Key facts
- China's 15th Five-Year Plan emphasizes technological self-reliance by 2030.
- European firms are crucial suppliers for China in semiconductors, aerospace, pharmaceuticals, automotive chips, robotics, and quantum computing.
- ASML's EUV lithography machines are essential for advanced chip manufacturing, with China still reliant on less advanced DUV machines.
- European companies supply critical components for China's Comac C919 aircraft and robotics sector.
- Europe leads in pharmaceutical patents and vaccine market share, while China rapidly increases R&D investment.
- Chinese automakers depend on European chips, but Europe has vulnerabilities in chip back-end manufacturing.
- China's monopoly on rare earths is seen as a more powerful leverage point than Europe's technological dependencies.
China's pursuit of technological self-reliance, outlined in its 15th Five-Year Plan, faces significant hurdles due to ongoing dependencies on European suppliers in strategic sectors. Despite Beijing's efforts to close the gap in areas like semiconductors, aerospace, pharmaceuticals, automotive chips, robotics, and quantum computing, European companies continue to provide essential products and technologies.
In semiconductors, the Dutch firm ASML holds a near-monopoly on the extreme ultraviolet (EUV) lithography machines crucial for advanced chip manufacturing. While sales of these machines to China are restricted, Beijing can still acquire less advanced deep ultraviolet (DUV) machines, where ASML also has a dominant market share. China aims for domestic chip production by 2028 but still requires ASML's expertise for learning and maintenance.
The aerospace sector sees European companies like France's Safran, Germany's Liebherr Aerospace, and Italy's Avio Aero providing critical engine and cabin components for China's Comac C919 airliner. Without their involvement, China's civil aviation program would be significantly hampered. However, weaponizing this supply chain could impact European suppliers' revenues.
Europe also maintains a lead in pharmaceutical patents and vaccine market share, though China's R&D investment is rapidly increasing. In medical equipment, companies like Siemens Healthineers and Philips are global leaders in MRI technology, with key upstream components still sourced from Europe.
Chinese automakers, including BYD, rely on European chips from Infineon, NXP, and STMicroelectronics. However, Europe itself faces vulnerabilities in the back-end manufacturing of automotive chips, depending on regions like China for packaging and assembly.
In robotics, European firms like Sweden's Ewellix and Germany's Rexroth supply essential components for China's advanced robots. Experts like Tobias Gehrke and Sam Goodman highlight that while China is making strides, these dependencies could offer Europe leverage, though China's control over rare earths presents a more potent counter-threat.