EU losing China tech-race, as Beijing prepares to host German CEOs
China’s clean-tech hegemony poses a threat to Western security, the EU’s anti-trust tsar has warned — in a dig at Germany.
Margrethe Vestager, the EU’s competition commissioner, spoke out on China at Princeton University in the United States on Tuesday (9 April).
She announced a new probe into suspected Chinese state aid to get wind-turbine contracts in Bulgaria, France, Greece, Romania, and Spain.
But she said wind turbines were just part of a wider Chinese "playbook" to drive EU firms out of "critical" industrial sectors.
"The result is that nowadays, fewer than three percent of the solar panels installed in the EU are produced in Europe. We see this playbook now deployed across all clean-tech areas, legacy semiconductors, and beyond," she said.
"It is not only dangerous for our competitiveness. It also jeopardises our economic security. We have seen how one-sided dependencies can be used against us," she added.
China was "a partner, an economic competitor, and a systemic rival, and the last two dimensions are increasingly converging," Vestager said.
Her speech made repeated reference to the Oscar-winning film Oppenheimer about the discovery of the nuclear bomb.
And she framed the global race for domination in clean tech, AI, and internet rule in the same terms as the Cold War-era nuclear arms race and its creation of a new world order.
"Now fast-forward 80 years [from Oppenheimer] ... digital technologies change the world as we know it," she said.
"One thing is clear: in a world powered by technology, those who lead are those who control the most critical technologies, and their supply chains. Chips, batteries, electric cars," she added.
Turning to AI and social media, she also painted "greedy" US tech giants, as well as foreign adversaries, as a potential threat to Western order.
"We saw content pushed to millions by sophisticated algorithms — not because it is true or relevant, but because it is emotionally viral. Think of all the risks that this entails for our democracy," Vestager said.
"We cannot accept to be faced with insane amounts of illegal posts when scrolling on social media," she said, defending recent EU crackdowns on toxic content.
"We cannot accept that platforms’ algorithms are used by foreign adversaries to jeopardise our democracy, through disinformation campaigns. Never. But especially not in the midst of an election," she also said.
The US is holding presidential elections in November and the EU is holding European Parliament elections in June, amid Russia’s track record of interference in both transatlantic votes.
And Vestager spoke the same day Russian and Chinese foreign ministers met in Beijing in their strongest show of friendship since Russia’s full-scale invasion of Ukraine in 2022 — as if to corroborate the EU commissioner’s dark rhetoric on emerging threats.
But Vestager’s emphasis on Chinese tech-dominance also came amid concern that Germany was driving a coach and horses through EU efforts to "de-risk" from China, for the sake of German industry.
China already accounts for 70 to 80 percent of global manufacturing capacity for critical components for electric car batteries, solar panels, and wind turbines.
China also accounted for 91 percent of global investment in clean-tech manufacturing last year to further extend its lead.
But even as China has driven out many European and US firms from the Chinese market after first getting hold of their tech secrets, its special relationship with Germany has blossomed.
"The timing of Vestager’s speech is key ... German chancellor Olaf Scholz is about to leave for Beijing with a delegation of German CEOs," said Agathe Demarais, from the European Council on Foreign Relations, a think-tank.
The CEOs of leading German car, chemicals, and engineering firms Bayer, BMW, Mercedes-Benz, Merck, Siemens, and Thyssenkrupp will accompany Scholz on a four-day trip to China starting 16 April.
"There is no European consensus about the risks that China’s industrial overcapacity pose," said Demarais.
"This highlights diverging degrees of economic reliance on China, with Germany an outlier in Europe. German firms have a huge presence in China, where their annual revenues represent a staggering 6 percent of German GDP (about double the average of Europe’s six largest economies)," she added.