Commentary: To Avert Superpower Dependence, Europe Chooses Geoeconomics

1. British Prime Minister Keir Starmer recently undertook a significant four-day visit to China, marking the first such trip by a UK leader in eight years. His activities included engaging with local culture in Shanghai and embracing Chinese symbolism of success while making gestures to his own nation's heritage, such as admiring a tartan-patterned horse-head lantern. This highlighted a renewed interest in diplomatic relations between the UK and China, moving away from the previously off-and-on engagements to a new phase of long-term strategic planning, as outlined by UK officials[para. 1][para. 2].

2. Starmer’s visit is part of a broader trend of European leaders re-engaging with China. In the span of under three months, several high-profile delegations from Spain, Norway, France, Germany, Ireland, and Finland visited China, ending long periods without such interactions. German Chancellor Friedrich Merz is expected in February, and reports suggest that these visits may be in anticipation of an impending official visit by US President Donald Trump in April[para. 3][para. 4][para. 5].

3. In addition to traditional diplomacy, European leaders are using social media and public appearances to foster goodwill. Keir Starmer’s team dined with locals, the UK’s ambassador used fluent Mandarin in interviews, President Macron quoted Chinese poetry and jogged in Chengdu, and France’s First Lady visited a panda born in France. These efforts aim to humanize and cement deeper ties with Chinese society while signaling openness and respect for local culture[para. 6][para. 7].

4. These visits signify a significant shift in global diplomacy. At the World Economic Forum, Canadian Prime Minister Mark Carney called on “middle powers” to collaborate and ensure their interests are represented, warning that failing to do so risks marginalization in a world dominated by superpowers. Carney’s speech followed his own breakthrough visit to China, the first by a Canadian leader since 2017—a move reflecting the urgency recognized by Western middle powers[para. 8][para. 9][para. 10].

5. Economic imperatives drive this new “ice-breaking” diplomacy. Nations are prioritizing the strengthening of trade and investment links with China, often clinching major deals. The UK secured trade and investment agreements worth 5 billion pounds ($6.85 billion) alongside a $15 billion AstraZeneca investment into China. French and Finnish moves yielded similar multibillion-dollar and multi-sector agreements, and even Canada struck a compromise on tariffs with China to benefit its agriculture and vehicle sectors[para. 11][para. 12][para. 13].

6. These deals underscore four critical areas of complementarity: trade, energy, critical minerals, and finance. The EU relies on China for 45 of 64 key industrial materials and 98% of its rare earth elements, while China’s advanced new energy supply chain and cheap photovoltaic modules are crucial for Europe’s sustainability goals. Financial partnerships are deepening, with expansions in stock market linkage and green bond issuances[para. 14][para. 15][para. 16][para. 17][para. 18].

7. The backdrop to this diplomatic shift is Europe’s mounting economic and structural challenges. Since the 2008 crisis, economic growth has stalled; Germany’s output rose by just 1% between 2017 and 2024. With high public debt, rising interest payments crowding out innovation and defense spending, and bureaucratic red tape, Europe recognizes the necessity for a new global engagement model. Accordingly, geoeconomics—cultivating diversified, utilitarian trade partnerships—is replacing ideology, and China has become an increasingly attractive, pragmatic partner[para. 19][para. 20][para. 21][para. 22][para. 23].

8. In parallel, Europe is hedging its bets by expanding ties with powers beyond China, such as through the recent EU-India free trade agreement, and is reallocating capital away from US markets due to fears of policy instability, especially under Donald Trump’s presidency. Sweden's largest pension fund, Alecta, notably sold nearly $8 billion in US Treasury holdings[para. 24][para. 25].

9. The world order is now described as one of “high interconnection, low trust, and intense calculation.” China’s objective is stability and an indispensable global role rather than traditional alliances, a reality Europe seems prepared to acknowledge and work within[para. 26].