De-risking with China is not going well for EU

TL;DR Breakdown

  • The EU’s efforts to reduce economic ties with China are faltering.
  • Imports, including sensitive tech, from China to the EU have surged.
  • The US has made more progress in decreasing dependency on China.

Description

The ambitious European Union initiative to minimize its economic dependency on China seems to be unraveling at the seams. Despite overt efforts by the EU to “de-risk” its economic ties due to heightened tensions, evidence suggests the opposite trend: deepening economic interdependence. Increased dependency despite strained relations In the midst of global shifts and political … Read more

The ambitious European Union initiative to minimize its economic dependency on China seems to be unraveling at the seams. Despite overt efforts by the EU to “de-risk” its economic ties due to heightened tensions, evidence suggests the opposite trend: deepening economic interdependence.

Increased dependency despite strained relations

In the midst of global shifts and political maneuvers, China’s export prowess continues to surge. From 2018 to 2022, the value of goods pouring into the EU from the global export juggernaut almost doubled.

This uptick in imports is not just confined to benign merchandise. There are rising imports of phones, computers, and machinery, and alarmingly, there’s a lurking suspicion that some of these imports could be Trojan horses — tools that might allow China to gather crucial state secrets.

Further cementing the EU’s intertwined fate with China is its growing reliance on the East Asian giant for rare earths and critical raw materials.

It’s akin to a tech enthusiast begrudgingly admitting their dependence on the latest gadget; they might not like the implications, but they can’t seem to let go.

US versus EU: A tale of two strategies

Contrast this with the United States, which appears to have a firmer grip on its “de-risking” strategies. Since the imposition of a 25% tariff on a myriad of Chinese imports by the Trump administration in 2018, the US has seen its imports from China drop from 21% to 16% by 2022.

While this might be a veneer, with some Chinese businesses smartly rerouting their supply chains to circumvent tariffs, the intent and direction are clear.

The EU, on the other hand, seems to be moving in a contradictory direction. With the US backing away from Chinese imports, the EU appears to be filling the void.

A notable instance? The automobile sector. European car manufacturers have seen their sales to China skyrocket, as their American counterparts faced barriers.

This opportunistic surge in trade, valued at €24 billion last year, however, could soon face its own set of challenges.

The rise of Chinese carmakers is not just a distant rumble; it’s a roaring engine approaching fast. With three of Europe’s top-selling electric vehicles last year being Chinese imports, the dominance is undeniable.

Navigating the path of de-risking

“De-risking” and “decoupling” have become the buzzwords right now. While the former aims at targeted measures to prevent over-dependency on specific, sensitive technologies, the latter implies a more extensive, comprehensive strategy, like the US’s significant tariffs on Chinese imports.

Yet, whatever the terminology, from China’s perspective, it all sounds eerily like containment.

The EU’s balancing act is evident in its leaders’ statements. While European Commission President Ursula von der Leyen concedes that full “decoupling” from Beijing is unrealistic, she emphasizes a focus on “de-risking” the EU’s economy.

This is further corroborated by a statement from a recent EU summit, suggesting that while the EU acknowledges its vulnerabilities, it has no intention of turning its back on trade with China.

However, with countries like France and Germany taking firmer stances — the former adjusting subsidies to combat Chinese EV makers and the latter explicitly warning its corporations to tread cautiously with their Chinese dependencies — it remains to be seen how this juggling act will pan out.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

文章来源于互联网:De-risking with China is not going well for EU

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年8月9日 07:44
Next 2023年8月9日 08:30

Related articles

  • U.S. thinks it has found a solution to the debt ceiling crisis

    TL;DR Breakdown The U.S. appears to be nearing a solution to the impending debt ceiling crisis, creating optimism for the country’s economic outlook. Federal Reserve officials have been carefully monitoring economic data, including employment and inflation figures, to inform decisions on interest rate policy. Comments from Joe Biden and Kevin McCarthy suggest a potential deal could be reached to avoid defaulting on U.S. debt before the June 1 deadline. The looming cloud of a potential debt ceiling crisis in the U.S. might be dispersing, with a possible solution on the horizon, suggesting a brighter economic outlook for the country. Over the past weeks, the uncertainty surrounding the nation’s capacity to meet its financial obligations has prompted rigorous debates among policymakers and financial analysts alike. Amidst these discussions, the economic data, interest rate policy, and bipartisan agreement are taking center stage, according to statements by U.S. leaders. The role of economic data in U.S. decision-making process Federal Reserve officials have been threading a fine line, keeping a keen eye on economic data to determine the next steps in interest rate policy….

    Article 2023年5月19日
  • Shibarium network hits one million wallets despite challenges

    TL;DR Breakdown Shiba Inu’s layer-2 blockchain Shibarium has reached a milestone figure of one million wallets. Tokens face challenges as volatility increases. Description Shiba Inu’s newly launched layer-2 blockchain, the Shibarium network, has achieved a significant milestone, surpassing 1 million wallets. This remarkable feat comes in a meteoric rise since the network’s relaunch. The official team announced this achievement in a blog post on September 3, signaling the rapid growth of the network. This milestone marks a notable … Read more Shiba Inu’s newly launched layer-2 blockchain, the Shibarium network, has achieved a significant milestone, surpassing 1 million wallets. This remarkable feat comes in a meteoric rise since the network’s relaunch. The official team announced this achievement in a blog post on September 3, signaling the rapid growth of the network. This milestone marks a notable increase in wallet adoption, with over 900,000 wallets added since the relaunch of Shibarium on August 28. Shibarium hit the milestone after two weeks of launch The network was able to hit this milestone within just two weeks of the network’s initial launch, despite…

    Article 2023年9月5日
  • Simultaneous approval of all Ethereum ETFs on the horizon

    TL;DR Breakdown The U.S. Securities and Exchange Commission (SEC) is leaning towards approving multiple Ethereum ETF applications simultaneously. Unlike last year, the SEC hasn’t asked firms to withdraw their applications, hinting at a possible change in stance. Currently, 16 applications for Ethereum or combined Bitcoin-Ether futures ETFs await the SEC’s decision. Description The Ethereum ETF scene is on the brink of a revolution. The U.S. Securities and Exchange Commission (SEC), historically cautious and skeptical about the crypto world, seems to be shifting its stance. The wave of change hints that the agency might give the green light to a barrage of Ether futures exchange-traded fund (ETF) applications. … Read more The Ethereum ETF scene is on the brink of a revolution. The U.S. Securities and Exchange Commission (SEC), historically cautious and skeptical about the crypto world, seems to be shifting its stance. The wave of change hints that the agency might give the green light to a barrage of Ether futures exchange-traded fund (ETF) applications. The Flood of Applications: What Changed? Over the past several months, a barrage of applications…

    Article 2023年8月20日
  • Avalanche’s HyperSDK: A game-changer in blockchain technology

    TL;DR Breakdown Avalanche’s HyperSDK testnet reaches an impressive 143,322 transactions per second, surpassing major blockchain players like Ethereum and Solana. The HyperSDK framework simplifies and accelerates custom VM development, with blockchains functioning as versatile subnets called HyperChains. Description The blockchain world is exciting as Avalanche’s HyperSDK blockchain upgrade achieves a staggering 143,322 transactions per second (TPS) on its testnet. This breakthrough is a testament to the relentless pursuit of innovation by Ava Labs, the team behind Avalanche. The HyperSDK upgrade promises to revolutionize how developers approach blockchain development, offering a high-throughput framework that … Read more The blockchain world is exciting as Avalanche’s HyperSDK blockchain upgrade achieves a staggering 143,322 transactions per second (TPS) on its testnet. This breakthrough is a testament to the relentless pursuit of innovation by Ava Labs, the team behind Avalanche. The HyperSDK upgrade promises to revolutionize how developers approach blockchain development, offering a high-throughput framework that paves the way for creating custom virtual machines (VMs). Contents hide 1 Setting new benchmarks in transaction speeds 2 HyperSDK: Simplifying and accelerating blockchain development 3 The future of…

    Article 2023年9月11日
  • Apple swiftly purges fake Trezor app from App Store

    TL;DR Breakdown Apple has removed a fraudulent app posing as the cryptocurrency hardware wallet Trezor from its App Store. The scam app, “Trezor Wallet Suite,” was exposed by Rafael Yakobi, a managing partner at Crypto Lawyers. Despite Apple’s immediate action, another potential rogue app, “MyTREZŌR Suite: One Edition,” was found in the App Store. Description In a response to an emergent security threat, Apple Inc., the technology behemoth, has removed a fraudulent application posing as Trezor, a reputed cryptocurrency hardware wallet, from its App Store. Despite this prompt action, investigations reveal that other counterfeit apps are still at large within the digital platform. Apple’s quick trigger action against fraudulent apps … Read more In a response to an emergent security threat, Apple Inc., the technology behemoth, has removed a fraudulent application posing as Trezor, a reputed cryptocurrency hardware wallet, from its App Store. Despite this prompt action, investigations reveal that other counterfeit apps are still at large within the digital platform. Apple’s quick trigger action against fraudulent apps Rafael Yakobi, the managing partner at Crypto Lawyers, first spotlighted the issue…

    Article 2023年6月23日
TOP