This paper explores the extent and nature of China’s game-changing presence in Europe. China is using its growing economic strength to buy up strategic assets in Europe, from companies to government debt and infrastructure contracts. Crisis-hit Europe’s need for short-term cash is allowing China not just to strike cut-price deals but also to play off member states against each other and against their own collective interests – replicating a strategy it has already used in the developing world. This expansion of China’s presence in Europe is creating new fault lines within Europe and making it much harder to implement the more coordinated and tougher strategy towards China that the EU was beginning to develop. As Europeans compete with each other for Chinese business, they are reducing their chances of collectively negotiating reciprocal access to Chinese markets.

The authors argue that Europeans should not blame China for taking the opportunity to expand its economic foothold inside Europe and leverage its financial and commercial influence with cash-strapped member states. Nor should they resort to protectionism. Instead, they should unify around their collective interests and take steps to create a rules-based and level playing field on which European firms are able to compete in China in the same way as Chinese companies can in Europe. In particular, they should create a coordinated system for government debt purchases and a system for vetting direct investment and encourage fair competition in public procurement.