This article is part of a Synergies series on Next generation trade arrangements for environment and sustainable development. The views and opinions are those of the author(s).

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Since 2020, the European Commission has progressively expanded its toolbox for strategic autonomy and economic security. Initially conceived to strengthen resilience in the aftermath of the COVID-19 pandemic, the agenda has evolved in response to Russia’s invasion of Ukraine, growing geopolitical fragmentation, and persistent concerns over Europe's declining competitiveness. A mix of industrial, trade, and investment policy measures now seek to reverse European industrial decline, close innovation and productivity gaps with China and the United States, and reduce strategic dependencies in critical supply chains.

Within this context, China's growing dominance in green technologies and position across critical minerals supply chains have become central concerns for European policymakers. Reliance on China can accelerate and lower the cost of decarbonization, but at the expense of deepening strategic dependencies and intensifying pressure on European industrial capabilities. Reducing both competitive pressures and strategic dependencies has therefore become a major political objective. Yet this shift goes beyond green technologies alone and amounts to a wider reorientation of European external policy, one in which trade, international partnerships, and economic diplomacy are expected to serve resilience and competitiveness goals as well as sustainability objectives.

Along with domestically-focused measures, the EU is increasingly mobilizing external policies to support domestic industrial renewal, diversify supply chains, and strengthen the international competitiveness of European firms. This creates new opportunities for partner countries, for example through trade agreements, clean trade and investment partnerships, strategic partnerships on critical raw materials, and the Global Gateway strategy. At the same time, the externalization of Europe's economic security agenda raises questions on the implications for partner countries' own development strategies and industrial ambitions.

Take the example of Chinese investments in Morocco’s electric vehicles industry. From a European perspective, these investments are often interpreted as an attempt by Chinese manufacturers to preserve access to the EU market by locating production outside China. The EU has imposed duties on aluminium wheels exported from Morocco on those grounds just last year. Yet this interpretation captures only part of the story. For Morocco, attracting investment into electric vehicles and batteries represents the continuation of a long-term industrial strategy built on integration into global value chains, sustained investment in manufacturing capabilities, and preferential access to the EU market. Ignoring Morocco’s agency risks turning a potential opportunity for supply chain diversification into a zero-sum game calculus.

Nationality-based eligibility requirements currently discussed under the proposed Global Europe instrument provide another illustration. These provisions seek to strengthen opportunities for European firms in EU-funded projects abroad and respond to political pressure to avoid European public resources supporting Chinese companies. Yet they may also reshape the conditions under which partner countries can deliver development projects. A lingering risk is that they increase project costs and administrative complexity and jeopardize cooperation with multilateral development banks, all without necessarily strengthening European strategic objectives. 

Large-scale energy infrastructure illustrates these conundrums particularly well, due to their high capital requirements, technical complexity, and long implementation periods. In those cases, delivery depends on multinational business ecosystems rather than being nationally-defined. Evidence from a review of a handful of renewable energy projects in Africa suggests that European actors often contribute concessional finance, technical assistance, project development, and specialized technologies, while Chinese firms provide globally competitive engineering, procurement, and construction services together with clean technologies. Rather than operating as substitutes, these capabilities frequently prove complementary. It is often this combination of financial, technical, and industrial assets within commercially viable consortia that ultimately enables project delivery.

This, in turn, raises the question of the extent to which procurement, financing, and security rules can be designed as if these ecosystems were nationally separable—and the implications that arise from such design. This is because public procurement rules, supplier eligibility criteria, high-risk vendor screening, and other security and content requirements do not merely determine how projects are funded, they seek to shape participation in markets that these projects create. In practice, they influence which firms can bid, how consortia are structured, where equipment is sourced, who gets to build infrastructure, and how value chains are organized. 

For particularly complex infrastructure markets, such as in many African countries, project feasibility heavily relies on a combination of development finance, commercial capital, technology, engineering capacity, and political risk mitigation. In such settings, procurement and financing rules are not neutral administrative tools. At their best, they can steer investment towards higher-quality, more sustainable, and more secure projects, and support local value addition. At their worst, they can distort project economics, increase costs, and narrow partner countries’ room to assemble the combinations of finance, technology, and commercial partners they consider most effective.

Seen from this angle, the central question is not whether Europe should defend its economic security interests. It should. The question is how to do so in a way that remains compatible with the development strategies of partner countries and with the practical realities of project delivery. This calls for a more differentiated approach than the current debate often suggests. When it comes to China, the assumption that every instance of EU–China interaction in third markets is either desirable or problematic by definition is misleading. Better analytical frameworks and practical arrangements for distinguishing between situations where restrictions are justified, workable, and proportionate, and those where well-governed international collaboration offers better returns for both Europe and its partners. Three implications follow.

First, the external application of economic security measures should be assessed against development and delivery outcomes, not only against European risk calculations. Measures such as supplier exclusions, procurement preferences, or financing conditions can be justified in some contexts, particularly in sensitive sectors or where risks linked to security, public order, or excessive dependency are clear. But where they affect externally financed infrastructure and industrial projects, they should also be assessed against their likely impact on project bankability, timelines, local value creation, and partner country objectives. This is particularly important in sectors such as energy, transport, and critical minerals, where project viability often depends on combining multiple actors and instruments rather than relying on a single supplier or financier. 

Second, Europe needs a more explicit framework for deciding where competition, coexistence, or selective collaboration with China make sense in third markets. In some areas, where respective Chinese and European added value is evident, trying to side-line China at all costs may prove counterproductive. In others, especially where technology control, strategic infrastructure, security-sensitive data, or highly concentrated dependencies are at stake, tighter restrictions may be justified. The existence of competitive European alternatives also matters. 

Third, any credible external economic security approach must take partner country agency seriously. African governments pursue their own industrial, energy, and connectivity agendas, often by trying to retain bargaining space across multiple external relationships. Morocco’s EV strategy is one example; the politics around the Lobito Corridor offer another. Framed in Europe and the United States primarily through critical minerals and strategic competition, Lobito is also being shaped by the corridor countries’ own priorities around connectivity, regional development, trade, energy, and economic transformation. Ignoring that agency risks not only poor development outcomes, but Europe’s credibility as a partner.

Taken together, these points suggest that the focus of European policy should shift from simply reducing dependencies to managing interdependencies. This does not mean abandoning economic security concerns, but it does imply that Europe’s resilience objectives are now entangled with the policy autonomy, infrastructure needs, and development ambitions of partner countries. Rather than looking at China’s presence in third markets solely as a problem, the EU needs a clearer sense of where competition is unavoidable, where coexistence is likely, and where selective synergies may still serve both resilience and development objectives.

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Mariella Di Ciommo is Senior Policy Analyst – European foreign and development policy, ECDPM.

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The Executive Editor is Fabrice Lehmann.

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