European Commission identifies four technologies to de-risk relations with China

The European Commission has released a preliminary list of four high-risk technology areas regarding potential misuse by autocratic regimes and human rights violations.

These areas include cutting-edge microchips, AI-powered systems, quantum computing, and genetic engineering. The Commission will conduct an internal analysis with the 27 member states and the private sector to finalize a list of high-risk technologies by spring. This designation could lead to restrictions such as trade bans and investment screening. However, resistance is expected from some capitals concerned about Brussels interfering in national security matters.

This development is part of the ‘de-risking’ strategy initiated by European Commission President Ursula von der Leyen to address vulnerabilities and dependencies accumulated through decades of complacency in the free market. While China is not explicitly named, its influence and practices are indirectly acknowledged. The EU and its G7 allies have accused China of repression, coercion, retaliation, and disinformation. The EU aims to establish buffers to mitigate potential reprisals and disruptions in supply chains and safeguard national security, industries, and jobs.

Member states, experts, and the private sector will provide feedback and insights into these technologies’ risks and side effects. Discussions will also address other ‘critical’ technology fields, including virtual reality, cybersecurity, sensors, space navigation, nuclear reactors, hydrogen, batteries, drones, and robotics.

Why does it matter?

Once the final list is published, possible actions include promoting domestic alternatives, partnering with like-minded countries, and protecting against economic threats. Stricter export controls and outbound investment screening are being considered, although certain member states may resist due to concerns about financial consequences. This shift in European thinking reflects a departure from the previous belief in open markets and low tariffs as precursors to the spread of liberal democracy. Instead, the focus is now on recognizing the role of technology in defining global power dynamics. While some companies may be hesitant to support the de-risking efforts, many EU firms have yet to plan a reduction in their reliance on China.