EU’s plan to protect its technology from China

In an effort to protect its technological advancements from potential threats, particularly from countries like China, the EU is implementing its Economic Security Strategy. This strategy, set to be unveiled on Tuesday, aims to prevent the misuse of technology for military purposes by rival nations. While the strategy itself is not a formal legislative proposal, it serves as a ‘communication’ outlining the recommended approach for EU member states when discussing their relationship with China in Brussels next week. The strategy proposes various measures, including screening outbound investments, implementing export controls, and scrutinising foreign students studying technical subjects. However, the EU Commission faces the challenge of striking a delicate balance among the diverse interests and national competencies of its 27 member states, each with varying levels of exposure and dependence on China.

Amid rising concerns over China’s influence, the Dutch government has emerged as one of the strongest voices advocating measures to counter this perceived threat. Specifically, the Dutch government is contemplating a ban on Chinese companies from acquiring advanced lithography tools produced by ASML, crucial for semiconductor manufacturing. Although the Netherlands initiated this action independently, they have also sought support for similar restrictions at the EU level. However, EU officials have indicated that finding a straightforward approach to implement such restrictions across the EU poses challenges.

The EU does regulate exports of specific ‘dual-use’ goods that may have military applications, but this does not encompass emerging technologies. An EU diplomat indicates that increased cooperation among member states is more probable than relinquishing export controls entirely. The member states must carefully assess which risks they wish to mitigate and whether current measures are adequate. The Commission may also propose screening foreign students intending to pursue studies in technical fields, which is being considered by the Dutch through proposed legislation.