In this special edition of the Guanxi Dialogues, Head of Newsletter Francesco Palma sat down with Member of the European Parliament Susana Solís (European People’s Party/Partido Popular), who served as a member of the European Parliament’s delegation to Beijing and Wuhan for the 43rd EU-China Interparliamentary Meeting, the first such visit since 2018. Drawing on her background in European manufacturing and her work on the Committee on Industry, Research and Energy (ITRE), Solís Pérez offers an account of what the trip revealed about China’s industrial trajectory, Europe’s persistent dependencies on critical raw materials and clean-tech components, the tension between Member States pursuing bilateral ties with Beijing, and the need for a coherent common EU position.
We would like to extend a special thank you to Rosalinda Manzo for coordinating with MEP Solís Pérez’s office, and to Alessandro Forte for his contributions to this edition.
Francesco Palma, Vice-Head of the Communications Team for the Newsletter
You were among the 12 MEPs who travelled to Beijing and Wuhan for the 43rd EU–China Inter-Parliamentary Meeting, the first visit of the Parliament’s China delegation to the country since 2018. What was your overall impression of the state of the EU–China relationship as experienced from Beijing, and did the visit change any assumptions you had held prior to departure?
MEP Solís Pérez: The trip confirmed something that in Brussels we often describe in very technical language, but that feels much more real when you are there: the EU–China relationship has entered a different phase. It is still a relationship we need to manage, and in some areas we need to cooperate, but it is much less comfortable than it used to be.
The official image in Beijing is one of continuity, order, and partnership. Everything is perfectly prepared. But behind that very polished surface, you immediately feel how much has changed since the last visit of the Parliament’s China delegation in 2018: the pandemic, Russia’s war against Ukraine, export controls on critical raw materials, growing trade imbalances, and several years of frozen parliamentary dialogue.
What struck me most was the contrast between confidence and vulnerability. China projects enormous technological and industrial confidence. At the same time, many of its economic challenges are clearly present in the background: weak domestic demand, the real estate crisis, demographic pressure, and very intense internal competition in some sectors. And that matters for Europe, because what happens to China’s economy does not stay in China; our economies are too interconnected for that.
So, I came back with a clearer idea: we should talk to China, of course. Dialogue is necessary. But dialogue only works if Europe goes in united, realistic, and with its eyes wide open.
The agenda was notably candid in scope, covering Russia’s war against Ukraine, human rights concerns, and trade asymmetries alongside the 15th Five-Year Plan. Were Chinese counterparts willing to engage substantively on the more sensitive topics or did those conversations remain at a formal, diplomatic level?
MEP Solís Pérez: It depended a lot on the subject. On climate, environment, and some global issues, there was room for a more constructive conversation. On trade, we were frank. We raised overcapacity, unfair competition, strategic dependencies, and the fact that European companies are often not competing on equal terms.
But on the most sensitive issues; Ukraine, Russia, human rights, the limits were very clear. We told our Chinese counterparts that China’s support, direct or indirect, for Russia’s war economy is not a side issue for Europe. It goes to the heart of trust. You cannot talk about a mature partnership with Europe while helping sustain the industrial base of a country that is waging war on the European continent.
On human rights, the answer was more predictable: these issues are presented as internal matters. That is not new, but saying it face to face is different from reading it in a diplomatic note. It reminds you that dialogue is useful, but it does not magically erase systemic differences.
I would describe the meetings as frank, but not always substantive. And that is already an important lesson: sometimes a conversation is valuable not because it solves a problem, but because it confirms exactly where the problem is.
The second day took the delegation to Wuhan, including visits to industrial and manufacturing facilities. As someone with a long career in European industry, what did those visits reveal about China’s current industrial and technological trajectory, and what do you think European policymakers are still underestimating?
MEP Solís Pérez: Wuhan was probably the most eye-opening part of the mission. We visited an electric vehicle facility, a biomedical electronics research institute, a European-owned industrial plant, and a humanoid robotics innovation centre. And this was not science fiction or a trade fair. It was industrial development happening at speed.
Having spent years in European manufacturing before coming to politics, what struck me was not only the technology itself. It was the system behind it: the coordination between public priorities, industrial investment, infrastructure, subsidies, and scale. What we have already seen in solar panels, batteries, and electric vehicles is now being replicated in robotics, artificial intelligence, biotechnology, and advanced semiconductors.
This is what I think Europe still underestimates: China is not just betting on one sector. It is building whole ecosystems. And if Europe reacts only when a Chinese product arrives in our market at a price we cannot match, we will always be late. The lesson is not that we should copy China’s model. But we do need to become much faster and much more serious about our own industrial base.
From your position on the Committee on Industry, Research and Energy, how would you assess the EU’s current industrial strategy, the Clean Industrial Deal and the Competitiveness Compass, as a response to China’s state-directed industrial model? Is the ambition matching the pace of implementation?
MEP Solís Pérez: The diagnosis in Europe has improved a lot; we now understand that competitiveness, security, and industrial capacity are connected. The problem is that implementation is still too slow. China supports its strategic industries with a scale, discipline, and continuity that European companies simply cannot match under current conditions, and when a product arrives in Europe below its real production cost because it is been supported at every stage of the value chain, that is not healthy competition. It is the export of a subsidy.
At the same time, Europe shouldn’t respond with blanket protectionism, that would only divide Europeans further, without making us more competitive. What we need is a more precise strategy: ordinary trade where there’s a real comparative advantage, firm and targeted protection where China’s industrial policy creates distortions, and a lot more work at home to remove our own bottlenecks and simplify regulation.
That means cheaper, better-connected energy, faster permitting, a real capital markets union, less fragmentation in the single market, and the ability to turn research into factories. Protection without competitiveness is defensive. Competitiveness without protection is naïve. Europe needs both.
By the end of last year, China leveraged its dominant position over the rare earth refining supply chain to counterbalance trade sanctions from the U.S., temporarily placing European technological autonomy in high-end industrial production at risk. Europe’s dependency in this area remains acute. What concrete steps should the EU be prioritising to reduce its strategic exposure in critical raw materials, and where is progress falling short?
This is one of the clearest examples of why strategic autonomy cannot remain a slogan. Europe is deeply exposed to critical raw materials, especially in rare earths, permanent magnets and battery-grade graphite. The export controls imposed by China showed how quickly a commercial dependency can become a political vulnerability.
The Critical Raw Materials Act is a good starting point, but it is not enough on its own. A framework without money, speed and implementation does not change reality. We need dedicated funding for strategic projects, much faster permitting, more processing and refining capacity in Europe, more recycling, and stronger partnerships with reliable countries.
The future European Critical Raw Materials Centre should not be just another coordination platform. It should help aggregate demand, de-risk investment and give industry a clearer signal that Europe is serious. We also need to be ready to use our trade tools, including the Anti-Coercion Instrument, when export controls on essential inputs are used as pressure.
Here again, the response must be precise. Not every dependency has the same risk. A magnet for an electric motor or a wind turbine is not the same as a low-risk consumer product. We should prioritise the materials and components where a disruption would stop European industry.
The electric vehicle sector has become a flashpoint in EU–China industrial competition. You negotiated the Euro 7 regulation and have championed support for automotive regions in transition. Do European carmakers still have a realistic path to competing with Chinese manufacturers, and if so, on what terms and with what kind of public support?
Yes, but we should be honest: the path is narrower than it was a few years ago. European carmakers still have enormous strengths: engineering, quality, safety, software, brands and industrial know-how. But they are competing against manufacturers that have benefited from state support, lower energy costs, scale and control over large parts of the battery value chain.
The countervailing duties on Chinese electric vehicles are therefore legitimate. They are not anti-China; they are pro-fair competition. But tariffs alone will not save the European automotive industry. They can buy time, but Europe has to use that time well.
That means stable regulation, faster deployment of charging infrastructure, affordable clean energy, support for battery production, help for retooling factories and demand-side measures that make the transition commercially viable for families and companies. We cannot ask our industry to transform everything at once and then leave it alone to absorb all the costs. China does not ask its industry to carry a strategic transformation by itself. Europe should not either.
A less-discussed dependency concerns fertiliser inputs, where European agriculture remains increasingly exposed to Chinese-controlled supply chains. Is this vulnerability on the radar of ITRE, and does it merit more dedicated political attention at EU level?
It is not yet sufficiently on the radar, and it should be. Critical dependencies are not only about batteries, semiconductors or rare earths. Food security also depends on inputs, and fertilisers are a good example.
The dependency is more complex than in rare earths because it involves several inputs: phosphate, potash and nitrogen, and several source countries. But China is a major player in phosphate-based fertilisers, and Russia is important in potash and nitrogen. That creates a strategic vulnerability for European agriculture.
Europe learned the hard way with gas that cheap dependency can become expensive very quickly. We should not wait for a crisis in fertilisers to understand that food security is part of strategic autonomy too. At the very least, we need a proper European stocktaking of these vulnerabilities and a diversification strategy.
China is simultaneously the world’s largest emitter and one of the largest investors in renewable energy. As a member of the Environment Committee, how do you read Beijing’s role in the global effort to counter climate change; is it a genuine partner, a strategic competitor in clean technology, or both at once?
Both at once and that is what makes the relationship so difficult. China is investing massively in clean technologies and has become a global leader in solar, batteries, electric vehicles and many renewable supply chains. That is real. At the same time, it remains the world’s largest emitter and continues to build new coal capacity. So we should avoid both extremes: pretending China is simply a climate partner, or pretending cooperation is impossible.
For Beijing, climate policy is also industrial policy. Leadership in clean technologies is not a side effect; it is a strategic objective. Europe must cooperate where our interests align, climate is a global public good, but we should not be naïve about the industrial dimension.
The green transition cannot mean replacing dependence on Russian gas with dependence on Chinese clean-tech components. Decarbonisation and resilience must go together.
Europe’s green transition depends heavily on Chinese-manufactured components, including solar panels, wind turbine parts, and battery cells. Sourcing these from China raises both economic and geopolitical concerns, yet the alternatives are not yet at scale. How should the EU navigate that tension without slowing its own decarbonisation goals?
This is probably one of the most uncomfortable truths in European policy today: reducing dependence on China will have costs. It may mean higher prices in the short term, more public support and more difficult political choices, but pretending there is no cost is worse, because it leads to bad decisions.
That is why we need to sequence the transition intelligently. Europe cannot replace all Chinese components overnight, but we can identify the most strategic vulnerabilities and start building alternatives: European production where possible, partnerships with trusted countries where necessary, recycling, stockpiling and smarter procurement.
Not all dependencies carry the same risk, though, so policy should reflect that: battery-grade graphite, rare earth magnets or components that can stop an entire industrial chain are not the same as products where dependency is more manageable. None of this is about slowing decarbonisation. It is about making it sustainable politically, industrially and geopolitically.
Prime Minister Sánchez visited Beijing in April and has consistently pursued a notably open bilateral relationship with China, including through the recent establishment of a Permanent Strategic Dialogue. As a member of the Partido Popular and the EPP, how do you assess that approach, and where, in your view, does pragmatic engagement end and strategic miscalculation begin?
Engagement with China is not the problem. Every Member State has economic interests, and Spain is no exception. The problem appears when bilateral engagement weakens the common European position.
That is where I think the Spanish Government’s approach is risky. Four visits to China in four years, a long list of bilateral agreements, several documents that have not been fully explained publicly, and the idea of presenting Spain as a gateway for Chinese products into Europe. All of this sits uneasily with the broader European effort to respond to overcapacity and unfair competition.
Spain has a huge trade deficit with China, and the EU deficit is around 360 billion EUR. These are not abstract figures. They mean factories, jobs and strategic capacity. So, yes, we need dialogue with Beijing. But we should not send mixed signals.
The position defended within the EPP is clear: Europe should keep the door open to an agreement, but it must also be ready to act if China does not address the structural problems. Dialogue and leverage have to go together. Pragmatism ends when short-term bilateral gains make Europe weaker at the negotiating table.
There is a wider European tension between Member States pursuing bilateral economic relationships with China and the need for a coherent common EU position. From your perspective, how should that balance be struck, and what risks does fragmentation pose?
Member States can and should defend their interests, but China policy cannot become a collection of 27 separate strategies. China is a centralised actor that knows very well how to use European divisions.
That is precisely where the risk lies: asymmetry. Beijing can think and act strategically, while Europe often argues internally first and reacts later. If one Member State seeks exceptions, another tries to protect a particular sector, and another wants investment at any cost, the European position only gets weaker.
None of this means banning bilateral relations, it means coordinating them better. If an agreement has implications for EU trade, critical infrastructure, technology transfer or strategic dependencies, it should be looked at through a European lens. Otherwise, we will end up negotiating with China as a market of 450 million people while behaving like a group of small, competing national economies.
The European Parliament and the European Commission do not always approach China in lockstep, whether on trade instruments, human rights conditionality, or the pace of regulatory action. Where do you see the most significant divergences today, and where do the two institutions find genuine common ground?
The Parliament is often more direct and more impatient, especially on human rights, reciprocity and trade defence. The Commission has to manage negotiations, Member State pressures and the operational relationship, so it can sometimes move more cautiously.
But the common ground is stronger than it was. Both institutions now accept the basic framework: de-risking, not decoupling; engagement, but not naivety; diversification of dependencies; and a firmer response to overcapacity and economic coercion.
The main challenge is no longer whether Europe has the right vocabulary. We do. The challenge is whether we have the political will to use the tools we have built. We have a much bigger toolbox today - the Foreign Subsidies Regulation, the Anti-Coercion Instrument, trade defence measures, and investment screening - but a tool that is never used does not change behaviour. So the question is if Europe can move at the speed required by the geopolitical moment.
You came to politics after a long career in European manufacturing and management, at companies that compete directly in markets where China is an increasingly dominant force. How does that private-sector background shape the way you approach questions of industrial strategy and EU–China economic relations in your legislative work?
It makes me less patient with abstract debates. In industry, competitiveness is not something you write into a speech. It is energy prices, permits, supply chains, skills, investment cycles, customers and margins. If one of those pieces fails, the factory feels it immediately.
That background also makes me very aware of what happens when competition is not fair. Open markets are a strength, but only if the rules are broadly comparable. If European companies compete against firms backed by the state, with cheaper financing, cheaper energy and protected domestic markets, the result is not a romantic story about free trade. It is deindustrialisation.
At the same time, I do not believe in throwing subsidies at every problem. Public money must be used carefully. The right question is always: does this measure build real capacity, or does it just postpone a problem? Does it create resilience, or a new dependency? Does it help companies scale in Europe, or does it fragment the single market even more? I believe Europe needs both realism and discipline. We should defend our industry, but we should also fix the things at home that make it harder for our companies to grow.
Looking beyond EU–China relations specifically: what is the issue you feel most urgently requires the Parliament’s attention in the remainder of this term, and why?
The biggest task is closing the gap between what Europe says and what Europe does. We have become very good at strategic language: competitiveness, resilience, autonomy, defence, industrial sovereignty. But if those words are not backed by investment, faster decisions and better execution, they become rhetoric.
On industry, we have frameworks but not enough financial firepower. On defence, we have changed the tone but still need sustained investment. On energy, we talk about competitiveness while many companies still face prices that make it difficult to produce in Europe. On trade, we have created powerful instruments, but we sometimes hesitate to use them.
The rest of this term should be about delivery. Less announcing, more implementing.
The EU’s longstanding framework describes China as simultaneously a partner, a competitor, and a systemic rival. After this visit, which of those three characterisations feels most accurate to you, and is the tripartite framing still fit for purpose?
The balance behind the three labels has shifted. China is still a partner on issues like climate or health, but it is now clearly more of a competitor and a systemic rival, in trade and technology on one side, and in values, human rights and the rules-based order on the other.
That does not mean closing the door but entering the room knowing exactly who us on the other side. Europe should not be aggressive for the sake of it, but it should stop being naïve. China respects clarity, unity and leverage, that is what we need to bring to the table.