RED THREAD: China steps back from globalisation

The thread of the week

No white smoke rises from Beijing’s Great Hall of the People when China finalises its five-year plans. But this year’s roadmap, endorsed by the National People’s Congress last month, sends a clear signal: China is preparing for a world where it cannot rely on others.

Even as Beijing criticises Europe for “protectionism,” it is accelerating its own turn inward. The latest plan shows a clear pivot towards self-reliance – what analysts describe as a “fortress economy.”

What began as an industrial policy goal has hardened into something more defensive: insulating China from external shocks by reducing dependence on foreign technology, supply chains and markets, as MERICS analyst Nis Grünberg argues.

Beijing is doubling down on semiconductors, artificial intelligence and advanced manufacturing to replace foreign chokepoints with domestic capacity. At the same time, it aims to diversify imports away from politically risky partners and ensure that no single disruption can cripple production. While exports have sustained growth, the plan makes clear that domestic demand should become the primary engine.

This shift reflects a more volatile global environment than when the previous plan was endorsed in 2021. Pandemic disruptions, supply chain shocks and rising geopolitical tensions have reinforced a central concern in Beijing: vulnerability. At its core is the unstable relationship with the US, particularly under Donald Trump, and the risk of sudden restrictions on critical technologies.

From Beijing’s perspective, interdependence no longer guarantees security and prosperity; it creates exposure.

That logic runs throughout the plan. References to artificial intelligence, “high-quality development,” and scientific innovation point to where resilience will be built. The focus is not just growth, but control over key technologies, infrastructure and the broader direction of the economy.

Yet constraints remain. China still depends on external sources for advanced chips, data infrastructure and elements of AI. It has also struggled to boost domestic demand while facing an ageing and shrinking population.

This inward turn contrasts with China’s external messaging. State media continues to portray Beijing as a defender of globalisation, casting Western economies as retreating behind barriers.

Nowhere is this tension clearer than in China’s relationship with Europe. The EU remains a key trading partner but is also a growing target of criticism. Efforts in Brussels to strengthen economic security – from trade defence tools to restrictions in sensitive sectors – are often labelled protectionist.

Just this week, Global Times, the Communist Party’s state-media mouthpiece, accused the bloc of “self-isolation” and discrimination against Chinese companies, insisting that “interdependence is not a risk, and the intertwining of interests is certainly not a threat.”

That critique now sits uneasily alongside China’s own trajectory. The 15th five-year plan seeks to reduce external dependence in many of the same areas.

The difference lies mainly in the framing: Brussels calls it de-risking, while Beijing dubs it resilience.

From Asia

Prévot in Beijing

Belgian Foreign Minister Maxime Prévot travelled to China this week with stops in Hong Kong, Shanghai and Beijing, where met his counterpart, Wang Yi.

In a press release ahead of the trip, Prévot described China as “an indispensable partner,” while stressing the need for a relationship that is “clear and balanced.” A Chinese foreign ministry spokesperson, cited by China Daily, characterised Belgium as an “all-round friendly cooperative partner.”

Prévot is expected to raise the EU’s trade deficit with China, which reached €360 billion in 2025, and explore ways to rebalance it. He is also likely to address broader geopolitical issues, including de-escalation in Iran and Beijing’s support for Russia’s war economy.

China tightens screws on EU defence

China escalated trade tensions with Brussels by placing seven European defence companies – including Belgium’s FN Herstal and Browning and Germany’s Hensoldt – on an export control list, cutting them off from Chinese dual-use goods, Euractiv’s Pietro Guastamacchia reports.

The move, framed by Beijing as a matter of national security, comes in direct retaliation for the EU’s latest sanctions on Russia, which targeted Chinese firms accused of aiding Moscow’s war effort.

While European officials downplay the immediate impact, the decision underscores a deeper vulnerability: Europe’s lingering dependence on China for critical components, particularly in drone production, where industry figures warn supply chain risks are becoming increasingly acute.

EU mission struggles to log in

Opening an account on WeChat, China’s most widely used messaging platform, has become an “act of diplomacy,” the EU’s mission to China said in a post to X on Tuesday.

In a social media video highlighting its experience, the mission said it had been attempting to register an official WeChat account since October 2025. The effort, however, ran into administrative obstacles. According to the delegation, Chinese authorities advised it to contact the foreign ministry, which in turn dismissed the matter as one for a private company.

The mission said the lack of approval had, in effect, “technically prevented” it from establishing a presence on the platform.

China’s digital backbone: WeChat packs payments, shopping and public services into a single mega-app with over a billion Chinese users. Nothing comparable exists in Europe.

From Europe

Brussels rebukes Beijing over ‘Made in Europe’

The European Commission pushed back this week against Beijing’s criticism of its ‘Made in Europe’ law, arguing that the rules comply with international law and are justified by China’s limited market access for European firms, Euractiv’s Thomas Møller-Nielsen reports.

On Monday, China’s Commerce Minister Wang Wentao condemned the legislation, known as Industrial Accelerator Act, claiming it violates World Trade Organisation rules and discriminates against Chinese companies. Beijing also warned it could take countermeasures if the law is adopted.

“It’s about reciprocity,” a Commission spokesperson said on Monday. “We are one of the most open markets in the world, with the largest network of free trade agreements.”

Senegal defends EU tender amid China concerns

Senegal’s transport minister has defended an EU funded bus procurement process amid concerns in Brussels that a Chinese state-backed bidder is likely to win the contract, telling Euractiv’s Magnus Lund Nielsen that the tender complies fully with procurement rules.

“The procedure is conducted rigorously and in strict compliance with established rules,” said Yankhoba Diémé. He added that Senegal remains free to pursue industrial partnerships with countries without such discussions interfering with its procurement processes.

His comments follow earlier reporting by Euractiv that CRRC, a Chinese-linked company, was the frontrunner to secure the EU-backed contract to supply buses in Senegal.

Also on Euractiv

Opinion: China is quietly armour-plating its supply chains. Brussels must take note

Alicia García Herrero, senior fellow at Bruegel, argues that China’s new supply chain security regulations risk undermining the EU’s proposed Industrial Accelerator Act by legally constraining companies’ ability to diversify away from Chinese suppliers.

In an op-ed for Euractiv, she warns that without accounting for Beijing’s capacity to impose export controls and penalise foreign interference, the bloc’s flagship industrial policy could prove “aspirational in language but hollow in effect.”