EU unveils plan to protect economies from rivals. China is a focus, but is not named in the proposal

The European Union wants to protect the bloc’s economies from risks posed by unreliable suppliers in countries that do not share its values, like China

The European Union unveiled a proposal Tuesday to protect the bloc’s economies from risks posed by unreliable suppliers in countries that do not share its values, like China, after the war in Ukraine exposed Europe’s dependency on Russia for oil and gas.

The European Commission, the EU’s executive arm, is trying to develop measures to protect trade and investment, particularly in the tech and communication sectors, that rivals might want to exploit for security or military purposes.

Announcing the proposal, which must be endorsed by EU member countries, Commission President Ursula von der Leyen said “the world has become more contested and geopolitical, and there is a limited set of key technologies that can be used in a different and aggressive way.”

“Given the changing nature of the risks, we now need a strategic vision for how we are going to handle these risks,” von der Leyen told reporters. She said the EU must be “more assertive” in using the tools that it has to tackle the problem and develop new ones.

The plans are being promoted as “country agnostic” because no target nations are mentioned by name, but they dovetail with the commission's new drive to “de-risk” its relations with China without completely “decoupling” as it relies on the Asian giant to tackle global challenges like climate change.

Von der Leyen said that the capital, expertise and research of European companies must not be “abused by countries of concern for military applications.” She raised, in particular, concerns about the security of 5G and 6G telecoms networks.

The commission considers Chinese firms Huawei and ZTE to be high-risk suppliers. In recent days, it endorsed moves by some of the 27 EU member countries to exclude the two companies from their 5G networks.

The aim of the new plans is to make European economies and supply chains more resilient to threats – to resist problems like energy or inflation hikes produced by the war – while keeping trade flowing. Under the scheme, the EU would work with countries that share its economic security concerns.

“We cannot treat a supply dependency on a systemic rival the same as we would treat that dependency on an ally,” commission Executive Vice-President Margrethe Vestager said.

Other risks to be countered include those posed to cyber-security or to critical infrastructure like pipelines, undersea cables, power generators and transport networks. The threats posed by countries using trade or investment to change EU policies would also be addressed.

The challenge will be to unite EU member states, each of which have their own national policies toward countries like China and Russia, around the plans. EU leaders are expected to discuss the scheme at their June 29-30 summit in Brussels.