EU enhances economic security, with eye on China

WHILE economic security has long been a key narrative in the US government, its centrality in European politics is of a much more recent vintage. The latest signal of this new political emphasis in the European Union came last Wednesday (Jan 24) with the release of five new initiatives which will deepen the bloc’s more sceptical policy towards China.

The package, aligned with the June 2023 European Economic Security Strategy, doubles down on the potentially significant shift in the EU’s political economy in recent years. The continent has long had a reputation for openness of trade, investment and research, and a key question going forward is to what degree that will now be eroded in a new geopolitical landscape.

The five initiatives are, specifically, a legislative proposal to strengthen foreign investment screening; more effective EU control of dual-use goods exports; options to support research and development in technologies with dual-use potential; enhancing research security across the EU; and better monitoring and assessment of outbound investment risks. The fifth issue of outbound investment is now being consulted on in a new three-month-long review.