China is using its vast economic power to gain political leverage over European policy decisions by exploiting Europe's economic dependence and fostering internal divisions. It does so by using its massive market as both a reward for cooperation and a weapon for coercion, while also investing in strategic infrastructure and industries to create long-term influence.

Economic Dependence as Leverage 

The primary source of China's political leverage is the immense size of its market. Europe's largest economies, particularly Germany, are heavily dependent on trade with China.

• Market Access: China leverages the attractiveness of its market to influence business and government decisions in Europe. Major European companies, especially in the automotive, technology, and luxury goods sectors, derive significant revenue from their operations in China. They often become a powerful lobbying force within their home countries, advocating against policies that could jeopardize their access to the Chinese market. For example, German carmakers, with deep investments in China, have historically been cautious about their government taking a hard line on human rights or trade issues for fear of retaliation from Beijing.

• Weaponizing Trade: When a European country challenges China on a sensitive issue, such as human rights or its stance on Taiwan, Beijing often responds with economic coercion. This can take the form of unofficial trade boycotts, customs delays, or import restrictions on specific products. A prominent example is China's unofficial trade embargo on Lithuania in 2021 after it allowed Taiwan to open a representative office under its own name. This economic punishment was designed to deter other EU nations from similar actions.

Exploiting Internal Divisions 

The European Union's lack of a unified foreign policy toward China is a key vulnerability that Beijing effectively exploits.

• "Divide and Conquer" Diplomacy: China's strategy often involves dealing with individual EU member states on a bilateral basis, bypassing the EU as a whole. This allows China to offer tailored incentives and exert pressure on individual countries. The "17+1" initiative (now 14+1), which includes China and a number of Central and Eastern European countries, was a prime example of this strategy. While the initiative has since lost some momentum, it demonstrated China's intent to create a separate forum to deepen economic ties and gain political allies within the EU's eastern flank.

• Targeting Economically Weaker States: China has been particularly successful in gaining influence in Southern and Eastern Europe. Countries like Greece, Hungary, and Serbia have been more receptive to Chinese investment in exchange for economic benefits. For instance, in the midst of its financial crisis, Greece sold a majority stake in its Port of Piraeus to Chinese state-owned enterprise COSCO. This investment not only revitalized the port but also gave China a crucial foothold in Europe. In return, Greece has, on several occasions, helped to block or soften EU statements critical of China's human rights record in the United Nations or other international forums.

• UN Votes: China has used its economic clout to gain political leverage over UN votes. While most EU countries vote with the West on human rights issues, China has successfully pressured some, particularly those that have benefited from Chinese investment, to abstain from or oppose resolutions critical of its policies in Xinjiang and Hong Kong.

Strategic Investments in Critical Infrastructure 

China's investments in Europe's ports, railways, and other critical infrastructure are not just about business; they serve a strategic purpose. By acquiring or building these assets, China creates a long-term physical presence that reinforces its political leverage.

• Dual-Use Capabilities: Many Chinese-built or acquired ports have dual-use capabilities, meaning they could be used for both commercial and military purposes. This raises concerns for NATO and other European security organizations that these assets could be used to support Chinese naval operations or for intelligence gathering.

• Supply Chain Control: Investments in logistics infrastructure, like ports and railways, are central to the Belt and Road Initiative (BRI). They create a direct trade route from China to Europe that bypasses Western-controlled chokepoints. This makes a number of European nations more dependent on a Chinese-controlled supply chain for their imports and exports, giving Beijing a powerful tool for influence.

• Technology and Industries: China's investments extend to strategic industries, including technology, energy, and manufacturing. This gives Chinese companies access to European technology and intellectual property while also creating a political constituency in Europe that is invested in a positive relationship with China.

In conclusion, China's economic power is not just a tool for commerce; it is a strategic asset used to reshape Europe's political landscape.

By leveraging economic dependence, exploiting internal divisions, and investing in strategic infrastructure, Beijing is systematically gaining influence over European policy decisions, often weakening the EU's ability to act as a unified and assertive geopolitical force.