On 4 April 2023, the Centre for Security, Strategy and Technology (CSST) at the Observer Research Foundation (ORF) held a closed interactive roundtable to discuss Europe and India’s responses to China’s rapid technological expansion, as well as the burgeoning possibility of the Western world decoupling from China and its tech prowess over geopolitical and geoeconomic security concerns. About 20 scholars and experts from Europe and India participated in person and online in this hybrid event, which followed Chatham House rules, and the interventions followed an open floor, unprompted format. The discussion was divided into two parts of 45 minutes each:
- Part 1: Outlining the China Challenge: Perspectives from Europe and India
- Part 2: Shared Solutions: The Search for Common Ground
Thematic background
2023 has already been a tumultuous year for tech and geopolitics. The United States has been tightening restrictions on China’s semiconductor industry, the Netherlands has recently joined this effort, and Japan and South Korea are in talks as well. While the G7’s announcements regarding Build Back Better World (B3W) and the Partnership for Global Infrastructure and Investment (PGII) are awaited, a parallel story is unfolding vis-á-vis Europe and China.
In early 2023, Dubravka Šuica, Vice-President of the European Commission, encapsulated a key inflection point in the European Union’s (EU) approach to its own resilience and its choice of partners: “Democracy cannot be taken for granted.” This builds upon a critical announcement in September last year by Ursula von der Leyen, the President of the European Commission, of a ‘Defense of Democracy’ package to root out covert foreign influence, stating, “We will not allow any autocracy's Trojan horses to attack our democracies from within.”
The EU member states have been contending with the rise of China as a tech power and changing geopolitics viz the US-China competition in their own ways. The EU President, Ursula von der Leyen was in Beijing last month and announced a posture of “de-risk, not decouple” on 30 March. While this may be seen as a more practical posture than its partner across the Atlantic, questions remain on what this new position entails.
Yet, the EU does not act like a bloc: Its members are not completely aligned on the threats posed by dependence on China. A topical example of this is that French President Emmanuel Macron was in Beijing at the same time as President von der Leyen, but with a very different agenda, and to a wildly different reception. With this background, how are different EU states responding to ChinaTech? What can we expect from the Defense of Democracy package and which sectors are most critical to this effort? Does China need Europe more than Europe needs China for its tech-led growth?
Identified challenges
Participants in the roundtable started by discussing how China’s cyber operations were mostly intended for intel and reconnaissance, and less for disruption - this is marked by how the Chinese have often reached out to negotiate mutual assurances for the protection of critical information infrastructure. However, differing views with China on the world order hamper this exchange, and given several suspected cyber intelligence operations, both sides may not be on the verge of closing their communication gaps.
China’s notable governance structure was also brought under scrutiny, and it was stated that China’s priority is to maximise the space for its power with little concern for the privacy and safety of its citizens. As a result, China does not represent a global model of cyber sovereignty, and its expansion is about control rather than empowerment, as evidenced by frequent violations of other countries’ sovereignty. This was seen to be supplemented by COVID-19, which has impacted Chinese diplomacy and made it more aggressive. As a result, Chinese companies and benign financial investments from China have been increasingly securitised on the suspicion of them being an elaborate front to expand its sphere of influence on global tech flows.
Some experts believed the decoupling was more of an issue of framing a narrative rather than an issue of substance. Complete decoupling from China and its tech empire may not be a possibility for Europe at this point, since countries are not easily able to replace the impact of Chinese infrastructure. Thus, Europe’s ‘de-risking’ strategy, congruent to US President Biden’s ‘selective decoupling’ approach, has been seen as a marginally better alternative and is mainly perched around not losing the tech edge over China and geopolitical security considerations stemming from Chinese tech trade expansion.
However, discussants believed that it would take some time till Europe finds a way to substantively oppose China, especially since countries like Germany see themselves as systematic competitors of China if that is indeed a part of the de-risking. How should countries weave a common thread on what cyber sovereignty is? Do countries against the China model understand what they are up against? Finally, what does this perceived coalition of democracies value? These are questions which will need to be grappled with as the de-risking strategy unfolds further.
India’s similar decoupling with China post the Galwan crisis, as well as its subsequent banning of Chinese apps and limiting of Chinese tech companies and investments in the Indian market, was pointed out as an analogous situation, and India’s current stance balancing between national security and economic opportunity with respect to China was highlighted. The participants believed India’s priority is de-risking as well, and thus lends commonality between Europe and India on the risk perception of Chinese technology flows.
Proposed solutions
When discussing possible solutions to the China question, experts pointed out that it would be essential to think of which sectors would be seen as strategic ones, since de-risking would entail largely strategic sectors. For instance, shipping is not seen as a strategic sector, but China’s dominance in the transfer of technologies with the China Ocean Shipping Company (COSCO) might become a hindrance to Europe’s de-risking. Another important facet to look into was the EU-wide screening of Chinese foreign direct investment (FDI). It was also suggested that Europe should perhaps adopt a phased approach to de-risking to reduce uncertainty for the private sector.
The discussants agreed that while there was a perceptual divide between India and the EU on Chinese tech due to China being on the Indian border, there would be utility in collective and collaborative solutions for both India and the EU, especially since neither India nor the EU has global tech behemoths like the US and China. Hints of this have already been seen in the recent past, with initiatives like the EU-India Connectivity Partnership and the EU-India Trade and Technology Council. The participants concluded by observing that the EU is inching towards a mindset change wherein it now focuses on Indian tech as an alternative to China, and developments like India’s Digital Personal Data Protection Bill and further tech cooperation and bilateral ties between India and the EU will affect exactly how the two will align their agendas.
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