MERICS China Podcast

EU-China relations in 2026, with Grzegorz Stec

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Europe has found itself between a rock and a hard place in the last couple of months – between China leveraging export controls on rare earth elements and the US stating its desire to incorporate Greenland. Where does this leave the EU’s China policy? Do we continue to de-risk or do we reconnect with China to hedge in this great power confrontation? Grzegorz Stec, Senior Analyst and Head of the MERICS Brussels Office, joins Johannes Heller-John to talk about EU-China relations in 2026. 

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Johannes Heller-John:

More so than usual, Europe has found itself between a rock and a hard place in the last couple of months. In the autumn of 2025, China set up export controls on rare earth elements to counter US tariffs. Europe was shown its own vulnerability, and in a way shown its place by being seen as an acceptable collateral damage by China. In early 2026, the Trump administration argued that an effective countering of China and Russia in the Arctic would necessitate the incorporation of Greenland into the United States, disregarding the right to self-determination of Greenlanders and the territorial integrity of the Kingdom of Denmark. Where does this leave the EU's China policy? Do we continue to de-risk? Do we reconnect with China? To hedge in this great power confrontation? I hope to answer some of these questions with my guests. My name is Johannes Heller-John, and to talk about EU-China relations in 2026, I'm joined by my colleague Grzegorz Stec, Senior Analyst and head of the MERICS Brussels office. Welcome back to the podcast, Greg.

Grzegorz Stec:

Hi Johannes. It's a pleasure to join you here.

Johannes Heller-John:

Before we dive into 2026, I'd like to ask you how the EU-China relations have developed last year. So how was 2025 in EU-China relations?

Grzegorz Stec:

Sure. In many ways, the relations have made a circle. We started the year with Trump entering the White House. We had the Liberation Day and the tariff wars. And this was the moment where there was a consideration on the European side also in Brussels: How about we explore engagement? And there was more outreach towards Beijing with softer rhetoric and high-level dialogues. As part of this re-engagement, China removed the sanctions on the MEPs in a political gesture, but hasn't really engaged with those more substantive asks from the European side.

Grzegorz Stec:

We also have seen President Xi Jinping not coming to Europe for the 50th anniversary of EU-China relations and the EU-China summit that was happening at that time. But instead, he decided to show up at the victory day in Moscow. At the same time, the concerns related to China's overcapacity, the question of rare earth controls, exports that you already mentioned before, all of that has been disrupting the EU-China relations. And that led us to a relatively disappointing EU-China summit, which didn't really offer much breakthrough. So from Brussels assessment, this entire time of trying to engage China and pursue outreach, pursue dialogue didn't really manifest in any concrete gives from the Chinese side.

Grzegorz Stec:

And this is where President von der Leyen talked about the relations arriving at an inflection point, a moment where we're really shifting our thinking on China and the relations. And as we arrive to the end of the year, in many ways, you could see those two dynamics playing out on the European side. On the one hand, the EU is turning to more unilateral and more defensive measures. We see that with the Resource EU to tackle the question of the joint communication on updating and upgrading the strategic thinking behind Europe's economic security, the Industrial Accelerator Act that is in the making, the revision of the Cyber Security Act, a number of things that are being pushed through in terms of legislation in Brussels. But at the same time, the year has also finished with multiple European leaders visiting China, and that is extending into 2026. So it's been a year that has seen kind of a cycle of going from trying to explore the engagement towards a bit of a disappointment. And now the member states are acting much more strongly in that sphere.

Johannes Heller-John:

Yeah, and if the calculation on how to engage with China wasn't complicated enough, as mentioned in the beginning, the US administration under Donald Trump stated quite uh clearly that it wanted to acquire or conquer Greenland, and that sent shockwaves through the European understanding of the global alliance structure. I mean, the the view was always being closely aligned with a more or less reliable partner, maybe, but with the US. And then like the question is like how to engage with China in in this uh situation. What have you heard in your conversations in Brussels and maybe in the chatter from China regarding the EU-China relationship if the US would become a threat rather than an ally?

Grzegorz Stec:

In many ways, the challenge aspect of the relationship with the US has been on the forefront of discussions of the transatlantic relationship in Brussels already throughout the past year. But the Greenland debacle that you referred to really has been this moment of mental shift or at least a strong reassessment on the European side. So, there has been a buildup to this point. And finally, there was a moment of this genuine preparation on the European side to make use of anti-coercion instrument and actually stand up to Trump. Of course, I think everyone was relieved that it didn't come to that, but there was this moment of preparation on the European side, which is learning that the fact that it needs to be cautious doesn't mean that it should act as if it's powerless.

Grzegorz Stec:

And this is something that is also noted by our Chinese partners. And this is exactly interesting how the Chinese side has been reacting. What have been the discussions among the Chinese analysts of this entire situation? And in many ways, the Greenland moment of crisis in transatlantic relations have been discussed by our Chinese colleagues as this pivotal moment for the EU's strategic autonomy in terms of both security and economic terms, when the EU, in their words, is coming to terms with predatory hegemonism or resource hegemonism coming from the side of the US.

Grzegorz Stec:

And some of those colleagues argue that this may be a moment of the new opening in EU-China relations. As the logic goes from the Chinese perspective, that largely Europe's position on China has been driven by Washington. If you remove that constraint, there might be much more leeway for the two to actually engage, in which they very much overlook some of the structural and systemic issues that are there in the relationship. But this comes at a price from the Chinese perspective, which would be to really abandon or downscale the de-risking policy that EU is pursuing. And that relates to the fact that even though there is this moment and discussion about the re-engagement in Chinese thinking, there doesn't seem to be a fundamental reassessment of how China sees Europe and what are the Chinese objectives vis-a-vis Europe, which remain to be trying to prevent Europe from joining any sort of containment initiatives, making sure that the EU doesn't overly restrict access to its technology and doesn't overly restrict access to its market. So, in many ways, we're supposed to stay this good, big, quiet, open market for China.

Johannes Heller-John:

Thinking back to Davos, there was the speech by Prime Minister Carney from Canada, who kind of announced a pivot towards China, at least a hedging towards the United States. From talking with representatives and and others in Brussels, what is your sense? Because I remember just when the Greenland situation broke, there was this knee-jerk reaction of: well, then we have to turn to China. Not any official things, but like there was chatter about that. What was your feeling talking to officials here?

Grzegorz Stec:

Sure, I mean this is exactly as you described, it is a knee-jerk reaction. I think, as you said also at the very beginning, Europe does find itself between a rock and a hard place. And this situation is going to continue. I think we have to get used to the fact that the US is not the solution to China. China is not a solution to the US. There has been already this assessment in Brussels. We've seen that with the trade deals with Mercosur, with India, there is a move towards diversification and achieving more, let's say, strategic autonomy through diversifying our partners, but also at the same time investing more in ourselves. And this is also where the Industrial Accelerator Act is coming to the forefront. So, I think there is a moment of shift of thinking where Europe is coming really to terms, at least in Brussels, when it comes to the complicated position we have with China, and that Beijing doesn't necessarily offer easy solutions just because we have troubles with the US.

Johannes Heller-John:

You mentioned before that there has been quite a flurry of visits to China that is still ongoing. Do you see a risk that member states pursue their own China policy, or do you see a unified China policy endangered, or can this also further a common European China policy?

Grzegorz Stec:

I mean, first of all, we have to take note of the fact that the EU-China track is relatively quiet at the start of 2026. We don't have a specific high-level dialogue that would be lined up. There doesn't seem to be that much happening on that track. But at the same time, as you mentioned, the capitals are extremely active. We had President Macron traveling to China, we had German Foreign Minister Wadephul being there to prepare the visit of German Chancellor Friedrich Merz happening in February, most likely. We have British Prime Minister Keir Starmer, who is there right now as we record this, but also we had visits from Spain's king, from the Irish Taoiseach, from the Finnish Prime Minister. And the list actually goes on. We could add also ministers from some of the European countries. And interestingly, Chinese media and allies actually even speak of European leaders queuing up at Beijing's door in order to talk to China at this specific moment.

Grzegorz Stec:

So there is definitely a risk of Beijing playing them against one another. Uh as you've mentioned also before, it's to a large extent a question of Europe's interest in investments from China. That much was very clear and was even mentioned by President Macron during his speech at Davos specifically welcoming Chinese investments into Europe, but crucially, as he added, on specific conditions. And I think this is something that's going to remain crucial as this engagement by capitals is pursued. That it's first of all about the fact that making sure that if Chinese investments are secured, it's not done so at the expense of European unity or our commitment to de-risking, which is and remains to be very valid in the context of European strategic autonomy over the long term.

Grzegorz Stec:

But second of all, that it's going to be beneficial for the European economies, that those are not just investments that only create jobs, but they should also transfer technology or build up the European ecosystem. They should be simply part of a bigger plan. And finally, the third, it's also about the fact that we don't really allow China to play us off against one another. Because all this engagement with Beijing, especially at this moment of geopolitical shifts, is absolutely necessary. This is not something where any sort of decoupling should be happening. But it's very important that we navigate it in a way that is resilient.

Johannes Heller-John:

This sounds like Europe is finally kind of starting to get like a more organized or more structured view of like how to engage with China and kind of knowing what it needs from this interaction. It seems this has been quite a long time coming, but it seems to be that we're finally getting there. Do you share this assessment?

Grzegorz Stec:

I would say that's an optimistic assessment. So I would very gladly want to share it, but there are of course a lot of challenges that still remain. In many ways, it's first of all about making sure that there is commitment. A lot of those initiatives that I mentioned before at the beginning of our conversation, they still require a support of the member states. A lot of them are coming from the position where the member states haven't necessarily wanted to play ball with Brussels, and this is why we need some of the tightening of our thinking, whether that's cybersecurity or the matters related to economic security. So there is definitely room for improvement and getting more serious on this. And second of all, there is also a question of really right-sizing the de-risking our ambitions, because there's simply a lot of different initiatives that are calling for our attention immediately. And it's about making sure that the resources that we have available are spent in the right way. So there are a lot of challenges. It's also about keeping the European economy in a good spot, and this is where all this interest from member states and investments from China is partially coming from. So there is no perfect solution where leaning too strong to one side only is going to be the right call. We need to keep everything in the right balance and the right mix in order to move forward. And this is why exactly this question of engagement with China remains valid. It's very much about how we do it rather on whether we should do it.

Johannes Heller-John:

In our conversation, you also mentioned this a need for a more resilient engagement. Can you expand a little more on this concept of resilient engagement?

Grzegorz Stec:

Sure. Uh so this idea comes from the place that we basically need to talk to China for three major reasons. First of all, having an open channel of conversation is really essential for crisis management. And this relates not only to economic or economic security related issues, such as the discussions about the rare earths access and export controls, but also more operational things, like the situation we had throughout last year, where a German aircraft was targeted by laser from a Chinese warship, allegedly. But keeping the channels of communication open in such situations is really essential.

Grzegorz Stec:

Second of all, China is going to remain a key actor in addressing the global challenges, whether that's climate change, regulating technologies like AI or reforming the international order. It's just going to stay there. We don't really seem to look eye to eye on a number of those issues, but it's really important to keep the conversation going with China while being very mindful of those differences that we do have.

Grzegorz Stec:

And finally, it's also about the fact that those high-level exchanges with China really offer a quite rare opportunity to try to puncture the party state's echo chamber. This is an opportunity for the European side to signal resolve, to pursue deterrence, to reduce the mis-readings that the Chinese side might have of the European side.

Grzegorz Stec:

So, in many ways, the engagement with China can reduce risks that we have in a relationship. And there is plenty of those in New China relations. But in the case of this engagement with China, it is equally crucial that this can also be the engagement itself, can be a source of risk in itself, and those need to be mitigated. So, in a way, irresponsible engagement can be a source of risks. Beijing has a track record of using diplomatic encounters to erode unity, either the European level or even on national level. It also tends to try to seize the narrative of the exchange that may lead to Europe's partners misinterpreting the engagement that we're seeing out there. Or it can also use the exchanges for stalling, because if you have a very important visit of your prime minister coming up, maybe you're not going to really introduce this measure that is going to not necessarily land well with Beijing, and you're wasting time in this way on issues that sometimes require fast action. There are also situations where China has simply not delivered on what it has promised.

Grzegorz Stec:

So really making sure that engagement is done with all of this in mind is really crucial. We need to talk, but we need to be really mindful how. And this is why we worked at MERICS on a resilient engagement playbook, which is a list of suggestions and recommendations, thoughts on how to engage with China without those risks. Because the engagement is going to continue. How do we do it in a way that uh is as responsible and as resilient as possible? And in that way we're basically navigating a diplomatic de-risking, but not diplomatic decoupling.

Johannes Heller-John:

I would like to wrap up this conversation with a look into 2026. We're now at the end of January. So the last call to make a prediction for 2026, I'd say. What are maybe three things you look out for this year if people follow EU-China relations?

Grzegorz Stec:

Sure. So in 2026, with all the geopolitical shifts that we already had so far, it's a very big gamble to venture predictions. But let me maybe go with three points. First, I think we can safely predict that the EU will continue to feel the squeeze from both the US and China. And this is really something that we need to come to terms with and really forego the idea that we can solve one with the other. It's really about finding solutions that come from Europe itself and also diversifying, de- risking. There is just simply a very broad agenda, and we need to get very mature about navigating the push from both sides.

Grzegorz Stec:

Second, I think that 2026 will be largely about operationalizing and right-sizing de-risking. There is exactly this question of what we can afford, how we want to pursue it, and also making sure that we're aligned. So this is going to be really one of the driving discussions, I think, from the Brussels side in terms of the 2026.

Grzegorz Stec:

And finally, I think that Beijing will continue to be reluctant to extend any major grand bargain offers to Europe, but rather try to buy off support of individual countries. So, all this discussion about China potentially holding the keys to some sort of solution that is a grand scale option for Europe, I would be very cautious on that. And I think it's really important that the member states don't give too much to the bilateral temptations. So, in essence, to my mind, 2026 shapes up to be the year of really intense work ahead of us on strategic autonomy done right.

Johannes Heller-John:

So, we should get started with this work. With this call to action, thank you, Greg, for joining the podcast and for contributing your time and your thoughts here.

Grzegorz Stec:

Thank you very much, Johannes.

Johannes Heller-John:

And dear listener, if you want to know more about what Greg is working on, I'll share a link to his profile in the show notes. I'll also link the resilient engagement report that we mentioned before. And with this, I thank you all for listening, until next time, goodbye.