"The Commission wants to restrict China's access to four critical technologies, from artificial intelligence to genetic engineering. It starts with a stress test and decisions should be made in the spring.
The European Commission is pushing ahead with its China strategy. After announcing anti-subsidy proceedings against electric cars from China, the Brussels authority is now targeting critical technologies that it would like to withhold from a strategic rival like China if possible. The European Commission identified ten technologies as sensitive. The European Commission wants to comprehensively analyze four of them together with the member states by the end of the year to determine whether they pose a threat to the EU's economic security.
In addition to modern semiconductor technology, these include artificial intelligence, quantum technology and biotechnology, especially genetic engineering.
The Commission has applied three criteria to select critical technologies: that they can be misused for military purposes and the violation of human rights, and that they can have a transformative effect on sectors or the economy as a whole. It is about securing or expanding the EU's economic pioneering role or at least preventing the EU from falling behind in comparison to China. The security of the supply chains should also be tested.
All of this follows the logic of the new Brussels policy on de-risking, with which the EU is intended to reduce its dependence on China. The background is also the ban that the Netherlands imposed in the spring on the export of chip production machines to China. This happened under pressure from the USA. The Commission wants to better coordinate such steps in the future.
"Economic Security Strategy"
The Commission emphasized several times on Tuesday that the list of critical technologies was drawn up without regard to individual countries and was therefore not directed against China. However, geopolitical aspects did play a role, a senior employee admitted. Commission Vice-President Margrethe Vestager openly said in June when presenting the “economic security strategy” on which the list is based that no other country could be considered as a recipient apart from Russia. The Commission left it open what steps the EU would take if, after the risk analysis, it came to the conclusion that there was a need for action. That should be decided in the spring.
In addition to the targeted promotion of technologies through subsidies and cooperation with third countries, the security strategy also provides for “protective measures”. Export controls would come into question here, but also the new controls for investments by companies in third countries proposed by EU Commission President Ursula von der Leyen. The EU Commission wants to submit a proposal by the end of the year. It follows a whole series of new "trade instruments" that the EU has recently created to take action against China.
Berlin against the new investment controls
On Tuesday, the European Parliament passed the anti-blackmail instrument with which the EU wants to protect itself against China exploiting trade to enforce political interests.
It is uncertain whether the new investment controls can be passed by the European elections in 2024. Berlin is strictly against it. Germany is likely to be severely affected because of the intensive trade and activities of German companies in China. The list of critical technologies was controversial within the Commission. EU Industry Commissioner Thierry Breton is said to have pushed for a longer list.
Those close to him said that the list was not exhaustive. How the EU will deal with the other six technologies on the current list and whether it will also subject them to a risk analysis will be decided jointly by the Commission and the states in the spring. Energy is also on the list.
Regardless, the Commission wants to present proposals by the end of the month on how the EU can protect its wind industry from growing competition from China.
The focus will probably be on states specifically giving preference to EU companies when awarding contracts by tying them to environmental or labor standards.” [1]
1. EU Technologieblockade gegen China. Frankfurter Allgemeine Zeitung (online)Frankfurter Allgemeine Zeitung GmbH. Oct 3, 2023. Von Hendrik Kafsack, Brüssel
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