EU-China relations at a critical point: European CEOs expect the political situation to worsen.
A majority of European top managers believe that relations between Europe and China could deteriorate in the next three years. This was reported by the news agency Reuters, citing a survey by the European Round Table for Industry (ERT). The EU’s de-risking program and the close relations between Beijing and Moscow are considered to be particularly contentious issues.
According to the survey, which was supported by the CEOs of major European companies ASML and Unilever, 54 percent of respondents fear a deterioration in EU-China relations. Only 7 percent hope for an improvement. It should be stressed that the European Union is China’s largest export market for goods, while China is the third largest market for EU goods.
Reuters also reports that CEOs of major Western companies with a presence in China were more optimistic than their counterparts in Europe, with a larger number not expecting any changes that could worsen relations. However, both groups identified the EU’s de-risking program, i.e. the strategy to reduce dependence on China, especially in terms of critical minerals and technology, as one of the main points of contention.
In addition, CEOs, especially those based in China, see the “new era” of partnership between Beijing and Moscow as a significant risk. China’s relations with the United States and Chinese industrial overcapacity could also be important as other potential areas of conflict in EU-China relations, according to Reuters.
Despite these concerns, however, the survey also has a positive side: European CEOs and chairmen appear to be more optimistic overall than they were at the end of 2021. However, this optimism mainly relates to prospects outside Europe.