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Will the Future Bring Digital Trench Warfare Between the EU and China?

Dr. Annegret Bendiek is Senior Associate in the EU/Europe Research Division at the German Institute for International and Security Affairs (SWP), Dr. Nadine Godehardt is Deputy Head of the Asia Research Division at SWP, and David Schulze is Research Assistant in the Asia Research Division at SWP. Prof. Dr. Jürgen Neyer is Professor of European and International Politics at the European University Viadrina and Vice President for International Relations.

The U.S. Department of Commerce’s placement of Huawei on the Entity List, effectively banning U.S. suppliers from trading essential components like chips and software with the company, has seriously escalated the technological conflict with Beijing. European countries, more reliant on Huawei and trade with China than the United States, risk getting caught between the two superpowers. The European Union (EU) has named China as a “systemic rival,” in part because of mounting concerns about discriminatory industrial policies but many European countries are reluctant to follow U.S. warnings to completely cut ties with Huawei and suffer the technological and economic consequences of a decoupling from China.
With a lot more to lose through confrontation, Europe has to carefully consider when and how to press on privacy, fair competition, ownership of core technologies, and other issues with China. Beijing should make sure that its pursuit of “internet sovereignty” and technology leadership do not harm European security and business interests.

To understand the forces driving the relationship, SWP and the European University Viadrina invited 30 experts from Europe and China to participate in a scenario analysis workshop under the guidance of the Deloitte Center for the Long View on the future of China-EU digital geopolitics over the next 15 years. The group differentiated the scenarios around two axes: the degree of transnational interoperability between social and technical systems (fragmentation vs. integration of global networks) and sustainability of digital ecosystems (vulnerability vs. resilience). The result of the workshop was the following four fictional, but plausible scenarios.

Scenario 1: Cyber Peace (integration, resilience)

In the least confrontational future scenario “Cyber Peace,” a series of criminal cyberattacks on household systems, public transport, and the operating software of medical devices pressured European governments and the PRC to find common solutions to digital threats. The EU and China developed new joint institutions such as a Sino-European Council on Cybersecurity and issued the “Shenzhen Agreement” with promised joint financing for the cooperative development of cybersecurity technologies. The rate of technological innovation and levels of trust are high in both economies, and Beijing and Brussels remain in productive competition over standards and regulatory practices.

Scenario 2: Collapse of Digital Commons (integration, vulnerability)

The “Collapse of Digital Commons” scenario assumes a high degree of technical and economic integration, but with vulnerable digital and social systems. Cyberattacks launched by states, terrorists, and criminals are daily occurrences. China and Europe still benefit from highly integrated markets and production chains, but the tense security situation causes political and social upheavals. European politicians prioritize security over social justice, rule of law, privacy, individual rights, and democracy. Instability leads to political radicalization in Europe, coupled with open hostility toward China.

Scenario 3: Vulnerable Digital Islands (fragmentation, vulnerability)

In this scenario, there is high vulnerability to cyberattacks even though global trade has shrunk as protectionism advances. Mistrust is omnipresent and international arms control efforts are diminished. European data and security guidelines were passed, but they were not further implemented by companies or countries outside of Europe. European tech companies cannot keep up with those operating in larger protected markets abroad. The “Block of Independent States” (BIS), the successor organization to the EU, completely depends on the United States for security cooperation and on Chinese suppliers for hardware and software development.

Scenario 4: Digital Trench Warfare (fragmentation, resilience)

The scenario experts deemed most plausible was “Digital Trench Warfare.” Here, global socio-technical fragmentation meets high levels of social and technological resilience. In this world, the United States, China, and Europe hide behind impenetrable digital barriers, along with escalating differences in rules and standards for privacy, access, and content. They compete globally for natural resources like rare earths and wage proxy wars in third countries. In this world, the internet has been replaced by incompatible state cyberspaces, and the differences in the systems are accelerated by digital research strategies striving for autarky. Supply chains have been largely re-shored and foreign technology outlawed. States are dominant in this economy because every aspect of technology is tightly regulated. A sharp decline in commercial, cultural, and scientific exchanges is the result. It is a poorer but more secure world inside the respective blocks.

The gloomy world painted by three of these four scenarios is troubling, and current diplomatic efforts such as a bilateral cyber dialogue and business to business relations are failing in the task of achieving sustainable cooperation between China and Europe. This scenario-based effort suggests that Europe should upgrade the bilateral cyber dialogue with China, which currently only exists at the Council level, to involve heads of state and heads of government as well as increase the staffing, financing, and technical support of the delegations.

The scenarios also highlight the importance of the management of the existing strategic interdependence between the EU and China. For the last fifty years, European integration is the best example of how peace and stability can be achieved through economic, legal, and political integration. The China-EU digital relationship needs a similar realization: security does not emerge from separation but is rather part of the process of resilience.

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