An Analysis of US-European Strategic Collaboration in Economic Competition Against China

Europe as an important part of the US-led global strategic alliance has been a target for US attempt to include in its strategy as a counterweight against China in the context of intensifying China-US competition and the prolonged Russia-Ukraine conflict， so as to form the US global strategic collaboration architecture to contain China through the echoing of the US-European strategic collaboration with the QUAD and the AUKUS painstakingly managed by the US. Meanwhile， the changing situation has forced the EU to reflect on its vision of strategic autonomy and to see the US as Europe’s most powerful and most important strategic partner. Although there is no fundamental strategic security conflict between the two sides， China and Europe witness an increasing evident competition in the economic sphere. In that context， Europe is gradually moving closer to the US and their strategic collaboration against China is becoming increasingly institutionalised. However， there’s still a lack of trust between the US and Europe. Since mid-September 2022， the European energy crisis and the US Inflation Reduction Act have resulted in a deepening of existed conflicts between the two sides， and the uncertainty of US-European strategic collaboration against China has become more pronounced.

US-European Consensus on China Spurred by Russia-Ukraine Conflict

As China’s technological level， economic size and international influence all continue to grow， the US and Europe gradually see China as an important rival in international economic and strategic competition. The Biden administration views China as the biggest geopolitical threat faced by the US in this century， while the EU has defined China as an economic competitor and institutional adversary since 2019. After the outbreak of the Russia-Ukraine conflict in February 2022， US Treasury Secretary Yellen， Secretary of State Blinken and others have repeatedly signalled to Europe that they want both sides to take concerted action to deal with the challenge from China， which has been well understood and followed closely by the European political elites.

From February to the end of 2022， the US and European policy makers met frequently， with at least one bilateral dialogue at deputy ministerial level or higher per month. Through these bilateral meetings and communications， the US and Europe have intensified their consultations and exchanges of views， so as to form a strategic consensus on economic competition against China. The US and Europe believe that， on the one hand， economic globalisation and global governance through universal multilateralism are no longer sustainable and must be replaced by small-group multilateralism; on the other hand， it is preferable to sacrifice economic efficiency in order to significantly reduce dependence on China and to increase supply chain resilience in order to ensure their own economic security. In other words， the US and Europe see each other as partners with similar ideology and as actors that can be trusted geopolitically. Therefore， it’s necessary for both sides to work together to build an exclusive clique or club in technological research and development， industrial upgrading， trade and investment， foreign development assistance， among other areas. Within the clique or club， they have formed a structure without tariff barriers for close cooperation， while outside the clique or club， they jointly adopt coercive or confrontational and forceful means to restrict or even undermine China’s economic development， thus building their own geostrategic advantage.

US-European Collaboration against China in Technological and Industrial Spheres

The emerging technologies and frontier industries represented by artificial intelligence are drastically changing the face of economic operation， with semiconductor chips being an important carrier of artificial intelligence technology. Therefore， the US and Europe are currently both focusing on the semiconductor industry and attempting to build a bilateral collaboration structure against China. The 2022 chip bills introduced in the US and Europe both target at China. The European Parliament released a study report on the European Chip Act on July 7， 2022， pointing out the necessity to properly address the “new geopolitics of the supply chain” in order to reduce dependence on China. The Biden administration， for its part， has made clear that one of the purposes of the Chips and Science Act is to “strengthen the supply chains and counter China”. In October the same year， the Biden administration issued programmatic documents including the National Strategy for Advanced Manufacturing and the National Security Strategy， arguing that the semiconductor industry determines the international competitiveness of the US economy and listing it as one of the main points of focus for carrying out strategic competition against China.

In this context， the EU in hope of obtaining the US assistance and support in the semiconductor industry has clearly put forward the concept of a semiconductor partnership， which envisages collaboration with like-minded partners such as the US， Japan， ROK and Taiwan of China， in order to build a resilient semiconductor supply chain， which has gained the US approval. At the second and third meetings of the US-EU Trade and Technology Council in May and December 2022 respectively， both sides made clear their intention to increase the transparency and resilience of their respective semiconductor value chains， to set up an early warning mechanism for changes in semiconductor production， and to develop production collaboration systems. In August， the Biden administration put forward the concept of the “chip 4 alliance” to collaborate with Japan， ROK and Taiwan of China on chip development and production. Europe followed suit， introducing the EU-ROK Digital Partnership in November. The US and Europe are currently discussing on the vision of an “international partnership on semiconductors” to accelerate the formulation of a new policy structure.