How Europe and the US Recalibrate Security and Economic Policy Amid China’s Rise: New Developments and Strategic Shifts

As China continues to assert its expanding influence across global economic, technological, and strategic spheres, Europe and the United States are actively recalibrating their policies to address this shifting landscape. The period from 2024 onward marks a critical phase marked by intensified cooperation, strategic autonomy efforts, regional security assertiveness, and technological innovation—all aimed at maintaining a favorable balance of power while managing the complexities of China's ascent.

The Transatlantic Reset and NATO: Reinforcing Collective Security

Recent high-level meetings, notably the Munich Security Conference, have underscored a renewed emphasis on transatlantic cooperation. Leaders from Europe and the US are calling for a transatlantic reset—a strategic effort to reinforce alliances like NATO and align policies on security, technology, and economic resilience.

• NATO’s Role: There is a heightened push for NATO to adapt to new challenges, including regional security crises in Eastern Europe, the Arctic, and the Indo-Pacific. The US urges Europe to step up its defense contributions, emphasizing that European strategic coherence is essential for a unified front against China's influence.
• Strategic Coherence: Discussions highlight the importance of joint military exercises, intelligence sharing, and coordinated deterrence measures to counter Chinese and Russian ambitions.

Europe's Pursuit of Strategic Autonomy

Europe’s response to China’s rising influence is characterized by an assertive push for strategic autonomy—aiming to reduce dependencies and shape international standards.

Key Initiatives:

• European Chips Act: A flagship effort to boost semiconductor manufacturing within the EU, targeting $50 billion in investments to foster domestic capabilities.
• Supply Chain Diversification: The EU is actively working to diversify sources of critical minerals such as rare earth elements and lithium, crucial for electronics, renewable energy, and military hardware, which China currently dominates.
• Investment Screening and Regulation: Europe has tightened foreign investment controls to prevent strategic dependencies, especially from China, and introduced regulatory frameworks for trustworthy AI and cybersecurity.
• Normative Leadership: The EU aims to set global standards for AI ethics, digital governance, and cybersecurity, positioning itself as a normative leader in the digital age.

Strategic Significance:

By bolstering its technological capacity and regulatory frameworks, Europe seeks to assert independence in critical sectors and shape international norms, counterbalancing US and Chinese influence.

US Policy Tools: Strengthening Domestic Capabilities and Reducing Dependence

The US is leveraging an array of policy measures to reduce reliance on China and secure its technological edge.

• CHIPS and Science Act: Allocates $50 billion to reinvigorate domestic semiconductor manufacturing, aiming to curtail China’s access to advanced chip technology and secure supply chains.
• Additional Measures: The US is enhancing export controls, investment screening, and diplomatic efforts to counter Chinese economic coercion and protect critical infrastructure.

These initiatives are part of a broader strategy to foster innovation, ensure supply chain resilience, and maintain technological superiority in key sectors like AI, quantum computing, and military hardware.

Regional Security Dynamics: The Indo-Pacific, Arctic, and Beyond

Indo-Pacific:

• Countries like Japan, South Korea, and the Philippines are strengthening maritime defenses, deploying missile systems like the Type-03 Chū-SAM to deter Chinese aggression, especially near Taiwan.
• India is actively securing critical resources such as rare earths and lithium—vital for batteries and electronics—while expanding its military footprint in the Indian Ocean to counter Chinese influence.

Arctic:

• Melting ice has opened new strategic and economic opportunities. Russia, Canada, and the US are investing in military infrastructure and resource exploration, recognizing the Arctic’s potential for shipping routes and untapped minerals.
• The US has increased its Arctic military presence, including icebreaker ships and surveillance assets, signaling its interest in maintaining influence in this rapidly evolving region.

Technological and Military Innovation

Artificial intelligence remains at the forefront of military modernization:

• China’s Wing Loong 10B drone exemplifies autonomous AI-enabled weapon systems, reflecting rapid advancements in AI in warfare.
• The US is revising its SOF doctrines to incorporate autonomous systems and AI, seeking strategic advantages in special operations and cyber warfare.

Cybersecurity continues to be a top priority, with efforts to develop international norms and robust defenses to prevent escalation in cyber conflicts, especially as AI-driven cyber threats grow more sophisticated.

Evolving Regional Perspectives

Korea:

Recent analyses, such as a detailed YouTube video from CSIS, suggest that South Korea’s strategic value of China has shifted. While historically dependent economically on China, Seoul is now more cautious, balancing economic ties with security concerns related to North Korea and regional stability. South Korea is increasingly engaging with the US and Japan to strengthen deterrence and diversify economic partnerships.

Mongolia:

The US is actively engaging with Mongolia as part of its "Third Neighbor" policy—a strategy to counterbalance China and Russia by strengthening relationships with smaller regional powers. Recent developments include military collaborations, economic investments, and diplomatic engagement aimed at enhancing Mongolia’s sovereignty and regional stability.

Outlook: Navigating Competition and Cooperation

The next phase of global geopolitics will be characterized by strategic competition but also opportunities for multilateral cooperation. Key challenges include:

• Securing critical resources: Ensuring supply chain resilience for minerals, energy, and advanced technologies.
• Shaping international norms: Leading in AI, cyber governance, and digital standards to set a rules-based global order.
• Balancing competition with diplomacy: Managing tensions to prevent escalation while safeguarding economic and security interests.

Final Reflection:

As Europe and the US continue to recalibrate policies amid China’s rise, their success will depend on technological leadership, supply chain resilience, and international norm-setting. Countries that lead in AI innovation, control critical resources, and shape global standards will influence the future balance of power, with significant implications for regional stability and global security in the coming years.