Implications for the UK of Europe’s approach to China and economic security

China now poses a deindustrialisation-level shock to Europe’s economic future. The external impact of Chinese overcapacity, involution, and Beijing’s technological leadership and supply-chain dominance in critical future technologies is presenting an existential threat to Europe’s industrial base. The EU is weighing new measures in response, including stricter investment screening, European preference in procurement, a new economic security doctrine, and more assertive use of trade instruments. At the same time, Beijing has made clear in the blueprint for its 15th Five Year Plan that it is not changing course. It is doubling down on an investment-led industrial strategy centered on technological self-reliance and global leadership, a path that is set to deepen structural trade imbalances, supply chain vulnerabilities, and geopolitical tensions.

In addition, Europe is thinking through the shifting risk assessments and approaches to cyber vulnerabilities that result from China’s deepening collaboration with Russia, which bolster existing concerns about China’s presence in European infrastructure – from telecoms to the grid to transportation networks – as well as the implications of European research and commercial collaborations that contribute to Sino-Russian military industrial capabilities.  

How will these dynamics reshape Europe’s political economy and economic security landscape? What does a renewed EU industrial policy, including local-content preference, mean for the UK’s economic and trade relationship with Europe? How should the UK shape its evolving China policy in response to this new strategic reality, including potential US–China deals or shifts in Washington’s stance on China? How can the UK best work with the EU and member states to coordinate approaches to China while safeguarding its own economic resilience?