New Leaders Forum

EU and China’s Tech Rise

Europe takes a very different approach than the US to addressing China’s rapid rise in science and technology.

China is catching up quickly in terms of technological innovation, and indeed is on the verge of becoming a global leader. This reality has sparked increasing concern over the future of Western leadership in science and technology.

The United States has approached the problem mainly from a national security perspective, trying to limit scientific cooperation with China in order to avoid the transfer of technologies that also have potential military applications. Europeans, in contrast, have turned science and technology cooperation with China into one of the pillars of the so-called strategic partnership that was established between the two sides back in 2003.

While the United States worries about security, economic considerations are the major driving force behind the overall European strategy of engagement with China, and not just in the technology field. China is now the EU’s second biggest trading partner behind the United States, while the EU is China’s No. 1 trading partner. The financial crisis has further strengthened the economic relationship, with successful export-oriented economies like Germany becoming ever more dependent on the Chinese market.

Simultaneously, Beijing is lending a helping hand (and lots of cash) to debt-stricken southern European member states such as Greece and Spain, in an effort to stabilize the euro area economy and thus China’s largest export market.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

But it isn’t just about the money. Most Europeans believe that by engaging China on a broad range of issues, they can help to further open up China and steer its social and economic development in a direction that’s desirable for both sides.

The EU’s policy of dialogue and engagement has undoubtedly suffered its fair share of setbacks, for example on human rights in light of the current crackdown in China on critics of the Communist Party leadership. But in other areas, this policy has been quite successful. Economically, EU companies have reaped great financial benefits, despite ongoing problems with regard to the protection of intellectual property rights, forced technology transfers and market access for European companies. EU-China science and technology cooperation is another success story, and indeed is one of the few areas where the strategic partnership offers some real substance.

For Beijing, the main motivation has always been to acquire high technology that’s essential for the country’s economic development – hardware as well as knowhow. China is striving hard to lessen its technological dependence on foreigners by strengthening its indigenous innovation capacities. However, for the time being, transfers of foreign technology remain essential to China’s economic modernization efforts.

Beijing regularly praises the EU for being China’s largest source of technology imports. According to the Chinese Ministry of Commerce, the EU accounted for 30 percent of China’s overall technology imports in 2009. As Chinese high-tech companies are more and more active in European markets, China’s engagement might become increasingly driven by market access considerations in the future. Gaining access to the Chinese market remains the No. 1 motivation for Europeans, with the EU Chamber of Commerce in China estimating that the Chinese government procurement market alone is worth $1 trillion.

European companies want a piece of that pie. In addition, European researchers are keen to benefit from rising Chinese spending on research and development, especially at a time of austerity measures and spending cuts at home. Chinese R&D expenditure grew by an impressive 22 percent annual average between 2006 and 2010. In addition, Europeans also want to tap into the Chinese science and technology labour force, which is growing rapidly in both quantity and quality.

Last, but not least, Europeans expect that scientific collaboration will make technological developments within China more transparent to the outside world. And while one flagship cooperative project has failed spectacularly, namely collaboration over the Galileo global navigation satellite system, the science and technology relationship remains beneficial for both sides.

Regardless of the motivations, China’s relentless efforts to become a global leader in innovation seem to be paying off. For example, China’s output of research publications has grown more than four-fold between 1998 and 2008, from just over 20,000 papers to more than 112,000 papers. Globally, China ranks second only to the United States by annual output. The number of patents registered in China has also risen considerably, with an average total volume annual growth rate of 26.1 percent between 2003 and 2009. Reuters expects that Chinese patent filings will overtake Japan and the United States this year (having surpassed Europe in 2005), making China the global innovation ‘leader.’ While this says nothing about the quality of Chinese R&D, it certainly suggests a step in the right direction.

Both the EU and the United States should respond to this challenge by improving their own innovative capabilities, instead of following a policy of scientific containment. American attempts to limit scientific cooperation with China will prove as futile and economically harmful as its efforts to constrain Beijing’s military modernization drive. Europeans should therefore maintain their cooperative approach, while maintaining awareness of its potential security implications.


Oliver Bräuner is a Researcher in the China and Global Security Programme of the Stockholm International Peace Research Institute (SIPRI). His research focuses on Chinese foreign and security policy, primarily on China-EU relations and China’s international science and technology cooperation.