A shift in the European opinions and perceptions of China was first marked by the 2019 Strategic Outlook, where the EU described China as a “systemic rival” and has been furthered since the beginning of 2020 with China’s lack of transparency regarding the pandemic. The sanctions imposed in March 2021 have only cemented a reality that had long been encroaching: the EU is reassessing its China policy.

The exchange of sanctions shows that economic interests may not always overshadow political ones, and in a context of power politics, the increased importance of normative issues is notably pertinent. This is especially the case in areas with moral or ethical implications such as climate change, international law or human rights. The EP’s reaction to the sanctions imposed by China and its ramifications for the final ratification of CAI, demonstrate that the role of human rights in the EU policy towards China has changed over time. As Von der Leyen and Borrell have adamantly stated, the “differences [between the EU and China] are set to remain (…) and must not be brushed under the carpet”. Brussels is likely to continue adjusting its China policy to the circumstances that will arise in future interactions with Beijing.

More recently, tensions between Lithuania and China, after the former upgraded its relationship with Taiwan, are putting pressure for a coherent and proportionate response from Brussels. The Chinese government has imposed unofficial economic sanctions on Lithuania, and as a consequence, impacting the EU’s supply chain and the European single market, which also affects its strategic aspirations of being “geopolitical” and “autonomous”.

On the EU’s side, apart from launching a case against China at the World Trade Organization, the Council of the EU, under the current French Presidency, is pushing for the adoption of an anti-coercion legislation, which would allow the EU to defend its interests and react to foreign economic coercive measures. This tool is circumscribed in the set of initiatives announced by the EU in the aftermath of the 2019 joint communication in order to rebalance the trade relationship with China. As of now, the EU is arming itself with instruments meant to address the challenges posed by China – and potentially other countries in the future – in the fields of 5G, foreign direct investment, foreign subsidies, international procurement and sustainable corporate governance. These developments signal the extent to which trade policy and foreign policy are becoming progressively interconnected and convoluted as EU-China relations evolve.

In this context, and with a more reliable US Administration, an alignment of rhetoric and action between the transatlantic partners is foreseeable despite interests and priorities not always converging. Collaboration efforts are demonstrated by the setting up of the EU-US High-Level Dialogue on China and the EU-US Trade and Technology Council, two channels of diplomatic commitment and communication on pressing issues for both sides. However, the ever-present competition between the US and China highlights the noteworthy difference between Washington’s and Brussels’ approaches to Beijing. The former views its relationship with China through the lens of competition and rivalry, reflecting the threat China poses to the current US-led international system. The EU’s approach reflects instead a complex amalgamation of interests and concerns which might seem contradictory a priori, but represent the dichotomy faced by the regional bloc: attempting to deal with China as a systemic rival or competitor while necessarily stressing the cooperative dimension of the relationship.

As MERICS Analyst Francesca Ghiretti highlights, “the EU’s foreign policy towards China has been developing to respond to what China is today rather than what we would want it to be”. The EU is revising its multi-faceted approach to China to endure the increasingly challenging dynamics in the bilateral relationship as well as the international shift in balance of power. This does not mean a radical change from the threefold framing of China as a partner, economic competitor and systemic rival, but rather an inevitable – and tougher – reevaluation of their fundamental divergences, and, as a consequence, a more confrontational stance in the field of human rights and a more assertive strategy in rebalancing the bilateral trade relationship.

The deterioration of EU-China relations last year stemmed from the public challenge to the EU’s commitment to its foundational values and, more broadly, questioned its role in the international arena as we enter an era determined by the US-China rivalry. In the same way that the political shift of China under Xi Jinping poses numerous challenges to the EU, it may also become the catalyst pushing for reform in Brussels at its core. Now, more than ever, it is vital that the EU assesses its current role in the world, decides how it aims to project its power and equips itself with the tools crucial to reaping the benefits and confronting the challenges of the 21st century.