Weaponise EU market against China or face manufacturing collapse: official think tank

The European Union has been urged to weaponise its giant market to draw concessions from China, whose economic fragility is making it increasingly reliant on rich export markets.

A new report from the European Union Institute for Security Studies (EUISS), the EU’s official think tank, said “China’s weakness creates opportunities” for the bloc to use its chokepoints and leverage to bring Beijing to the negotiating table in a credible way.

With the United States rapidly narrowing for Chinese buyers and sellers, Europe remains the last reasonably open advanced market where they can buy vital technology and sell industrial and hi-tech goods.

The researchers – who are funded by the EU but have full intellectual autonomy – said Europe had been too slow to realise how much leverage this reality bestowed, partly because it overestimated China’s economic strength.

Instead, the EUISS suggested, Beijing’s more assertive international posture was driven by insecurities at home.

As China weaponised its dominance on rare earths and other critical minerals over recent years, Europe did nothing. The study said the EU was too cowed by the prospect of China’s retaliation and a fear of having too many simultaneously open fronts, given the Ukraine war and economic tensions with the US.

South China Morning Post