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Current Affairs

To negotiate with China, Europe must first figure out what it wants

The clock is ticking: the European Union has about two years to decide if it is willing to make the sacrifices and take the risks…

By Samantha Johnson / May 8, 2026
The clock is ticking: the European Union has about two years to decide if it is willing to make the sacrifices and take the risks necessary to become the economic and political power it envisions itself to be. The EU’s proposed Industrial Accelerator and Cyber Security acts are up for negotiation within the bloc’s policymaking bodies. In around two years’ time, we will know their final form.

Beijing has two years to influence this: that work has already started with carrots – proposals for a trade agreement with Europe – and sticks, in the form of new legislation to punish companies that threaten Chinese interests.

That Beijing will put its own interests first is no surprise, but Europe must use the pressure from Beijing to its advantage and finally decide how it engages with China. If Europe does not act now, it will drift into geopolitical insignificance and economic decline.

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Chinese President Xi Jinping has spoken of “changes unseen in a century”, but it is US President Donald Trump, through the Persian Gulf crisis and other events, who has further accelerated change and dramatically increased the scope of disruption. From recent discussions I had in Beijing and Shanghai, it is apparent that as a result of global chaos, Beijing has gained renewed confidence that its industrial policy-driven, security-centred approach has been justified all along.
Beijing has increased export controls and sought to prevent companies from harming Chinese interests by complying with foreign sanctions. The impacts of the last year may come to define the century ahead, as alliance politics and the rules of engagement for international business are reformulated for the increasingly politicised global economy.

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From the Middle East to the Indo-Pacific, the perceived recalibration of alliances is striking. China seeks to avoid taking sides, ostensibly in view of its relationship with the US, but first and foremost because Beijing prioritises stable, diversified supplies of energy resources, alongside technological and agricultural supply chain inputs.

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