During the last decade, the China-policies of the EU and many of its member states have changed significantly. When in the mid-2010s China was still largely seen as an enormous economic opportunity, already in 2019 the EU defined it simultaneously as a partner, a competitor, and a systemic rival. After Russia’s full-scale attack to Ukraine in February 2022 and China’s increasingly apparent role as an enabler of Russia’s military action, the relationship between China and countries supporting Ukraine have soured even more. But there are other aspects of China that have played a role in the shifting attitudes toward it. At the same time, cutting links to it is still off the table.
China has been conducting and continues to conduct espionage against other nations all over the world, also in the Northern Europe. While China itself denies any wrongdoing, there are enough both classified and public examples to prove the contrary. Moreover, China uses its intelligence apparatus not only to collect information, but to influence other nations and individuals in them.
While Chinese espionage is not a new phenomenon, in the last decade China has furthered its own legislation to strengthen the role of intelligence and security authorities both domestically and abroad. Several new laws have been formulated and even more existing laws amended to promote a comprehensive interpretation of national security. This has, for example, raised concerns of unwanted technological transfer to China in the forms of industrial and research cooperation.
At the same time, China continues to increase its geopolitical clout. While its goal is most likely not to become a superpower like the post-Cold War Unites States, it promotes its global interests increasingly assertively and is today only realistic challenger to the U.S. dominance in the world affairs. Combined with the Chinese de facto support of Russian war of aggression in Ukraine and the fact that so many countries seem to have no qualms with that speaks loudly of the changing world order and the role of China in that change.
China’s biggest leverage internationally grows from its economic power. While it is the top exporter in the world, its domestic market is also massive and very attractive to foreign companies. Moreover, the dependence on the Chinese exports has increased all over the world. China knows this and uses both its exports as well as market access as political tools. Especially in the case of rare earth minerals the link between a given country’s disposition to China and possibility to import coveted minerals is clear, and not new.
For example, in 2010 China imposed restrictions on the export of rare earth minerals to Japan. While the move was later ruled to be in contradiction with the WTO rules, the signal was clear: China was both able and willing to use export restrictions to protect its own interests. In the latest occasion of this particular power, China informed the world of the new export restrictions in late 2025, a move forceful enough to push even the United States to look for a negotiated solution in its trade disagreement with China. While the Chinese screening mechanism for rare earth exports was delayed, the message was again heard all over the world. Moreover, the rare earth minerals are much more coveted on global scale today than 15 years ago.
Political considerations apply to Chinese foreign direct investments as well. In the mid-2010s the Chinese investments to Europe went largely to big European economies such as Germany, France, and the United Kingdom. Finland, too, was named as a major destination of the Chinese FDI, but while the figures were admittedly impressive, they were linked to very few individual deals, such as the sale of the online gaming company Supercell to Chinese Tencent with 8.4 billion euros in 2016. It was more or less at that time when the more critical discussion on the risks related to Chinese investments began in Europe, and it has continued to this day. Today, it is not only that Chinese investments to Europe are on lower level than in the past, but they are also distributed differently: for example, Hungarian automobile industry has become a major destination of Chinese FDI in Europe.
In conclusion, it is clear that in the context of China, countries as well as unions and alliances need to prepare themselves for a continuous balancing act between economic gains and security risks for the foreseeable future. While the economic cooperation with China is still necessary and lucrative, it is good to remember that it often comes with additional baggage.
Teemu Naarajärvi
PhD, Head of Strategic Analysis
Finnish Security and Intelligence Service
Finland
