Why the EU Won’t Turn to China and Why China Can’t Rival the US

The prevailing opinion in international media suggests that the European Union (EU) may move closer to China under the pressure of the Trump administration, aiming to safeguard its economic interests. This perspective, however, is rooted in outdated pre-2019 geopolitical assumptions and fails to account for the deeper tensions shaping global power dynamics. China’s role in international relations is increasingly defined by its rivalry with democratic nations, its restrictive economic policies, its mounting internal financial crises, and its reliance on foreign technology—masked as domestic innovation.

China as a Strategic Rival to Europe and Japan

A growing consensus among European and Japanese policymakers sees China as a strategic competitor rather than a viable partner. The EU’s latest foreign policy directive explicitly categorises China as a “strategic competitor” due to its increasingly assertive global posture and non-reciprocal economic practices. Similarly, Japan’s Prime Minister, Fumio Kishida, has openly described China as an “unprecedented and the greatest strategic challenge” to regional stability.

Concerns extend beyond economic competition to China’s systematic efforts to acquire cutting-edge Western technologies. Western governments have reinforced investment screening mechanisms to curb China’s access to sensitive technologies. The U.S. Trade Representative has highlighted Beijing’s state-directed strategies aimed at acquiring intellectual property through aggressive investments and industrial espionage. European officials are drawing parallels between their past over-reliance on Russian energy and their current vulnerabilities to Chinese technology and supply chains. NATO has explicitly recognised China as a source of “systemic challenges” to Western security and values, underscoring a fundamental shift in perception.

China’s Unfair Business Environment for Foreign Firms

Despite Western markets being largely open to Chinese enterprises, foreign companies continue to face an uneven playing field in China. The European Commission has reaffirmed that one of its core priorities is securing fairer competition with China, citing continued discrimination against EU businesses in the Chinese market. While Chinese companies have invested freely across Europe, the same level of access is not afforded to European firms in China.

The latest U.S. government reports on China’s World Trade Organisation (WTO) compliance paint a damning picture: China persistently deploys policies that favour domestic enterprises at the expense of foreign competitors, creating a state-driven economic model that is fundamentally opposed to free-market principles. The Chinese Communist Party (CCP) selectively applies regulatory frameworks to disadvantage foreign firms while enforcing strict market restrictions under the guise of national security. This regulatory opacity leaves international businesses vulnerable to sudden policy shifts and arbitrary enforcement, further discouraging investment.

China’s Economic Downturn: A Self-Inflicted Crisis

China’s economic slowdown is now undeniable, with record youth unemployment, deflationary pressures, stock market instability, and a collapsing housing sector defining its financial landscape. Many experts attribute this economic stagnation to the CCP’s internal policies, rather than external geopolitical tensions. Over the past two years, the Chinese government has doubled down on political control, prioritising ideological conformity over market-driven reforms, thereby eroding private sector confidence.

Independent analysts estimate that China’s true GDP growth in 2024 was between 2.4% and 2.8%, far below the official government target of 5%. Investors and businesses remain wary due to erratic policy changes, such as the CCP’s sweeping crackdowns on real estate speculation, tech conglomerates, and private education providers. The regulatory uncertainty, combined with Beijing’s reluctance to implement large-scale stimulus measures, has led many experts to predict prolonged stagnation, or what some describe as China’s “Japanification” in economic terms—a prolonged period of weak growth, rising debt, and shrinking consumer confidence.

China’s Reliance on Foreign Technology and the Illusion of Innovation

A key misconception propagated by Chinese state media is the notion that China is a leader in cutting-edge technology. While China has made significant advancements in certain fields, its major technological “breakthroughs” often turn out to be repackaged versions of American and Japanese innovations, unveiled in response to external sanctions.

China’s reliance on foreign technology is evident in several key sectors. Despite its push for semiconductor independence, China still depends on Western chip-making equipment, with recent U.S. and Dutch export restrictions severely limiting its access to advanced lithography tools. The AI sector is another prime example—while Chinese firms boast of AI advancements, their models rely on American-designed semiconductors and cloud computing infrastructure.

The recent case of DeepSeek, a Chinese chatbot claimed to be on par with ChatGPT, serves as a case study in China’s technological dependency. Analysts discovered that DeepSeek’s responses were not independently generated but were instead highly reliant on OpenAI’s underlying mechanisms and training methodologies. Similarly, Chinese humanoid robots, widely promoted as domestic achievements, have been exposed as inferior replications based on Boston Dynamics’ open-source designs. Unlike Boston Dynamics’ autonomous robots, these Chinese counterparts are often manually controlled by off-screen technicians—undermining claims of technological self-sufficiency.

These cases highlight a recurring pattern: every time China faces a Western technology ban, it rushes to announce domestic alternatives that later prove to be inferior copies of foreign innovations. The CCP uses such announcements as nationalist propaganda to project an image of self-reliance, even as China’s technological infrastructure remains fundamentally dependent on external suppliers.

The Reality of China’s Global Positioning

While some analysts speculate that Europe might seek closer ties with China due to American isolationism under Trump, this narrative ignores the structural tensions that define China’s relationship with Western democracies. The EU, Japan, and other major economies increasingly view China as a competitor rather than a partner, not just because of U.S. policy shifts, but due to Beijing’s own strategic miscalculations and economic mismanagement.

With China’s economy struggling under self-inflicted policy failures and its “technological breakthroughs” regularly exposed as inferior replications of Western innovations, the notion of China leading an anti-Western economic bloc is deeply flawed. Instead, the CCP’s trajectory points toward increasing isolation, as its economic dependencies and domestic vulnerabilities become more apparent to global observers. Any realistic assessment of China’s position in 2025 must acknowledge these underlying realities rather than relying on outdated geopolitical assumptions.