This report analyzes the recent strategies of the EU and major European countries regarding economic relations with China, through literature review, statistical analysis, field research, and expert interviews.

Chapter 2 of this report examines the background to the recent changes in the public attitudes towards China and ‘China Strategy’ of Europe. China’s rising economic and diplomatic profile has led to an intensification of the U.S.-China trade dispute since the mid-2010s. The COVID-19 pandemic has turned the U.S.-China conflict into a competition over values such as democracy, freedom, and human rights. The West has intensified its criticism of the Chinese Communist Party regime, including human rights issues and media control. After the outbreak of the Russian-Ukrainian war, China’s pro-Russian behavior further aggravated European perceptions of China, and countries responded by establishing official ‘China Strategy’. Chapter 2 further examines the trends and determinants of public attitudes towards China in major European countries. The trend of rising anti-China sentiment over the past decade was evident in the data from Eurobarometer, Pew Research Center, and YouGov. Regression analyses showed that the trade deficit is the most significant factor in worsening public perceptions of China, while trade with China itself is effective in improving public perceptions. Institutional factors, such as the rule of law, were not significant in the full sample, but were found to be significant in explaining changes in public attitudes after 2017, when the regime competition with China began to intensify.

Chapter 3 then examines the EU’s countermeasures in the area of economic security. Since Von der Leyen took over as Commission President in late 2019, the EU has strategically put in place new regulations and policies in response to the COVID-19 pandemic and the supply chain and energy crises exacerbated by the Russia-Ukraine war. The nature of the EU’s various regulations and actions differs from that of the United States. The U.S. focuses on sanctioning Chinese companies through a combination of presidential executive orders, strong executive branch enforcement, and bipartisan congressional legislation. The EU, on the other hand, focuses on protecting European values and enhancing the competitiveness of its industries and companies, based on the concept of open strategic autonomy. This aligns with the goal of the EU's green and digital transformation plans. The EU places a high value on establishing norms and institutions to create a level playing field based on fair rules in the EU’s Single Market. The EU’s current major economic security initiatives can be understood as a “de-risking” strategy: the EU focuses on enhancing the competitiveness of local industries by applying new standards in areas of high dependency and supply chain risk.

Chapter 4 analyzes the China Strategy of four countries: Germany, which has the closest economic ties to China; France, which is most closely aligned with the EU; the United Kingdom, which is not a member of the EU but is a major European power; and Poland, which represents the emerging economies of Central and Eastern Europe. While Germany has published a national-level China strategy with specific policy responses, France and Poland have not. France has an Indo-Pacific strategy, but no official mention of China, and no clear national public strategy. Poland has no official anti-China stance and balances its relations with both the United States and China. The United Kingdom, a non-EU member, has expressed its position on China in “Integrated Review Refresh 2023: Responding to a More Contested and Volatile World”, defining China as a systemic competitor to the UK, but still emphasing the openness and collaboration. These four major European countries have varying degrees of economic ties to China, as well as their own positions on China, but they also share a similar view of China’s potential influence in economic and security affairs

Finally, Chapter 5 analyzes the impact of the recent changes in Europe’s China strategy on Korea and suggests policy implications. EU’s legistlations may impose the additional costs on Korean companies, for example, to comply with the higher level of mandatory human rights and environmental due diligence required by the Corporate Sustainability Due Diligence Directive and the mandatory reporting of financial contributions under the Foreign Subsidies Regulation. On the other hand, Korean companies can also become cooperative partners with EU companies if they strive to compete transparently and fairly in their business operations in response to EU countermeasures or regulatory enforcement. It is suggested that Korean companies identify the threats and opportunities posed by EU policies and prepare detailed countermeasures. Finally, the China strategies of the EU and major European countries in the field of economic security can be used as an important reference to draw lessons for Korea. In terms of mitigating risks in key high-tech industries and establishing a norm-based trade order, Korea should keep pace with major European countries, while ensuring that this does not interfere with long-standing diplomatic and political relations with Chin