San Francisco Frontiers - EU seeks to protect sensitive tech from Chinese buyers

Brussels is building a trade armoury to protect the bloc from actions by rival countries, including a tool aimed at punishing nations that seek to put pressure on one of its member states.

The European Commission will publish a list of critical technologies it believes Europe must not make easily available to countries where Brussels fears they could harm the bloc's security, EU interests or human rights.

The European Parliament is also set to give its final green light on Tuesday to a mechanism that would allow the bloc to impose tariffs, restrict investment, and limit access to public contracts for nations seen as engaging in economic blackmail.

It is a response to a dispute with China over trade restrictions imposed on EU member Lithuania after it strengthened ties with Taiwan.

MEPs will also quiz the commission on Tuesday about the EU's relations with China following a visit by trade commissioner Valdis Dombrovskis to China last month.

Although the European Union says it seeks to maintain dialogue with Beijing, Brussels has stepped up its efforts to curtail critical trade with China.

It is part of a strategy of "de-risking" but not "decoupling" from China, pioneered by European Commission President Ursula von der Leyen.

She has repeatedly emphasised the need for Europe to produce more on the continent and work with friendlier nations to ensure "economic security", a phrase often used since Russia invaded Ukraine last year.

Following Moscow's invasion, the EU had to quickly find new energy sources after an over-reliance on Russian oil and gas.

- Hunt for raw materials -

The key technologies could include quantum computing, advanced semiconductors and artificial intelligence.

In June, Von der Leyen said that the EU was looking at a "limited, small set of cutting-edge technologies", adding: "Here we want to make sure they do not enhance the military capabilities of some countries of concern."

EU officials have previously raised concerns that Europe does not have its own way of assessing which technology exports could be damaging for the bloc.

There was no direct mention of China but the target of the tougher measures is clear.

The commission is working on a proposal on outbound investment that could restrict overseas funding by European companies.

It is already preparing a law to cut its dependence on China for critical raw materials, used to make products like electric cars.

China already moved in July to curb access to two rare metals -- gallium and germanium -- vital for making semiconductors.

In the latest salvo against China, Brussels opened a probe last month into Chinese electric car subsidies after claims they lead to unfair competition in the EU market.

The investigation triggered fears of a trade war with Beijing, since the EU could decide to impose tariffs on Chinese electric cars above the standard 10 percent EU rate if it concludes there are unfair practices.

V.Perez--SFF