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DPC report “Reverse Dependency: Making Europe’s Digital Technological Strengths Indispensable to China”



May 2024 | In a world where economic interdependencies increasingly run the risk of being weaponized amid an intensifying US-China competition, the EU has in recent months also been accelerating efforts to strengthen the Union’s economic security and technological sovereignty.

 

But, as most “technology ecosystems” rely on a transnational division of labor, an outright decoupling from China is neither feasible nor desirable. Instead, the report proposes the EU complement its approach of reducing strategic dependencies with policies that help maintain so-called “reverse dependencies” and keep itself technologically indispensable to China, or in other words: strategic entanglement instead of full autonomy.

 

With case-studies and through analysis of Chinese policy and academic sources, the report for each of the 12 ‘technology ecosystems’ such as lithography, artificial intelligence or quantum analyzes the source of Europe’s current strengths vis-à-vis China, and then assesses the respective political or economic leverage this may entail. On that basis, strategic ambition levels towards maintaining or strengthening Europe’s technological indispensability with regards to the selected tech application case-studies are suggested, and policy recommendations proposed.


The report – jointly and partially funded by the UK and Dutch governments as well as the European Union – contributes to an intensifying debate in recent months in Europe about the Union’s strategic autonomy, economic security as well as sustained industrial competitiveness. It assesses areas of technological indispensability that Europe possesses and could deepen vis-à-vis China as a form of economic leverage. CMG contributed research and analysis of China’s quantum policy, technological progress, market dynamics and the domestic discourse.

 

Check out the full report here.







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