Last month, Contemporary Amperex Technology Limited (CATL), the world’s largest battery company, started building a massive joint venture plant in Spain. It came weeks after Spain’s King Felipe visited Beijing, seeking a stronger EU-China relationship as US commitments wobble. Except Spain, electrified by the potential job creation, ran into a problem: CATL wants to bring 2,000 Chinese workers to build the plant.
What’s happening in Spain is part of a complicated new showdown between the European Union and China. At one end, China’s demands are forcing Europe to choose between economic security and international relations. At the other end, Europe is opening and closing doors at the same time, squeezing China.
While Spain battles a Chinese company’s labour plans, French President Emmanuel Macron is threatening tariffs unless Beijing fixes its trade surplus with the EU, which reached €306 billion (US$359 billion) last year. It’s a strange move. France wants access to China, but seemingly without allowing more Chinese access to Europe. That may not be possible.
Advertisement
Chinese fashion retailer Shein, for instance, reports 145 million active users from the EU on its platform, around a third of the EU population. The choices of European consumers, not European governments, are drawing China deeper.
And while Brussels bangs the drum of industrial competitiveness and clean energy, Europe is wholly dependent on China for the rare earths that underpin its manufacturing. Moreover, 90 per cent of its installed solar panels are Chinese, making China the foundation of its green transition.
Advertisement
The EU is locking and unlocking hands with China. It has reopened discussions around the Chinese electric vehicle trade after introducing tariffs of up to 45.3 per cent. Almost simultaneously, it has launched foreign subsidy investigations into Nuctech, a Chinese company selling security equipment, and Temu, raiding the online retailer’s office in Dublin.
