The EU on Tuesday unveiled a list of sensitive technologies that Brussels says should be kept out of the hands of rivals, as the bloc takes further measures to confront aggressive trade policies from China.
Brussels is building a trade armoury to protect itself – including a tool aimed at punishing nations that seek to pressure member states.
The European Commission published a list of four of the most critical technologies it believes Europe must monitor more carefully because they have the potential to harm the bloc's security when in the wrong hands.
They are advanced semi-conductors used in many of electrical goods, artificial intelligence including cloud computing, quantum technologies, and biotechnologies including genetic modification techniques.
The European Parliament also gave final approval to a mechanism that would allow the bloc to impose tariffs, restrict investment and limit access to public contracts for nations seen as engaging in economic blackmail.
It is a response to a dispute with China over trade restrictions imposed on EU member Lithuania after it strengthened ties with Taiwan.
Europe wants to protect 10 technologies, with four of those highlighted by Brussels as particularly dangerous if they fall into the wrong hands or if the EU remains too dependent on a rival such as China:
— Velina Tchakarova (@vtchakarova) October 3, 2023
1) Semiconductors
2) AI
3) Quantum tech
4) Biotechhttps://t.co/hHFg16UgNd pic.twitter.com/IoVmYmfnhi
China appears worried about the relationship with the EU that has been gradually deteriorating over the last years.
The state-run English-language newspaper the China Daily on Tuesday published a lengthy interview with Asko Aho, who was the Finnish PM from 1991-1995, the time that EU-China relations went into high gear and foreign investment was booming.
Aho maintains that a "decoupling" of the Chinese and EU economies could have adverse effects on the global economy, underlining that both his country and China have benefited from globalisation in the past decades.
And the Global Times, an English-language newspaper that reflects the official line of China's Communist Party, says in an editorial that a "frank, sincere China-EU dialogue" was urgently needed on economic and trade issues.
MEPs were quizzing Dombrovskis on Tuesday about the EU's relations with Beijing following his visit to China last month.
During the trip he raised the issue of Europe's ballooning trade deficit with China, which he said had reached €400 billion.
Although the European Union says it seeks to maintain dialogue with Beijing, Brussels has stepped up its efforts to curtail critical trade with China.
It is part of a strategy of "de-risking" but not "decoupling" from China, says European Commission President Ursula von der Leyen.
She has repeatedly emphasised the need for Europe to produce more on the continent and work with friendlier nations to ensure "economic security", a phrase often used since Russia invaded Ukraine last year.
Following Moscow's invasion, the EU had to quickly find new energy sources after an over-reliance on Russian oil and gas.
Hunt for raw materials
In June, von der Leyen said the EU was looking at a "limited, small set of cutting-edge technologies", adding: "Here we want to make sure they do not enhance the military capabilities of some countries of concern."
EU officials have previously raised concerns that Europe does not have its own way of assessing which technology exports could be damaging for the bloc.
There was no direct mention of China but the target of the tougher measures is clear.
The Commission is working on a proposal on outbound investment that could restrict overseas funding by European companies.
It is already preparing a law to cut its dependence on China for critical raw materials, used to make products like electric cars.
China already moved in July to curb access to two rare metals – gallium and germanium – vital for making semiconductors.
In the latest salvo against China, Brussels opened a probe last month into Chinese electric car subsidies after claims they lead to unfair competition in the EU market.
The investigation triggered fears of a trade war with Beijing, since the EU could decide to impose tariffs on Chinese electric cars above the standard 10 percent EU rate if it concludes there are unfair practices.
