China's fragile power: How Europe can use economic leverage
Mar 9th 2026
A Chaillot Paper warns that China’s global assertiveness masks mounting domestic economic fragility and argues the EU should use its economic leverage to de-risk, build resilience, and negotiate from a position of strength.
- China faces slowing growth, rapid aging, a debt-heavy property sector, and shrinking fiscal space.
- Beijing is tightening party control and pushing for economic and technological self-reliance even when that causes market distortions.
- Chinese diplomacy has grown more confrontational and nationalist as domestic pressures rise.
- China leverages coercive economic tools like industrial overcapacity, technological lock-in, and strategic chokepoints.
- The EU should accelerate de-risking, strengthen its economic and technological assets, and engage Beijing with greater confidence and resolve.