Inexperienced transition on the centre of EU-China tech rivalry

With the geopolitical panorama turning extra unstable by the day, EU relations with China are additionally changing into more and more turbulent. On the core of the rising tensions lies the hunt for tech supremacy in addition to financial and nationwide safety.

“In a world powered by know-how, those that lead are those that management essentially the most essential applied sciences, and their provide chains,” EUcompetition chief Margrethe Vestager mentioned throughout a speech on Tuesday.

With cleantech one of many essential applied sciences for the bloc, Vestager additionally introduced a brand new spherical of investigations into Chinese language producers of wind generators destined for wind parks in Spain, Greece, France, Romania, and Bulgaria.

The rationale behind the probes are issues over unfair competitors because of international subsidies that present non-European producers with a commerce benefit. For example, business foyer WindEurope estimates that Chinese language wind generators are as much as 50% cheaper than their options made contained in the bloc.

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In the meantime, China already dominates photo voltaic know-how manufacturing, accounting for 80% of the worldwide market. Less than 3% of the photo voltaic panels put in within the EU are produced in Europe.

“We are able to’t afford to see what occurred on photo voltaic panels taking place once more on electrical autos, wind or important chips,” Vestager mentioned.

China, a “systemic rival and associate”

The Union’s competitors chief has repeatedly characterised China as a “associate, financial competitor, and systemic rival.”

On the one hand, China is a key buying and selling associate, accounting for 9% of the Union’s items exports and over 20% of its items imports. Alternatively, Beijing’s alliance with Russia has raised issues — very like its “more and more assertive actions,” according to EU chief Ursula von der Leyen.

Because of this, the EU has been specializing in de-risking its economic system. The stakes are particularly excessive for clear tech — and the bloc is aiming to make sure enough home manufacturing to cowl at the least 40% of its inexperienced vitality demand by 2030.

The Internet Zero Industrial Act (NZIA) performs an important function in reaching this aim, as does the Essential Uncooked Supplies Act. The primary seeks to spice up home manufacturing capability, whereas the second goals to cut back reliance on third international locations for uncooked supplies. For context, the EU imports 98% of its uncommon earths provide, 93% of magnesium, and 97% of its lithium wants from China.

“Now we have seen how one-sided dependencies can be utilized in opposition to us,” Vestager mentioned. “And for this reason Europe, simply because the US, is reacting.”

A tech race past cleantech

Alongside cleantech, the EU’s listing of essential applied sciences goals to safeguard from China purposes that vary from AI and quantum computing to robotics and biotech.

“The European Union must outline its future relationship with China and different international locations in delicate high-tech areas,” vor der Leyen mentioned final month.

The bloc fears that these applied sciences have dual-use potential, which means that they’ll ship each business and navy purposes. To make sure its personal nationwide safety, the European Fee is already considering allocating funding from its €95.5bn Horizon Europe analysis programme for the event of such dual-use tech.

Semiconductor chips are additionally on the coronary heart of the bloc’s digital sovereignty and financial de-risking insurance policies.

The EU isn’t merely trying to bolster its home chip manufacturing and strengthen its competitiveness within the sector. It’s additionally supporting US efforts to curb China’s semiconductor business.

“We totally agree with the target of depriving China of essentially the most superior chips,” Commissioner for Inner Market Thierry Bretton said final yr.

However whereas the EU might need an opportunity to catch up within the cleantech race, consultants argue that neither the bloc, nor China — and nor anyone else for that matter — have any likelihood for semiconductor independence.