EU’s Derisking From China: A Daunting Task
With economic security as a major concern, the EU has recently turned to “derisking” from China. The EU strategy entails reducing critical dependencies and vulnerabilities, including in EU supply chains, and diversifying where necessary, while recognizing the importance and need to maintain open channels of communication.
An analysis of the bilateral trade relations over the past decade suggests that derisking still remains elusive. In contrast to the USA, the EU has not reduced the share of Chinese products in its imports. Overall, there has been little or no diversification in some unsophisticated, labor-intensive, low-value-added sectors where it was not expected. At the same time, the EU’s exports to China have remained relatively constant, although direct export exposure to China differs significantly across member states. The picture emerging from the observation of direct investment flows to China is more mixed, with EU greenfield investments on the rise, while European M&As have slowed sharply. Moreover, there is a growing concentration of EU FDI in China among a small number of firms, countries, and sectors. While the jury is still out on the success of the EU’s derisking attempts, many factors do not bode well for the future of the strategy. For derisking to materialize, several conditions need to be met, including better and tighter coordination between EU member states, and this is no easy task. However, with problems and possible solutions now clearly identified, what remains to be done is to walk the talk.
Nicolas, F. (2025, October). EU’s Derisking From China: A Daunting Task. Asia Europe Journal, 23 (2-3). https://doi.org/10.1007/s10308-025-00750-3
Available in:
Themes and regions
Share
Center for Asian Studies
Asia is a nerve center for multiple global economic, political and security challenges. The Center for Asian Studies provides documented expertise and a platform for discussion on Asian issues to accompany decision makers and explain and contextualize developments in the region for the sake of a larger public dialogue.
The Center's research is organized along two major axes: relations between Asia's major powers and the rest of the world; and internal economic and social dynamics of Asian countries. The Center's research focuses primarily on China, Japan, India, Taiwan and the Indo-Pacific, but also covers Southeast Asia, the Korean peninsula and the Pacific Islands.
The Centre for Asian Studies maintains close institutional links with counterpart research institutes in Europe and Asia, and its researchers regularly carry out fieldwork in the region.
The Center organizes closed-door roundtables, expert-level seminars and a number of public events, including an Annual Conference, that welcome experts from Asia, Europe and the United States. The work of Center’s researchers, as well as that of their partners, is regularly published in the Center’s electronic journal Asie.Visions.
Japan’s Energy Policy after Hormuz. Security, Competitiveness, and Decarbonization
The 2026 Hormuz crisis has strengthened rather than weakened the rationale for Japan’s decarbonization strategy, contrary to what might have been expected. Rather than energy policy supplanting climate policy, the two should actually be viewed as inseparable.
Japan and Nuclear Weapons: Between Extended Deterrence and Normative Dilemmas
Since the late 1950s, Japan’s nuclear weapons policy has been based on the coexistence of two competing normative rationales: the rejection of nuclear weapons, rooted in the legacy of Hiroshima and Nagasaki, and the recognition of the central role of US extended nuclear deterrence for Japan’s security.
Japan’s Defense Industry Goes Global: Ambitions and Challenges
Fragmented Europe: Dealing with China as a technology and innovation power
How is Europe navigating China’s ascension as a technological power? The latest report by the European Think-tank Network on China (ETNC) provides a nuanced account of a converging, yet still fragmented approach across 22 countries.