{"id":32709,"title":"Why De-risking from China May Still Lead to De-coupling \u2013 For Certain Key Inputs, but Also for Some Companies","link":"https:\/\/bst-europe.eu\/de\/economy-security-trade\/why-de-risking-from-china-may-still-lead-to-de-coupling-for-certain-key-inputs-but-also-for-some-companies\/","date":"4. Mai 2023","date_unix":1683205208,"date_modified_unix":1748338152,"date_iso":"2023-05-04T13:00:08+00:00","content":"

On March 30th, the president of the European Commission, Ursula von der Leyen, gave a keynote on EU-China relations<\/a>. She emphasized that de-coupling from China \u201cis neither viable \u2013 nor in Europe’s interest\u201d and introduced the concept of \u201cde-risking.\u201d This appears to be a well-chosen term since, economically, – de-coupling from China is neither realistic nor reasonable. However, de-risking may still lead to de-coupling, not only for some critical inputs but also for some companies and their business operations.<\/em><\/p>\n

The EU and China are closely intertwined economically, and both sides have benefited from their interconnectedness. Since Russia\u2019s invasion of Ukraine, however, \u201cde-coupling\u201d \u2013 first put forward in the US<\/a> under the Trump Administration \u2013 has become a buzzword in Europe, too, in the discussions surrounding its increasingly complex and difficult relationship with China.<\/p>\n

Geopolitical and other developments (such as China\u2019s handling of Lithuania<\/a>\u2019s opening of a Taiwan office) have made crystal clear that critical dependencies resulting from close economic interconnectedness could be instrumentalized to achieve political goals. Therefore, it appears vital that the EU identify these dependencies with China and eliminate them.<\/p>\n

De-coupling, however, was not the right term to use here from the start. If taken to its logical end, de-coupling would mean cutting off all linkages between two objects. In this case, these two economic entities would no longer have interconnections, just like de-coupling a carriage from a train.<\/p>\n

It was quickly clear that this could neither be the goal nor was it feasible regarding China. In the absence of an alternative, maybe, the term has persisted until Ms. von der Leyen\u2019s China speech<\/a> coined the term \u201cde-risking,\u201d which should be accomplished through diplomacy on the one hand and economic means on the other.<\/p>\n

Accordingly, de-risking through diplomacy refers to \u201cmanaging this relationship and having an open and frank exchange with our Chinese counterparts,\u201d while economic de-risking consists of four pillars:<\/p>\n