally durable; its political-economy sustainability is the open question.

2. The Record in Brief — China-EU Relations from the 2019 "Systemic Rival" Framing to April 2026

The EU's contemporary China policy did not begin in March 2023. Its doctrinal foundations were laid in the European Commission and EEAS Joint Communication on EU-China — A Strategic Outlook, published on 12 March 2019, which for the first time described the People's Republic as "an economic competitor in pursuit of technological leadership and a systemic rival promoting alternative models of governance" while continuing to designate it as a "cooperation partner" and a "negotiating partner." The triptych — partner, competitor, systemic rival — became the operational vocabulary of EU institutions and was adopted by successive Member-State documents: the German Chinastrategie (13 July 2023), the Dutch China policy paper (October 2022), and the French strategic-autonomy framework. The triptych's three categories were never disambiguated by issue area; they coexisted as overlapping characterisations to be balanced case by case.

The negotiation of the Comprehensive Agreement on Investment (CAI) culminated on 30 December 2020 under the German Council Presidency, in a Xi-Merkel-Macron-von der Leyen virtual signing ceremony that Chancellor Angela Merkel viewed as the strategic capstone of the Merkel era. The CAI's terms — market access commitments in manufacturing (including 50 per cent of new energy vehicles), construction, healthcare, financial services, and selected services; sustainable development provisions including forced-labour commitments — were sold by the Commission as the "level playing field" the EU had sought for a decade. Three months later the architecture collapsed. On 22 March 2021 the EU imposed targeted sanctions on four Chinese officials and the Xinjiang Public Security Bureau Production and Construction Corps over Xinjiang human-rights abuses; within hours Beijing announced counter-sanctions on ten EU individuals — five Members of the European Parliament (Reinhard Bütikofer, Michael Gahler, Raphaël Glucksmann, Ilhan Kyuchyuk, Miriam Lexmann), three national parliamentarians, and two scholars — plus four entities including the Political and Security Committee of the Council, the Subcommittee on Human Rights of the European Parliament, the Mercator Institute for China Studies (MERICS) in Berlin, and the Alliance of Democracies Foundation in Copenhagen. The European Parliament's resolution of 20 May 2021 (2021/2644(RSP)), passed with 599 votes in favour, 30 against, and 58 abstentions, suspended ratification proceedings and conditioned resumption on the lifting of Chinese counter-sanctions. The Chinese counter-sanctions remained in force; the CAI remained frozen; and the EU's China policy entered a phase of operational redirection.

The August 2022 Pelosi visit to Taipei (covered in CN-E-01) and the resulting PLA exercise tempo around Taiwan reframed the European reading of the Indo-Pacific. The EU Strategic Compass, adopted in March 2022 in the immediate aftermath of Russia's invasion of Ukraine, had already characterised China as a "partner, competitor, systemic rival" and committed the Union to enhanced security and defence presence in the Indo-Pacific. The Pelosi crisis and the August 2022 White Paper added urgency to the Strategic Compass's Indo-Pacific commitments and to the EU's Indo-Pacific Strategy of September 2021. By late 2022 the operational question facing Brussels was no longer how to ratify the CAI but how to instrument-build for a relationship now defined predominantly by competition and rivalry, with cooperation confined to global commons.

Three external developments compressed the timeline of the EU's instrument-building. First, the United States Inflation Reduction Act (signed 16 August 2022), with its EV manufacturer tax credits tied to North American assembly and its sourcing requirements for battery critical minerals, demonstrated both the political feasibility of large-scale industrial subsidy in a Western economy and the competitive threat to European EV manufacturers. Second, China's domestic EV industry — supported by approximately a decade of central- and provincial-government subsidies estimated by the Kiel Institute for the World Economy at over US$230 billion in cumulative producer support from 2009 to 2023 [TBD-VERIFY: Kiel Institute estimates vary across studies; the cited figure approximates the upper bound] — emerged from the 2022–2023 period with structural cost advantages that translated into rapid export growth to Europe. Chinese-built BEV shipments to the EU rose from approximately 57,000 vehicles in 2020 to over 437,000 vehicles in 2023, with a roughly 8 per cent market share in EU BEV registrations by Q3 2023 — a market share that the European Commission's October 2023 notice cited as the proximate trigger for the investigation. Third, the broader 2022–2023 reassessment of European supply-chain dependencies on geopolitical adversaries — sharpened by the EU's traumatic decoupling from Russian energy after February 2022 — created political cover for instrument-building against analogous Chinese dependencies.

Within this context von der Leyen's 30 March 2023 speech functioned as the doctrinal statement that translated a half-decade of accumulated diagnostic shifts into an operational framework. The speech's reception — applauded in the European Policy Centre auditorium, immediately picked up by the G7 Hiroshima Communiqué of 20 May 2023, formally institutionalised in the Economic Security Strategy of 20 June 2023, and operationalised in the EV anti-subsidy proceeding of 4 October 2023 — illustrated the velocity with which Brussels could move once doctrinal coherence had been established.

The period from October 2023 through October 2024 was the operational consolidation phase. The EV investigation produced provisional duties (3 July 2024) and definitive duties (29 October 2024). MOFCOM opened countermeasure investigations against brandy (5 January 2024), pork (17 June 2024), and dairy (21 August 2024). The Critical Raw Materials Act was adopted (11 April 2024). The Foreign Subsidies Regulation, in force since 12 January 2023 and fully operational from 12 July 2023, began producing its first interventions in the railway-rolling-stock and solar-panel sectors. The EU Outbound Investment Screening framework was proposed in January 2024 and entered legislative scrutiny. The European Parliament passed the Forced Labour Regulation (Regulation (EU) 2024/3015) in November 2024. Each instrument operationalised a different vector of the de-risking doctrine.

The period from November 2024 through April 2026 has been one of contested consolidation. The new European Commission, with Trade Commissioner Maroš Šefčovič and Industrial Strategy Commissioner Stéphane Séjourné, sustained the doctrine. Negotiations on a price-undertaking deal that would substitute minimum import prices for the EV countervailing duties resumed quietly. The Trump-2 administration's "Liberation Day" tariffs of 2 April 2025 and the subsequent US-China Geneva framework of 12 May 2025 (the 145 per cent / 30 per cent / 90-day pause sequence, covered in CN-E-02) created both an opening (trans-Atlantic alignment on de-risking) and a risk (EU stranded between US and PRC), to which Brussels responded through the von der Leyen Commission's reiteration of "open strategic autonomy." As of April 2026 the duties remain in force; the CAI remains frozen; the CRMA is operational; the brandy provisional duties remain pending final determination [TBD-VERIFY: MOFCOM's final brandy determination has been the subject of multiple deadline extensions through 2025; the precise schedule should be reconciled against the MOFCOM bulletin]; the German industrial position remains constrained; and the strategic-rivalry frame remains the dominant EU operating posture.

3. Von der Leyen's 30 March 2023 De-Risking Speech and the EU Strategic Reorientation

The speech that has come to define the EU's contemporary China posture was delivered in the auditorium of the European Policy Centre, Rue du Trône, Brussels, on the morning of 30 March 2023, co-hosted with the Mercator Institute for China Studies (MERICS) — itself one of the four EU entities under Chinese counter-sanctions since March 2021. The choice of co-host was a deliberate signal: the President of the European Commission was being publicly hosted by an institute that the People's Republic had blacklisted. Mikko Huotari, MERICS Executive Director, opened the proceedings; von der Leyen spoke for approximately 35 minutes; Q&A followed.

The speech's rhetorical architecture moved in five movements. First, an analytical diagnosis: that the Chinese Communist Party under Xi Jinping had concentrated power, accelerated military modernisation, and pivoted from "reform and opening up" toward security and control as a strategic objective. Von der Leyen quoted Xi's October 2022 20th Party Congress report explicitly: "we are confronted with drastic changes in the international landscape, especially external attempts to blackmail, contain, blockade, and exert maximum pressure on China." She read the quotation as evidence of a fundamental shift in CCP self-understanding from integration into the existing international order toward contesting that order.

Second, an operational distinction: the EU "needs to de-risk, not decouple." The phrase had been used previously by analysts and by European officials in subordinate roles; von der Leyen's elevation of it to the President's voice gave it doctrinal weight. The distinction was both substantive — full economic decoupling from China was neither feasible nor desirable, but targeted reduction of risky dependencies was both — and rhetorical, providing a vocabulary that distinguished the European approach from a perceived harder American line.

Third, a four-pillar operational programme: (a) competitiveness through industrial policy and Single Market reform; (b) economic security through targeted instruments — trade defence, the Foreign Subsidies Regulation, outbound and inbound investment screening, dual-use export controls; (c) alignment with allies including the United States, the G7, and the broader OECD on a coordinated approach; and (d) continued engagement with China on global commons — climate, biodiversity, pandemic preparedness, debt sustainability.

Fourth, a Taiwan paragraph that read: "We all have a stake in continued peace and stability across the Taiwan Strait. China's stance on this is a critical determinant of the future of our relationship." The paragraph deliberately framed Taiwan as a test of the EU-China relationship rather than as an EU sovereignty position on Taiwan itself — a calibration distinct from the harder language Macron would deploy and disown a week later.

Fifth, a closing on values: that the EU's relationship with China would be defined "by our own choices" and that human rights, the rule of law, and the international rules-based order remained EU non-negotiables. The speech did not name the CAI, Xinjiang sanctions, Hong Kong, or the Lithuania-Taiwan episode by name, but the structural framing assumed each as predicate.

The speech's reception was rapid and global. Within forty-eight hours the Financial Times, the Wall Street Journal, Le Monde, Frankfurter Allgemeine Zeitung, and the South China Morning Post had front-paged the "de-risking, not decoupling" phrase. The Chinese MFA's Mao Ning, at the regular press briefing of 31 March 2023, responded that "China-EU relations are not directed against any third party, nor should they be controlled or coerced by any third party," and warned against "ideological prejudice" — a phrase that became the standard MFA framing of EU policy for the following two years. The Beijing summit of Macron and von der Leyen on 5–7 April 2023, scheduled before the speech, proceeded with Macron and von der Leyen presenting visibly different postures: Macron's three-hour Xi meeting at the Pine Garden in Guangzhou contrasted with von der Leyen's shorter, more procedurally framed meeting in Beijing. The optics — captured in the famous photograph of von der Leyen walking through a smaller side door of the Great Hall while Macron received Xi at the front — became a meme of differential European treatment that critics read as Beijing punishing the de-risker and rewarding the autonomist.

The speech's institutional translation was rapid. The European Council Conclusions of 30 June 2023 adopted "de-risking, not decoupling" verbatim. The G7 Hiroshima Leaders' Communiqué of 20 May 2023, paragraphs 51–53, used the phrase. The Joint Communication on European Economic Security Strategy of 20 June 2023 (JOIN(2023) 20 final) operationalised the doctrine in EU policy instruments, identifying four risk categories: supply-chain resilience, critical-infrastructure security, technology security and technology leakage, and weaponisation of economic dependencies. Each category was paired with the policy instruments to address it.

By late 2023 the speech's intellectual architecture had been adopted by Member-State documents: Germany's Chinastrategie of 13 July 2023 used the EU triptych; the Netherlands' updated China policy paper used the EU triptych; the French Conseil de Défense decisions reflected the framework. Within the European institutions, the speech's framing was carried forward into the Strategic Foresight Report of June 2023, the Critical Raw Materials Act preparation, and the regulatory pipeline of trade defence instruments.

The speech's contested legacy turns on two questions. First, whether "de-risking" was a substantive distinction from "decoupling" or a rhetorical softening that masked policy convergence. PRC commentators — including Global Times editorials by Hu Xijin and People's Daily analytical pieces — argued the latter: that de-risking was decoupling by another name. Western commentators including the Rhodium Group's Agatha Kratz and MERICS's Jacob Gunter argued the former: that the distinction mattered because it preserved the option of cooperation on global commons and avoided the worst spiral dynamics of full bloc-on-bloc economic separation. Second, whether the speech committed the EU to instruments the Union lacked the political-economy capacity to deliver. The Draghi Report of September 2024 implicitly suggested the answer was partly yes — the competitive-engagement pillar required investment capacity the EU did not possess.

4. The EV Anti-Subsidy Investigation — Procedure, Findings, and the October 2024 Definitive Duties

The European Commission's anti-subsidy proceeding on Chinese-origin battery electric vehicles, formally opened by Notice of Initiation OJ C/2023/160 on 4 October 2023, was the most consequential trade-defence proceeding the EU had launched against the People's Republic in two decades and the operational embodiment of the de-risking doctrine.

The procedural posture was unusual. Under Regulation (EU) 2016/1037 (the EU's basic anti-subsidy regulation, mirroring WTO Subsidies and Countervailing Measures Agreement rules), the Commission could initiate proceedings either on the basis of a complaint by EU industry or on its own motion (ex officio) where sufficient evidence existed. Ex officio initiation was rare; most proceedings began with industry petitions. The European Automobile Manufacturers' Association (ACEA), the German VDA, and the French Plateforme Automobile (PFA) had declined to file a complaint — partly because of internal industry divisions and partly because their members' China exposure made them wary of triggering Chinese retaliation. The Commission therefore initiated ex officio, citing its own market-share analysis and its assessment that subsidy evidence met the threshold.

Von der Leyen's 2023 State of the Union address to the European Parliament on 13 September 2023 had foreshadowed the move, stating that "global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies. This is distorting our market." The Notice of Initiation issued three weeks later cited as subsidisation evidence: central-government subsidies including the New Energy Vehicle (NEV) sectoral subsidy programme; provincial- and municipal-government subsidies in Hefei, Shanghai, Shenzhen, Shaanxi, Anhui, and elsewhere; preferential loans from policy banks (the China Development Bank, the Export-Import Bank of China) and state-owned commercial banks; preferential land prices; preferential treatment in public procurement; tax exemptions for NEV purchases; battery sector subsidies including CATL's preferential financing arrangements; raw-materials subsidies including subsidised lithium processing; and the broader Made in China 2025 industrial policy framework's strategic-emerging-industries support.

DG Trade's investigation followed the standard EU anti-subsidy procedural architecture: (a) selection of sampled exporters; (b) questionnaire responses; (c) verification visits to producers; (d) provisional determination within nine months of initiation; (e) definitive determination within thirteen months. The three sampled Chinese-headquartered exporters were BYD (the largest Chinese EV manufacturer by 2023 global volume), Geely Auto (parent of Volvo Cars, Polestar, Lotus, and Smart), and SAIC (parent of MG Motor, the largest exporter of Chinese-built EVs to Europe by 2023 volume). Tesla (Shanghai) — whose vehicles assembled in the Gigafactory Shanghai entered the EU as Chinese-origin goods under EU customs rules — was treated separately because of its US ownership; an individual rate was calculated for Tesla on the basis of its own subsidy receipts. Verification visits were conducted in China through Q1 2024; SAIC was found to be partially non-cooperating after refusing certain requested information, which raised its rate substantially.

The provisional duties were published in Commission Implementing Regulation (EU) 2024/1866 of 3 July 2024 and entered into force on 5 July 2024 in the form of cash deposits at customs. The provisional rates were: BYD 17.4 per cent, Geely 19.9 per cent, SAIC 37.6 per cent, Tesla (Shanghai) 20.8 per cent (provisionally), cooperating non-sampled producers 20.8 per cent, and non-cooperating producers 37.6 per cent. These rates were added to the existing 10 per cent EU most-favoured-nation tariff on imported passenger cars, producing aggregate rates of 27.4–47.6 per cent.

Between July and October 2024 the Commission and the Chinese Ministry of Commerce engaged in intensive consultations, including on the possibility of a "price undertaking" — a mechanism under Article 13 of Regulation (EU) 2016/1037 whereby exporters can offer minimum import-price commitments in lieu of duties. Six rounds of EU-China consultations in Brussels and Beijing through August–September 2024 attempted to construct a price-undertaking framework. The Commission's position — articulated by Trade Commissioner Valdis Dombrovskis — was that any price-undertaking framework would have to be verifiable, enforceable, and individually negotiated with each exporter. Beijing's position — articulated by MOFCOM Minister Wang Wentao and his deputy Ling Ji — was that a sector-wide price floor administered by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) would be acceptable. The negotiating positions did not converge by the 4 October 2024 Member-State vote.

The 4 October 2024 vote at the Trade Defence Instruments (TDI) Committee was the political crux. Under the comitology procedure for definitive countervailing duties, the Commission's proposal passes unless a qualified majority of Member States votes against. A qualified majority requires at least 55 per cent of Member States representing at least 65 per cent of the EU population. Ten Member States voted in favour — Bulgaria, Denmark, France, Ireland, Italy, Latvia, Lithuania, Netherlands, Poland, plus one — twelve abstained, and five voted against: Germany, Hungary, Malta, Slovakia, and Slovenia [TBD-VERIFY: precise voting alignment has been reported with minor variations across Politico Europe, Reuters, and FT; the figures cited reflect the reconciled reconstruction]. Germany's "No" was politically the most consequential — Chancellor Olaf Scholz had personally intervened with Commission services in the preceding weeks — but the German vote did not block the duties because the qualified-majority threshold against was not met.

The definitive countervailing duties were published as Commission Implementing Regulation (EU) 2024/2754 on 29 October 2024 and entered into force on 31 October 2024. The definitive rates were modestly revised from the provisional rates: BYD 17.0 per cent (down from 17.4), Geely 18.8 per cent (down from 19.9), SAIC 35.3 per cent (down from 37.6), Tesla (Shanghai) 7.8 per cent (sharply down from the provisional 20.8 — reflecting Tesla's individual subsidy profile), cooperating non-sampled 20.7 per cent, and non-cooperating 35.3 per cent. The duties apply for five years from entry into force, subject to expiry review.

The Chinese response was three-fold. First, MOFCOM filed WTO disputes — DS617 (against provisional measures, 9 August 2024) and DS624 (against definitive measures, 4 November 2024) — alleging that the EU's investigation violated multiple provisions of the WTO Agreement on Subsidies and Countervailing Measures. Second, MOFCOM accelerated countermeasure proceedings against EU pork (initiated 17 June 2024 in response to the provisional-duty signalling) and dairy (21 August 2024). Third, Chinese EV manufacturers began strategies of European assembly relocation: BYD's Szeged plant in Hungary, planned to produce 200,000 vehicles annually from 2026, would circumvent duties for vehicles assembled in the EU; Chery's joint-venture announcement with EBRO-EV in Barcelona; SAIC's exploration of Polish and Hungarian sites; Leapmotor's joint venture with Stellantis announced in October 2023 for European manufacturing.

The investigation's analytical legacy is the demonstration that the EU could deploy trade-defence instruments at scale against a strategic Chinese sector without triggering total relationship rupture — and that the resulting tariffs could be partially absorbed by Chinese-EU automaker production relocation rather than producing a clean market closure. The instrumental success of the proceeding has therefore been read by both Brussels de-riskers and Beijing critics as a partial outcome: the EU showed instrument capability; Beijing showed retaliatory capability; the de-risking doctrine was operationalised but its long-term substantive impact on EU-China industrial competition remains contested.

5. Chinese Countermeasures — Pork, Brandy, and Dairy Anti-Subsidy and Anti-Dumping Probes

Beijing's response to the EU EV investigation was calibrated, sequential, and politically targeted. Rather than respond with a single broad tariff package, the Ministry of Commerce (MOFCOM) initiated three sector-specific trade-defence proceedings — brandy, pork, dairy — each timed to apply pressure on specific Member-State export sectors and each carefully designed to avoid retaliating against EU sectors whose Chinese supply-chain integration would damage Chinese manufacturers. The pattern reflected a Beijing strategic doctrine that has been described as "scalpel retaliation": cause measurable economic pain to the politically influential constituencies in Member States whose votes could swing the EU consensus, while preserving the bulk of bilateral trade flows.

The brandy investigation came first. On 5 January 2024, MOFCOM announced Notice No. 1 of 2024 initiating an anti-dumping investigation into "grape spirits in containers of 200 litres or less" imported from the European Union. The product definition was tightly drawn to target Cognac and Armagnac — French luxury brandies whose Chinese market accounts for approximately 25 per cent of Cognac's global sales by value, with annual exports to China by Pernod Ricard (Martell), LVMH (Hennessy), and Rémy Cointreau (Rémy Martin) totalling approximately €1.7 billion in 2023 [TBD-VERIFY: figures from Bureau National Interprofessionnel du Cognac (BNIC) annual reports; 2023 figures reconciled across BNIC and French customs data]. The timing — three months after the EU EV investigation was initiated and well before any provisional duties were imposed — telegraphed Beijing's intent: the brandy probe was preemptive retaliation, not reactive retaliation, intended to pressure Paris ahead of the EU decision points.

MOFCOM's procedural choreography on brandy was unusually rapid. The investigation initiated 5 January 2024; preliminary findings on dumping issued 29 August 2024; provisional measures imposed by Provisional Measures Decision of 8 October 2024 — four days after the 4 October Member-State vote on EV duties. The provisional duties — applied through deposits at customs — ranged from 30.6 per cent to 39.0 per cent, with the largest French producers (Pernod Ricard, LVMH, Rémy Cointreau) receiving rates near the upper bound. Subsequent investigation deadlines were extended multiple times through 2025 and into early 2026; as of April 2026 the final determination remains pending [TBD-VERIFY: the MOFCOM brandy timeline has been subject to multiple extensions; the precise current procedural status should be reconciled against MOFCOM bulletin updates]. The political signal was clear: Beijing held the brandy hammer over French heads as a continuous bargaining instrument.

The pork investigation was sequenced to the provisional EV duties. On 17 June 2024 — two weeks before the Commission's provisional EV duties of 3 July — MOFCOM issued Notice No. 31 of 2024 initiating an anti-dumping investigation into pork and pork by-products originating in the European Union. The pork sector targeting was strategic: EU pork exports to China totalled approximately €2.0 billion in 2023, with Spain accounting for over €1 billion, the Netherlands and Denmark roughly €300–400 million each, France and Germany smaller volumes [TBD-VERIFY: Eurostat trade data and DG AGRI sector reports for precise 2023 figures]. Spain — the largest single EU pork exporter to China — was the largest Member-State beneficiary of EU pork-export earnings and was politically pivotal in the EU pork lobby. The pork probe applied pressure on Madrid through ASAJA, COAG, UPA, and INTERPORC industry associations; Spanish Prime Minister Pedro Sánchez visited Beijing on 9 September 2024, three weeks before the EV vote, in what was widely read as a Madrid attempt to extract assurances on pork in exchange for a non-vote against EV duties.

The dairy probe followed. On 21 August 2024 MOFCOM initiated an anti-subsidy investigation into EU dairy products — covering certain cheeses, milk powder formulations, and infant formula — citing alleged subsidies under the EU's Common Agricultural Policy as countervailable. The legal theory — that EU CAP payments constituted actionable subsidies under the WTO Agreement on Subsidies — was novel and contested; the Commission's defence position was that CAP payments were decoupled, non-trade-distorting, and consistent with WTO obligations. The dairy probe targeted Ireland, the Netherlands, France, Italy, Germany, and Denmark. Irish dairy exports to China, including Kerry Group's infant-formula lines, totalled approximately €700 million in 2023 [TBD-VERIFY: Bord Bia and Ornua dairy export data].

Beyond the three named proceedings, Beijing's broader countermeasure architecture included: (a) continued tightening of rare-earths and critical-minerals export controls (gallium and germanium effective 1 August 2023, graphite October 2023, antimony December 2024) — measures that hit US and EU advanced industry simultaneously; (b) selective procurement pressure on European companies in the Chinese market, including reported customs-clearance delays for European auto and chemicals shipments; (c) information-warfare framing in Global Times, People's Daily, and Xinhua portraying EU duties as "protectionism dressed as climate policy" and "violations of WTO rules"; and (d) the strategic deployment of Premier Li Qiang and senior officials to European capitals — Madrid, Paris, Berlin, Rome — for bilateral pressure outside the Brussels framework.

The countermeasure asymmetry — what Beijing did not do — was equally informative. China did not open countervailing-duty proceedings against EU automotive components, chemicals, machinery, or aerospace — the largest categories of EU exports to China and the categories most deeply integrated into Chinese manufacturing supply chains. This asymmetry reflected the Chinese strategic calculation that disrupting EU automotive components would damage Chinese automakers (BYD, Geely, SAIC), Chinese chemical processors, and Chinese consumer-electronics manufacturers — for whom European inputs were structurally embedded. The scalpel-versus-hammer distinction in Chinese countermeasures has been read by Rhodium Group analysts (Agatha Kratz, Gregor Sebastian) as evidence of a sophisticated Beijing reading of EU member-state political economies, with retaliation targeted at sectors that produce political pressure without producing supply-chain self-injury.

6. Member-State Divergence — Germany, France, Hungary, Lithuania, Italy

The October 2024 EV-duties vote made visible a four-track Member-State alignment that had been crystallising since the von der Leyen speech. The tracks were not formal coalitions; they were durable patterns of national strategic positioning shaped by industrial structure, geopolitical orientation, and domestic political economy.

Germany — cautious pragmatist. Berlin's structural position on China is defined by the automotive industry's exposure: Volkswagen Group, Mercedes-Benz, and BMW collectively derive 30–40 per cent of their global vehicle deliveries from the Chinese market, with VW alone selling roughly 3.2 million vehicles in China in 2023 (down from 4.2 million peak in 2018). German chemicals (BASF, Bayer), machinery (Siemens, Trumpf), and consumer brands likewise have deep China integration. Chancellor Olaf Scholz's two Beijing visits — 4 November 2022 (the first G7 leader to visit post-pandemic) and 14–16 April 2024 (with a delegation including the CEOs of Mercedes, BMW, Bosch, and Siemens Energy) — symbolised the pragmatist track. Both visits were politically controversial: the 2022 visit drew criticism for proceeding without coordination with Paris and Washington; the 2024 visit drew criticism for proceeding immediately before the EV duties decision points. Scholz's argument — that engagement preserves leverage and that German industry could not be sacrificed to a maximalist de-risking agenda — was contested within Germany itself. The Greens (led by Vice-Chancellor and Economy Minister Robert Habeck and Foreign Minister Annalena Baerbock) had pressed for the Chinastrategie of 13 July 2023, which adopted EU triptych language and committed to instrument expansion. Habeck's Wirtschaftsministerium championed the EV proceeding's logic. The Coalition's internal divisions on China policy — between SPD pragmatist, Green strategic-rivalry, and FDP free-trade poles — produced a German position that was visibly fractured.

The BDI (Federation of German Industries) under President Siegfried Russwurm and the VDA (Association of the Automotive Industry) under President Hildegard Müller opposed the EV duties publicly. Müller's statement of 3 July 2024 — "The European Commission's tariffs are a step backwards for global free trade" — captured the industry position. After the Member-State vote, Russwurm warned of "an escalating spiral of trade-policy reactions." VW CEO Oliver Blume, Mercedes CEO Ola Källenius, and BMW CEO Oliver Zipse all publicly opposed the duties. Their opposition was not pro-Beijing alignment but a competitiveness-first calculus: that German OEMs needed Chinese battery cells, Chinese rare earths, and Chinese supply chains, and that competitiveness rather than protection was the appropriate response to Chinese EV cost advantages.

France — strategic-autonomy hawk. Paris under Emmanuel Macron has been the most consistent EU advocate of using trade-defence instruments against Chinese subsidies, while simultaneously pursuing what Macron has called "strategic autonomy" — distance from a perceived American hegemonic line. The combination produced a paradox: France pushed hardest for EV duties while Macron simultaneously visited Beijing in April 2023 and used his return-flight Les Echos and Politico Europe interview (9 April 2023) to suggest that Europe should not become a "vassal" of the United States and should avoid being drawn into a "crisis that is not ours" over Taiwan. The Taiwan comments produced sharp criticism from the European Parliament, central European Member States, and the Biden administration. Macron subsequently walked back the strongest implications. But the deeper French position — combining trade-defence assertiveness with geopolitical autonomy — remained the operating doctrine of the Élysée through 2024 and 2025.

French industrial backers of the de-risking turn — including Renault (whose Megane E-Tech competes directly with Chinese EVs) and Stellantis (Carlos Tavares had been a public critic of unrestricted Chinese EV imports before his October 2024 departure) — converged with the Élysée on the EV proceeding. The simultaneous Chinese brandy retaliation against French Cognac producers produced a complex domestic political economy: Macron faced pressure from Charente Cognac producers to soften the EV position, but the French government held the duties line on the basis that retreat under retaliation would set a worse precedent.

Hungary — China-aligned. Prime Minister Viktor Orbán's Hungary became the principal EU-internal advocate of the China relationship. The 8–10 May 2024 Xi Jinping state visit to Budapest was the centrepiece — the only EU capital Xi visited on the May 2024 European trip alongside Paris and Belgrade. The visit produced a joint declaration elevating bilateral relations to an "all-weather comprehensive strategic partnership for a new era" — language otherwise reserved for Russia and a small number of strategic partners. Hungarian-Chinese investment flows had been growing since 2019: CATL's announcement in August 2022 of a €7.3 billion battery plant at Debrecen, Eastern Hungary; BYD's announcement in December 2023 of an EV assembly plant at Szeged; Great Wall Motors' Hungarian plans; and the announcement of a Budapest-Belgrade railway financed by Chinese Eximbank.

Orbán's Hungary used its EU Council seat to block consensus on selected China-related measures, including human-rights statements and Taiwan-related language. The Hungarian vote against the EV duties on 4 October 2024 was unsurprising; Orbán justified it on industrial-policy grounds (Hungary as host of Chinese EV production stood to benefit from Chinese investment) and on free-trade grounds. Hungarian Foreign Minister Péter Szijjártó's frequent Beijing and Hong Kong visits — five visits to China in 2023 alone, by reported tally [TBD-VERIFY: Szijjártó's 2023 visit count reconstructed from MFA press releases] — further entrenched the China-aligned positioning.

Lithuania — values-first small state. Vilnius's positioning crystallised in 2021 when the Lithuanian government allowed the opening of a "Taiwanese Representative Office" (Taivaniečių atstovybė) in Vilnius on 18 November 2021 — using "Taiwanese" rather than the conventional "Taipei" designation. Beijing's response was rapid: diplomatic relations were downgraded to chargé d'affaires level on 21 November 2021; PRC customs systems began rejecting Lithuanian-origin imports; PRC pressure was applied to third-country firms (including German and French automotive suppliers) to drop Lithuanian content. The EU filed WTO complaint DS610 on 27 January 2022 on behalf of Lithuania, alleging Chinese discriminatory trade measures. The dispute proceeded; consultations were held; a panel was composed; the panel's work was suspended in 2023. As of April 2026 the Taiwanese Representative Office continues operating in Vilnius; bilateral relations remain at chargé d'affaires level; and the Lithuania episode stands as the most consequential single-Member-State demonstration that PRC economic coercion can be deployed against EU values choices [TBD-VERIFY: precise procedural status of DS610 as of April 2026 should be reconciled against WTO Dispute Settlement Body documents].

Italy — pragmatist exit from BRI. Rome's positioning under the Meloni government produced one of the most visible single Member-State decisions of 2023: Italy's notification on 6 December 2023 that it would not renew the 2019 Memorandum of Understanding on the Belt and Road Initiative — the only G7 country ever to have signed onto BRI. The MoU lapsed in March 2024. Prime Minister Giorgia Meloni's positioning combined the symbolic exit from BRI with the maintenance of bilateral trade flows, including a state visit to Beijing in July 2024 that produced a "Three-Year Action Plan" for industrial cooperation 2024–2027. Italian fashion, food, and automotive industries' China exposure structurally constrained any harder break. Italy voted in favour of the EV duties on 4 October 2024.

The four-track pattern — Germany cautious-pragmatist, France strategic-autonomy hawk, Hungary China-aligned, Lithuania values-first — with Italy in a fifth pragmatist-exit position, illustrates the structural dispersion of EU Member-State China policy. The von der Leyen-era doctrine has held the EU consensus together at the institutional level, but the Member-State variance has constrained how far that consensus can be operationalised on the harder political questions: Xinjiang sanctions enforcement, the CAI ratification predicate, the Taiwan posture, and the next-generation industrial-policy financing question.

7. The CAI Frozen — Investment Agreement, Xinjiang Sanctions Spillover, and the European Parliament Constraint

The Comprehensive Agreement on Investment, concluded in principle on 30 December 2020 after seven years of negotiation, was meant to be the strategic capstone of EU-China economic relations. As of April 2026 it remains the most visible single piece of frozen EU-China architecture and the operational predicate of the de-risking turn.

The CAI's negotiation began in 2013. The negotiating phase intensified after 2017 under Trade Commissioner Cecilia Malmström and continued under Phil Hogan and Valdis Dombrovskis. The political push to conclude before year-end 2020 came principally from German Chancellor Angela Merkel and the Germany-led EU Council Presidency of the second half of 2020. The political objective was to lock in market-access commitments from China before the incoming Biden administration could constrain European autonomy on China policy through transatlantic coordination. The deal-in-principle was announced via virtual signing ceremony on 30 December 2020, with Xi Jinping, Merkel, Macron, von der Leyen, and Charles Michel participating.

The content of the CAI included market-access commitments by China in manufacturing (including a binding commitment to allow 50 per cent foreign ownership in new energy vehicle manufacturing — a sector previously restricted), construction, ancillary services for air and maritime transport, telecommunications cloud services, computer services, private healthcare, biological resources, ancillary services for air transport, and financial services. China committed to disciplines on state-owned enterprises, transparency in subsidies, and prohibitions on forced technology transfer. On the sustainable-development side, China committed to "continued and sustained efforts" to ratify the ILO Forced Labour Conventions 29 and 105 — a commitment that would prove politically central.

The March 2021 sanctions exchange shattered the politics of ratification. On 22 March 2021, under the EU Global Human Rights Sanctions Regime adopted in December 2020, the Council imposed targeted sanctions (asset freezes and travel bans) on four Chinese officials and one entity — Wang Junzheng (Party Secretary of the Xinjiang Production and Construction Corps), Wang Mingshan, Chen Mingguo, Zhu Hailun (Xinjiang officials), and the Public Security Bureau of the Xinjiang Production and Construction Corps. The sanctions were the first the EU had imposed on Chinese officials since the post-Tiananmen 1989 arms embargo. They were coordinated with the UK, the United States, and Canada.

Beijing's response was disproportionate and immediate. Within hours, on 22 March 2021, the Chinese MFA announced counter-sanctions on ten EU individuals: five Members of the European Parliament — Reinhard Bütikofer (Greens, Germany, then chair of the EP Delegation for relations with the PRC), Michael Gahler (EPP, Germany), Raphaël Glucksmann (S&D, France), Ilhan Kyuchyuk (Renew, Bulgaria), Miriam Lexmann (EPP, Slovakia); three national parliamentarians; and two scholars — Adrian Zenz (the Washington-based researcher whose work on Xinjiang had been most influential) and Björn Jerdén (Swedish Institute of International Affairs). The counter-sanctions also targeted four entities: the Political and Security Committee of the EU Council, the Subcommittee on Human Rights of the European Parliament, the Mercator Institute for China Studies (MERICS) in Berlin, and the Alliance of Democracies Foundation in Copenhagen. The sanctioned persons and entities were banned from entering the PRC, Hong Kong, and Macau; their assets in the PRC were frozen; and Chinese citizens and entities were prohibited from doing business with them.

The disproportionality was striking. The EU's sanctions had targeted four officials and one entity directly responsible for Xinjiang policy; Beijing's counter-sanctions targeted democratically elected legislators, a leading research institute, and a parliamentary subcommittee. The European Parliament's response was the resolution of 20 May 2021 (2021/2644(RSP)), adopted by 599 votes in favour, 30 against, and 58 abstentions, demanding the lifting of Chinese counter-sanctions as a precondition for the resumption of CAI ratification proceedings. The resolution's text noted that "any consideration of the Comprehensive Agreement on Investment (CAI), as well as any discussion on ratification by the European Parliament, has justifiably been frozen because of the Chinese sanctions in place."

The freeze has held. Through five years and three EU Council Presidencies, the Chinese counter-sanctions have not been lifted; the Parliament's resolution has not been amended or rescinded; the CAI has not been resubmitted for ratification. Beijing has signalled at various points — in 2022 under Premier Li Keqiang, in 2023 in von der Leyen's Beijing meeting with Xi, in the December 2023 EU-China Summit communiqué — interest in "reviving" the CAI. The Commission's position has remained that the agreement is in suspended animation pending the lifting of counter-sanctions, and that the broader 2022–2024 deterioration of EU-China relations has made even hypothetical revival increasingly unlikely on grounds.

The CAI's structural effect on EU-China policy has been to lock in a baseline of formal-architecture absence. Without the CAI as a framework, EU-China economic interactions have been governed by the 1985 EEC-China Trade and Economic Cooperation Agreement (still in force, never replaced) and by case-by-case sectoral instruments. The absence of an overarching investment framework has been a backdrop against which the de-risking instruments have been built; it has both removed the pressure to preserve the agreement and removed the constraint that the agreement's existence would have imposed on instrument expansion.

The Xinjiang sanctions cycle has also fed forward into Forced Labour Regulation (Regulation (EU) 2024/3015, adopted November 2024), which prohibits products made with forced labour from being placed on the EU market regardless of origin. The Regulation's implementation in 2026–2027 is expected to produce significant interactions with Xinjiang-origin cotton, polysilicon, and tomato product imports, with Commission enforcement actions anticipated in the cotton and solar-grade polysilicon sectors. The Forced Labour Regulation is the policy legacy of the Xinjiang sanctions episode — and operationalises in market-access terms the human-rights conditionality that the European Parliament's CAI resolution had asserted in political terms.

8. The Critical Raw Materials Act and EU Supply-Chain Resilience Architecture

The Critical Raw Materials Act (CRMA, Regulation (EU) 2024/1252), adopted by the European Parliament and Council on 11 April 2024 and entering into force on 23 May 2024, is the most explicit operational legacy of the von der Leyen de-risking doctrine and the legal-architectural answer to the diagnostic that EU strategic-materials dependence on China constitutes a security vulnerability.

The CRMA's diagnostic baseline was unambiguous. As of 2023, the People's Republic accounted for over 90 per cent of global heavy rare earths processing, over 60 per cent of lithium processing capacity (despite controlling only roughly 13 per cent of lithium mining), over 80 per cent of natural graphite processing, approximately 65 per cent of cobalt refining (despite the Democratic Republic of Congo accounting for the majority of cobalt mining), and dominant shares in the processing of manganese, magnesium, scandium, and silicon metal. The EU's own extraction and processing capacity in these materials was negligible — under 5 per cent of consumption for most listed critical materials. The Russia-related decoupling experience of 2022 — when the EU's dependence on Russian natural gas (40 per cent of consumption in 2021) had been weaponised — provided the political template for treating Chinese material dependence as an analogous risk.

The CRMA establishes three categories: strategic raw materials (a subset of critical raw materials deemed of highest strategic importance), critical raw materials (the broader list), and other materials. The strategic-raw-materials list as of 2024 includes lithium, cobalt, nickel, manganese (battery-grade), natural graphite, silicon metal, rare earth elements for magnets (neodymium, praseodymium, dysprosium, terbium), gallium, germanium, tungsten, titanium, copper, aluminium, boron, magnesium metal, bismuth, and platinum group metals.

The Act sets three 2030 capacity benchmarks for strategic materials: (a) at least 10 per cent of annual EU consumption supplied from EU extraction, (b) at least 40 per cent from EU processing, and (c) at least 25 per cent from EU recycling. A fourth provision caps single-third-country dependence at 65 per cent of annual consumption — a direct response to the structural overconcentration of supply in the PRC. The Act creates a "Strategic Projects" designation mechanism: projects assessed as contributing to the targets are eligible for accelerated permitting (maximum 24 months for extraction projects, 12 months for processing and recycling), priority access to EU and EIB financing, and streamlined administrative procedures. Projects can be located in the EU or in third countries; non-EU projects are eligible if located in countries with which the EU has concluded a Strategic Partnership on critical raw materials.

The first Strategic Projects designation wave was announced on 25 March 2025, comprising 47 projects: 14 lithium projects (across Portugal, France, Germany, Czech Republic, Finland, Spain, Austria), 9 nickel and cobalt projects (Finland, France, Greece), 7 graphite projects (Sweden, Germany, France), 5 magnet rare-earth projects (Estonia, France), 3 manganese projects, 3 silicon metal projects, and various others. A second wave in March 2026 added 32 additional projects, with a stronger emphasis on third-country processing partnerships in Canada, Norway, Greenland, Ukraine, Serbia, Kazakhstan, and Zambia.

The CRMA is paired in the EU industrial-policy architecture with the Net-Zero Industry Act (NZIA, Regulation (EU) 2024/1735, in force August 2024), which targets 40 per cent of clean-technology deployment to be EU-manufactured by 2030, including in solar PV, wind turbines, batteries, electrolysers, heat pumps, and grid technologies. The two acts together constitute the EU's positive industrial-policy answer to the de-risking doctrine: where the EV duties and the FSR are defensive instruments, the CRMA and NZIA are supply-side instruments aimed at building EU capacity in materials and clean-technology manufacturing.

The CRMA's limitations are politically and economically significant. The 10/40/25 capacity benchmarks are not legally binding obligations on Member States or on the EU as a whole; they are targets the Strategic Projects designation mechanism is meant to advance, but capital deployment is contingent on private-sector and EIB investment decisions. The third-country diversification component depends on Strategic Partnerships negotiated bilaterally — and several key partners (Indonesia for nickel, Bolivia for lithium, China-controlled DRC mining concessions for cobalt) raise complex political-economy questions. The 65 per cent single-third-country cap is unenforceable through direct regulation; it operates indirectly through Strategic Project prioritisation. The Draghi Report of September 2024 estimated that the EU's full critical-raw-materials build-out — extraction, processing, recycling, manufacturing — would require approximately €100 billion of additional investment over five years; no dedicated CRMA funding instrument of this scale has been created.

The PRC's response to the CRMA has been three-fold. First, Beijing has selectively tightened export controls on materials in which it holds dominant processing positions: gallium and germanium controls (effective 1 August 2023), graphite (October 2023), antimony (effective 15 September 2024 in modified form), and tungsten products (announcement February 2025). The export-control measures have been calibrated to apply pressure on both US and EU advanced industry simultaneously, with licence-issuance patterns that have produced de-facto delays of 30–90 days even when licences were eventually granted. Second, PRC firms (particularly CATL, BYD, Ganfeng Lithium, Tianqi Lithium, and Huayou Cobalt) have moved aggressively to acquire and operate non-EU mining and processing assets — in Indonesia (nickel laterite processing), Argentina (lithium), Chile (lithium), Bolivia (lithium), the DRC (cobalt), and Zimbabwe (lithium) — building positions that complicate any future EU CRMA diversification away from PRC-controlled supply. Third, Beijing has pursued formal complaint mechanisms: a December 2024 PRC consultation request at the WTO challenging EU NZIA provisions; threatened challenges to specific CRMA implementing measures.

The CRMA represents the EU's most concrete attempt to instrumentalise the de-risking doctrine in the materials domain. As of April 2026 its capacity build-out is in early phases; the 2030 benchmarks remain aspirational; the Strategic Projects designation mechanism is operational but capital-constrained; the underlying PRC dominance in processing remains largely intact. The Act's significance is architectural: it establishes the legal-administrative framework within which a multi-decade capacity build-out can proceed if political and capital commitment is sustained.

9. Beijing's Counter-Strategy — BRI Recalibration, the Hungary-Serbia Pivot, and Subsidy Reframing

Beijing's response to the EU de-risking turn has not been reactive defence but a coordinated counter-strategy operating along three axes: a recalibration of the Belt and Road Initiative toward "small and beautiful" projects emphasising green technology and digital infrastructure; a deliberate cultivation of Hungary and Serbia as politically aligned EU and EU-candidate footholds; and a sustained rhetorical campaign reframing PRC subsidies as legitimate industrial policy comparable to the US IRA and the EU Green Deal Industrial Plan.

BRI 2.0 recalibration. The Third Belt and Road Forum, held in Beijing on 17–18 October 2023 — the tenth anniversary of Xi's original BRI proposal — marked a deliberate doctrinal shift. The Forum's Joint Statement emphasised "open, green, and clean" cooperation; the President's address explicitly invoked "small and beautiful" projects as the future model. The shift was responsive to multiple critiques: (a) the "debt trap" framing of BRI mega-projects that had become routine in European, North American, and Indian commentary (covered in CN-D-05); (b) the deteriorating financial position of Chinese policy banks after several restructurings of BRI loans in 2022–2023; (c) the geopolitical exposure of large signature projects (Hambantota Port, Mombasa-Nairobi railway, the various Pakistan CPEC corridors) to host-country political swings; and (d) the strategic logic of pivoting toward sectors where Chinese competitive advantages were strongest — EV manufacturing, battery cells, solar PV, 5G infrastructure, smart-city platforms.

The European projection of BRI 2.0 emphasised EV and battery investment as the "Belt and Road's European footprint." CATL's €7.3 billion Debrecen plant (announced August 2022, construction underway through 2024 and 2025), BYD's Szeged plant (announced December 2023), and Eve Energy's Hungarian battery plant (announced 2024) were framed in PRC media as "green BRI" expressions. The political-economy logic was double-sided: Chinese firms gained EU production capacity that circumvented the EV countervailing duties (Hungarian-built BYD vehicles would not attract the 17.0 per cent CVD), while Hungary gained employment and tax revenue. The strategic effect was to embed Chinese manufacturing inside the EU customs territory, complicating any future hardening of the de-risking turn.

The Hungary-Serbia pivot. Xi's May 2024 European trip (5–10 May 2024) made the political logic of the China-aligned pivot explicit. After three days in France (with Macron) and the EU-level conversation with von der Leyen, Xi flew to Belgrade for the 7–8 May segment with President Aleksandar Vučić, then to Budapest for the 8–10 May segment with Prime Minister Viktor Orbán. The Belgrade segment included the 8 May ceremonial visit to the site of the 1999 NATO bombing of the Chinese Embassy, which Xi used to emphasise historical alignment between China and Serbia on questions of sovereignty and Western interventionism. The China-Serbia Free Trade Agreement, signed in October 2023 and entering into force on 1 July 2024, became the first such agreement between China and a European country (Serbia is an EU candidate but not a Member). The FTA's provisions — covering goods, services, and investment protections — created a precedent: a European country was legally free to conclude a comprehensive FTA with China outside the EU framework.

The Hungarian segment of the visit produced a joint declaration upgrading bilateral relations to an "all-weather comprehensive strategic partnership for a new era" — diplomatic language otherwise reserved for Russia, Pakistan, and a small number of strategic-vector partners. The accompanying instruments included expansion of yuan settlement facilities at Hungarian banks, MoUs on infrastructure financing including the Budapest-Belgrade railway (a long-stalled project that progressed under the visit), expansion of EV and battery investment, and a joint commitment to the BRI framework. Orbán's framing — that Hungary was the "easternmost station of the BRI in Europe and the westernmost station of the BRI" — captured the strategic positioning.

Hungary's role within the EU has been to provide a member-state voice opposing the harder de-risking instruments. The Hungarian vote against EV duties on 4 October 2024 was complemented by Hungarian opposition to selected EU sanctions packages, blocking of consensus on China-related human-rights statements, and ministerial-level visits to Beijing (Foreign Minister Szijjártó's repeated visits) that consistently signalled differentiation from the broader EU position.

Subsidy reframing. The third axis of Beijing's counter-strategy has been rhetorical: a sustained MFA, MOFCOM, and People's Daily / Global Times campaign that reframes PRC industrial subsidies as legitimate green-technology support comparable to the US Inflation Reduction Act and the EU Green Deal Industrial Plan. The argument has three components. First, that the EU and US themselves operate massive subsidies for clean-technology and EV sectors (the IRA's US$369 billion clean-energy provisions; the EU's Innovation Fund, Important Projects of Common European Interest mechanism, and Member-State subsidies under temporary state-aid frameworks). Second, that Chinese subsidies have been targeted at climate-relevant sectors aligned with the Paris Agreement objectives that the EU itself champions. Third, that the application of WTO countervailing-duty rules to Chinese green-technology exports while exempting domestic Western subsidies constitutes selective enforcement.

The Chinese reframing has gained traction in selected European audiences. Bruegel's Niclas Poitiers, ECFR's Janka Oertel, and Carnegie Europe's Stefan Lehne have written analytical pieces noting the structural similarity between Chinese, US, and EU industrial subsidy frameworks while distinguishing on the basis of WTO compatibility, transparency, and the rule-of-law context. Global Times editorials and People's Daily commentary have weaponised the analytical critique into political messaging: that the EU's duties reflect not principled trade-defence but protection of incumbent industries unable to compete with Chinese innovation. The rhetorical contest is structural and is unlikely to be resolved on its merits; its political effect is to provide European pragmatist constituencies — German industry, French Cognac producers, Spanish pork exporters — with arguments that align their commercial interests with a particular reading of the policy debate.

Beijing's counter-strategy has been characterised by patience, sequential calibration, and asymmetric retaliation. Through 2025 and into 2026, the strategy has not produced a reversal of EU de-risking instruments; the EV duties remain in force, the CRMA continues implementation, the FSR has been used against PRC-subsidised railway and solar-panel suppliers. But the strategy has prevented escalation, preserved bilateral channels (the EU-China Summit and ministerial dialogues continue), and embedded Chinese manufacturing inside the EU customs territory at scales that constrain any future hardening. The strategic equilibrium of April 2026 reflects Beijing's success in achieving a contained-but-stable relationship that constrains EU instrument expansion without resolving the underlying competitive tensions.

10. Contested Accounts — Brussels De-Risker, Beijing-MFA, and German-Industry Pragmatist

Three contested accounts structure the political-economy debate over EU-China relations in 2023–2026. Each is internally coherent, deployed by specific institutional actors, and resistant to refutation by the others. A corpus document must present each account on its own terms.

Account A: The Brussels De-Risker account. Articulated by Commission President Ursula von der Leyen, High Representative Josep Borrell (to November 2024) and Kaja Kallas (from December 2024), Trade Commissioner Valdis Dombrovskis (to November 2024) and Maroš Šefčovič (from December 2024), and the broader DG Trade and EEAS apparatus, the de-risker account holds: (1) that Xi-era China has fundamentally shifted from integration into the rules-based international order toward contestation of it, evidenced by the assertiveness of foreign-policy behaviour (South China Sea, Taiwan, Lithuania), the consolidation of CCP control, and the operational alignment with Russia after February 2022; (2) that PRC industrial subsidy at scale, particularly in green-technology sectors, distorts global markets and creates strategic dependencies that constitute security vulnerabilities; (3) that the EU's existing trade-policy instruments were calibrated for an earlier era and require expansion to address these distortions; (4) that de-risking, distinct from decoupling, preserves engagement on global commons while addressing the targeted risks; (5) that the European Parliament's values-based conditionality (Xinjiang sanctions, Forced Labour Regulation, human-rights vigilance) is a constitutive feature of EU policy that cannot be subordinated to economic relationship management; and (6) that operational success requires sustained instrument deployment, member-state alignment behind the institutional consensus, and continuous calibration in response to Chinese countermeasures.

The de-risker account treats the EV duties, the CRMA, the FSR, and the Forced Labour Regulation as proportionate responses to identified structural problems. It treats Chinese countermeasures as confirming rather than refuting the diagnosis: that Beijing's willingness to weaponise trade in retaliation demonstrates the dependency that de-risking is meant to address. The account's principal vulnerability is its competitive-engagement pillar: the Draghi and Letta Reports' diagnoses that the EU lacks the fiscal and industrial-policy capacity to deliver the positive side of the de-risking equation. The de-risker response has been to argue that the doctrine sets the direction even if execution lags, and that the alternative — passive accommodation or full decoupling — is worse.

Account B: The Beijing-MFA account. Articulated by the Ministry of Foreign Affairs spokesperson team (Mao Ning, Lin Jian, Wang Wenbin, Hua Chunying), by Xi Jinping in summit communiqués, by MOFCOM in trade-defence briefings, by People's Daily and Xinhua in editorial commentary, and by Global Times in mass-audience messaging, the Beijing account holds: (1) that EU policy toward China has been progressively distorted by alignment with the United States' geopolitically driven containment strategy, with "de-risking" functioning as a rhetorical disguise for de-facto decoupling; (2) that PRC industrial subsidies are legitimate domestic industrial policy comparable to and smaller in scale than US IRA and EU Green Deal provisions, and that selective application of countervailing-duty rules to Chinese exports while exempting Western domestic subsidies constitutes "double standards"; (3) that EU trade-defence instruments violate WTO obligations, particularly the Subsidies and Countervailing Measures Agreement's specificity and benefit-calculation requirements; (4) that the EU's Xinjiang sanctions and Forced Labour Regulation are based on "lies and disinformation" propagated by hostile diaspora and US-aligned research, and that they constitute interference in PRC sovereign affairs; (5) that PRC countermeasures (brandy, pork, dairy) are proportionate and lawful responses to EU protectionism; and (6) that the long-term equilibrium will require Brussels to recognise that Chinese industrial competitiveness reflects technological and scale advantages that cannot be neutralised by trade-policy instruments, and that the durable path is mutual market opening rather than mutual constraint.

The Beijing account's principal rhetorical strength is the IRA-parity argument: that the United States and to a lesser extent the EU operate large industrial subsidies for clean-technology sectors, and that the doctrinal distinction between Western and Chinese subsidisation is contested. Its principal vulnerability is the empirical record of PRC subsidy scale (Kiel Institute, Rhodium, and CSIS estimates of cumulative PRC EV and battery subsidies in the hundreds of billions of dollars), the transparency deficit relative to Western subsidies (which are publicly budgeted and reported), and the linkage between PRC industrial subsidy and broader strategic-rivalry behaviours that the de-risker account foregrounds.

Account C: The German-Industry Pragmatist account. Articulated by BDI President Siegfried Russwurm, VDA President Hildegard Müller, VW CEO Oliver Blume, Mercedes-Benz CEO Ola Källenius, BMW CEO Oliver Zipse, and the broader German industrial leadership, the pragmatist account holds: (1) that the diagnostic of overdependence on China is correct and worth addressing, but the EV-duties instrument is the wrong tool because it raises input costs for German OEMs sourcing Chinese battery cells while inviting retaliation against German export earnings; (2) that the structural competitiveness challenge presented by Chinese EVs cannot be addressed by trade defence alone because Chinese OEMs can and will relocate final assembly to circumvent duties, and the underlying cost advantages reflect scale, supply-chain integration, and innovation that European producers must match through investment rather than block through tariffs; (3) that the EU's positive industrial-policy programme — Draghi-scale investment in batteries, automation, AI, and clean-tech manufacturing — is the appropriate response; (4) that German engagement with China at the political-economy level preserves negotiating leverage and protects the export-revenue base that funds the German social model and underwrites EU industrial capacity; and (5) that the alternative — alignment with maximalist de-risking — would damage German competitiveness, reduce EU-wide industrial capacity, and produce worse outcomes than calibrated engagement.

The pragmatist account is institutionally embedded in the BDI, the VDA, the chambers of commerce (DIHK and the Asia-Pacific Committee of German Business, APA), and the Sino-German Friendship Association apparatus. It has been operationally expressed in the Scholz government's two Beijing visits (November 2022, April 2024), in the German "No" vote on EV duties, and in the continued investment by German automakers in Chinese R&D and production. Its principal vulnerability is the structural fact that Chinese-EV market success in Europe directly threatens German OEMs' core mass-market segments (Volkswagen ID.3/ID.4 versus BYD Dolphin/Atto 3), making the "competitive engagement" prescription dependent on a competitiveness gap closing that the Draghi Report suggests will take a decade of sustained investment. The pragmatist account has lost ground in EU institutional debates from 2023 to 2026 as Brussels has hardened the de-risking line, but it remains the dominant frame in German industrial and chancellery circles and continues to constrain the operational reach of EU de-risking instruments.

Each account is internally coherent. Each shapes the political behaviour of its institutional carriers. None has succeeded in displacing the others. The April 2026 equilibrium reflects the operational dominance of the de-risker account at the EU institutional level, the rhetorical persistence of the Beijing account in PRC media and in selected European discourses, and the practical constraint exerted by the German-industry pragmatist account on the depth of EU implementation. The contest among the three accounts is the content of the EU-China political-economy debate.

11. Conclusion and Forward View

The China-EU relationship from March 2023 to April 2026 has been remade along three interlocking axes: doctrinal — through the de-risking framework that von der Leyen articulated and that successive EU institutions and Member States have adopted; instrumental — through the EV countervailing duties, the Critical Raw Materials Act, the Foreign Subsidies Regulation, the Forced Labour Regulation, the outbound-investment screening proposal, and the Net-Zero Industry Act; and political-economy — through the entrenchment of Member-State divergence along the four-track pattern (Germany cautious-pragmatist, France strategic-autonomy hawk, Hungary China-aligned, Lithuania values-first) with Italy occupying a fifth pragmatist-exit position. The frozen CAI, the unresolved Xinjiang counter-sanctions, the Beijing-MFA reframing of subsidies as legitimate industrial policy, and the German industrial-pragmatist constraint together define the operational space within which the EU's China policy now functions.

Three structural questions will shape the trajectory through 2026–2030.

First, whether a price-undertaking deal converts the EV duties into minimum-import-price commitments. Negotiations between DG Trade and MOFCOM, suspended after the 29 October 2024 definitive determination, resumed quietly through Q1 2026. The technical question — whether a sector-wide CCCME-administered price floor would be acceptable to the Commission, or whether individually negotiated commitments with each cooperating exporter would be required — has been the principal obstacle. The political question — whether either side can sustain a deal politically without appearing to concede — has been a deeper constraint. A price-undertaking outcome would relieve some of the bilateral pressure while preserving the EU's analytical position that PRC subsidisation is countervailable; failure to conclude would leave the duties in force through their 2029 expiry-review window.

Second, whether Trump-2 administration tariff dynamics produce trans-Atlantic alignment ("de-risk together") or trans-Atlantic divergence ("EU caught between US and China"). The April 2025 "Liberation Day" tariffs and the May 2025 US-China Geneva framework (covered in CN-E-02) created both opportunity and risk. The opportunity is a coordinated de-risking architecture in which the EU's instruments complement US export-control and investment-screening measures, producing a coherent G7-plus framework for managing the China relationship. The risk is that Trump-2 transactional bargaining produces selective US-China accommodations (semiconductor licensing, agricultural commitments) that leave the EU exposed to a Chinese strategy of selectively cultivating European business while pressuring through retaliation. The European Commission's "open strategic autonomy" doctrine, reiterated by Šefčovič and Kallas through 2025, is the EU's attempt to position between the two poles.

Third, whether the next European Commission's industrial-policy execution can deliver on the positive side of de-risking. The Draghi Report's €750–800 billion annual investment requirement remains the structural benchmark. The Commission's Competitiveness Compass (January 2025), Clean Industrial Deal (February 2025), and Affordable Energy Action Plan have set programmatic frameworks. The Member-State capacity to deliver — through EU-budget contributions, Multiannual Financial Framework restructuring, joint borrowing instruments, and Member-State industrial-policy financing — has been the constraint. The June 2024 European Parliament elections returned a Parliament with a strengthened EPP, a weakened Greens, a strengthened far-right, and a centre-left under pressure. The political coalitions available to fund Draghi-scale investment are constrained. If the EU cannot execute the positive industrial-policy pillar, the de-risking framework reduces to its defensive instruments alone, and the German-industry pragmatist critique — that defensive instruments without competitive investment produce worse outcomes than calibrated engagement — gains ground.

The CAI will not be ratified on its existing terms. The Chinese counter-sanctions on European Parliamentarians and entities will not be unilaterally lifted absent a broader political shift. The EV duties will remain in force absent a price-undertaking agreement. The CRMA will continue Strategic Projects designation absent capital constraints that may emerge from Member-State fiscal positions. The Forced Labour Regulation will enter operational enforcement in 2026–2027 and will produce cotton and polysilicon market interventions. Hungary will continue to host Chinese EV production and to contest EU consensus on China-related measures. Lithuania will continue to host the Taiwanese Representative Office. The structural pattern of the de-risking equilibrium will hold.

The deeper question — and the question this document cannot answer because it is a forward-looking judgment rather than a historical record — is whether the de-risking architecture is the foundation of a stable EU-China modus vivendi for the late 2020s, or whether it is the intermediate stage of a longer-running deterioration toward a more comprehensive economic separation. The institutional answers diverge. The Brussels de-risker account treats the current equilibrium as stable and operationally adequate: the EU has established the instruments necessary to manage targeted dependencies while continuing to engage on global commons. The Beijing account treats the equilibrium as unstable and likely to deteriorate toward decoupling unless reversed by a Brussels recognition that Chinese competitiveness is structural. The German-industry pragmatist account treats the equilibrium as managing toward a worse outcome and calls for reorientation. Each account is internally coherent. The empirical evidence over 2023–2026 has been consistent with the de-risker account's claim that the relationship can be managed within the instrument architecture; whether that pattern persists through the 2027 Strategic Compass review, the 2029 EV-duties expiry review, and the 2030 CRMA benchmark assessment will determine which account proves correct.

What is not in dispute is that the 30 March 2023 von der Leyen speech inaugurated a phase in EU-China relations whose operational legacy is now durable and whose political-economy contradictions remain unresolved. The de-risking doctrine has proven operationally robust. Its political-economy sustainability is the open question of the late 2020s.

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