BRUSSELS — The EU will on Tuesday reveal plans to prevent European companies from making sensitive technologies such as supercomputers, artificial intelligence and advanced microchips in countries like China.
The European Economic Security Strategy, to be unveiled by Commission President Ursula von der Leyen, will outline plans for Brussels to intervene more in how European companies invest and trade in countries around the world. EU heads of government and state are expected to discuss the proposals in the 14-page strategy paper, obtained by POLITICO’s Brussels Playbook, at their June 29-30 summit.
The document avoids any specific mention of China — but it’s clear that Beijing, along with Russia, are the top targets. The paper refers to the risk of “overreliance on a single country, especially one with systemically divergent values, models and interests.”
The document also follows themes from last month’s G7 meeting where “de-risking” from China was a major point of discussion.
The EU should prevent “outbound investment in a narrow set of advanced technologies that could enhance military and intelligence capacities of actors who may use these capabilities to threaten international peace and security; and the secure treatment of sensitive information,” the paper says.
The EU will propose strengthening its control in three areas: Inbound investment screening (controlling when foreign companies buy up critical companies or infrastructure in Europe); export controls (when EU companies sell things such as weapons or espionage software to hostile countries); and outbound investment screening.
Currently, national governments decide on export controls. Earlier this year, the Netherlands blocked export of advanced microchips manufacturing equipment to China, bowing to U.S. pressure.
The new Economic Security Strategy is a step forward in Brussels’ plans to create new powers to control outsourcing of key industries and technology to potentially problematic countries, with the Commission planning to legislate to stop companies from moving supply chains for “advanced technologies” to autocracies.
The reasoning behind the move is that companies may be putting European intellectual property and national security at risk by outsourcing too much of their supply chains to countries such as China. With the new law, the EU could prohibit those outbound investments when it sees security risks.
The document specifically mentions “quantum computing” (which could be used to crack the most secure communications), “artificial intelligence” and “advanced semiconductors” as areas in which the EU could prevent outsourcing.
In practice, this means car factories can be outsourced; but not password-cracking supercomputers.
