Europe Still Has Leverage Over China

This analysis argues that Europe's China policy has been based on outdated assumptions of inevitable Chinese growth and liberalization. It highlights China's mounting structural pressures—aging society, property crisis, weak consumption, high debt—which paradoxically fuel domestic control and assertive foreign policy. China's weak demand pushes excess capacity abroad, threatening European industry. However, the EU retains leverage: China needs access to the European Single Market, especially as the US market tightens, and still depends on European research and technology. The article recommends a pragmatic, leverage-based strategy: protect technological advantages, diversify supply chains, create credible escalation tools (e.g., Anti-Coercion Instrument), and tie dialogue to concrete demands like curbing export surges and dual-use goods to Russia. It warns that inaction risks eroding Europe's industrial base and democratic credibility.