Reality Check on China: Protecting Europe’s Science and Technology Potential

Crafting a robust China policy is at the very heart of the debate on re-thinking interdependence, especially when it comes to investment and scientific cooperation. When drawing up its first-ever national security strategy, Germany should look to its key partner France, where a political debate on China is only beginning to emerge. So far, Paris’ approach to Beijing is missing a substantive discussion around the weight and place of China in the world, as well as on the direction of their bilateral relationship. A lack of knowledge and a general disinterest prevails on the part of political elites and the public more broadly, influenced by often erroneous perceptions. 

In France, the widespread perception is that China dominates the world economy: 48 percent of French people in 2020 considered the country to be the leading economic power worldwide (as compared to 55 percent of Germans), according to the Pew Research Center. Similarly, China is often caricatured as controlling international organizations, dominating entire sectors of global research and providing the largest amount of official development assistance. 

France is not alone in displaying this odd mixture of concern, defeatism and powerlessness. Across the European Union, many seem to believe that Europe is no longer a match for China – largely because of the EU’s economic dependence on Beijing. And it is true that Europeans have long underestimated the consequences of China’s emergence for their own interests. However, it is essential that Europe take a realistic look at its dependencies and recognize its own assets and levers vis-à-vis China. 

A Change of Perspective on China

One of the main strengths that Europe brings to the table: our scientific and technological lead and our capacity to innovate. In this context, the main debate in both France and Germany should not revolve around our ability to change China – even if a political sea change in Beijing is obviously desirable – but rather around how to better protect European interests. 

First of all, we need to gain some perspective regarding our economic dependence. While trade between France and China reached 88 billion euros in 2021, this is roughly the same order of magnitude as France’s trade with Italy (85 billion) or Belgium (83 billion), and lags far behind trade with Germany (150 billion). France’s problem is thus not the amount of trade with China, but rather the massive trade imbalance – with a considerable French trade deficit of 40 billion euros – and the inability to impose upward reciprocity.

Another important factor to consider is the size and relevance of China’s investments. According to the Banque de France, in 2021, the stock of Chinese investments (9 billion euro) in the French market was roughly equivalent to the size of Danish investments, and much lower than the stock of Swiss (92 billion) or Dutch (104 billion) investments. Further, Chinese investments in France created around the same number of jobs as Canadian investments, and four times fewer jobs than German investments. Thus, if we consider China is an important partner, then we should be aware that European countries are by far our most important partners.

Secondly, we should expand the conversation on China to include our mutual interdependencies, and not just Europe’s dependence. To make this happen, China’s supposed lead in research and innovation must be put into perspective. The country remains very dependent on access to foreign technologies, especially innovations in Europe. And in terms of basic research, China is lagging behind: since 2000, only one Chinese researcher has won a Nobel Prize in the hard sciences, compared to 11 French and 14 German researchers.

In an attempt to play catch-up, the Chinese authorities’ latest five-year plan (2021−2025) proposes to increase basic research budgets by 10.6 percent per year, with the aim of increasing the share of basic research to 8 percent of all Chinese research budgets. Even so, this would still fall far behind the 17 percent budgeted for basic research projects in the United States. Similarly, the ​“Made in China 2025” plan – a broad industrial strategy presented by China in 2015 – was clearly aimed at reducing dependence on foreign technologies.

Beijing’s Military-Civil Fusion

China’s tech dependence has led Beijing authorities to implement covert strategies to capture foreign innovations. Since the US and the UK have considerably tightened access to their technologies, continental Europe is the primary target of Beijing’s efforts. It is high time for Europe to wake up to the reality of the Chinese strategy of military-civil fusion (MCF), which aims to use civilian means – especially in the private sector – to further military efforts. Europeans need to be made aware that some investments and international cooperation clearly serve a military purpose.

This was explicitly the case with China’s 2018 acquisition of the Italian military drone company, Alpi. While European states should not resort to extreme measures, it is key to recognize the risk of Beijing using academic exchanges and scientific and technical cooperation as a means of acquiring foreign technologies, sometimes in sensitive areas, for the benefit of China. This is not only a question of industrial, technological and scientific sovereignty, but also of economic competitiveness – and, ultimately, of national security.

To keep European interests safe, we must prioritize the protection of our scientific and technological potential in our relations with China. And this means investing additional resources into serious protective measures. This would help to put an end to a form of hypocrisy: Despite the European embargo on arms exports to China in place since 1989, Europeans have contributed directly and indirectly to the qualitative modernization of the Chinese armed forces.

For example, the Chinese universities that make up the so-called Seven Sons of National Defense, which train Chinese weapons engineers and support military research, have dozens of cooperation agreements with European universities. And the limited means of consular investigations often lead European authorities to misidentify the real military affiliation of researchers applying for visas as part of these cooperation agreements.

Crafting a European Response

The good news is that unlike most politicians, French government agencies are reacting more and more openly to these risks. A classified report on the challenges of protecting knowledge and know-how in higher education and scientific research has been submitted to the French government. In addition, France’s Secretary General of Defense and National Security recently explained to MPs that ​“many Chinese people […] are spying like crazy and are having a field day with entry, insertion and capture attempts.” And the specialists in economic counter-intelligence in the French General Directorate of Internal Security (DGSI) have strengthened their awareness campaign regarding Chinese technology capture in the research world.

European countries urgently need autonomous means to conduct an exhaustive mapping of Chinese actors – particularly those in the academic and research world – to gain a better understanding of China’s MCF strategy and evaluate the sensitivity of existing cooperation. Once developed, this analytical capacity should be shared at the European level. One such attempt can be seen with the Australian think tank ASPI’s initiative, China Defence Universities Tracker. However, while a commendable effort, it is far from complete or sufficient.

Mapping and evaluating the impact of cooperation with China in Europe cannot happen overnight. Thus, it would be in the best interest of France and Germany to discreetly promote such an initiative to their European partners while reinforcing the exchange of best practices with other countries that have long faced similar risks, such as Japan, Australia and Taiwan.

If Europe does not act on the risks posed by China, the United States will not stand idly by and watch. Washington will likely make public the sensitive nature of certain EU-China partnerships to pressure and ultimately block access to US market for some European actors. A June 2022 report by Horizon Advisory on risky links between Airbus and China’s MCF apparatus – made public a few days before the announcement of the sale of 292 A320 planes to Chinese airlines – should set off alarm bells in Europe.