European arms sales and defense technology transfers to China's neighbors are increasingly a pragmatic, though often uncoordinated, component of a broader geopolitical strategy that seeks to both balance China's military rise and secure European interests in the Indo-Pacific.

While the primary motives for individual European states (like France, Germany, and Italy) remain commercial—driven by the desire to sell advanced hardware—the cumulative effect of these transfers contributes to a strategy of deterrence and "de-risking" by strengthening the defensive capabilities and strategic autonomy of regional partners.

This strategic alignment is a subtle form of "soft containment," aimed at shaping the regional security environment without explicit military confrontation.

1. Arms Sales as Strategic Diversification and Balance

The pattern of European defense exports to the Indo-Pacific directly addresses the rising demand from regional states looking to hedge against China's increasing military assertiveness, particularly in the South China Sea and along the Sino-Indian border.

Strengthening Regional Hedging

Regional powers like India, Indonesia, South Korea, and Australia are actively engaged in military modernization, often focused on capabilities that counter China's Anti-Access/Area Denial (A2/AD) strategies. European suppliers fill a crucial niche by offering advanced, high-quality, non-U.S. equipment, enabling these nations to diversify their supply chains.

• India: As the world's largest arms importer, India is a massive market for European defense products. France's sale of Rafale fighter jets and the Scorpène-class submarines provides New Delhi with high-end, strategic assets critical for its defense posture against both China and Pakistan. This provides India with a strategic partner outside the US-Russia axis, enhancing its non-aligned autonomy while simultaneously upgrading its capacity to manage the security challenges posed by Beijing.

• Southeast Asia: Historically, European exports (collectively accounting for a quarter of major arms transfers to Southeast Asia) have often exceeded those from the US and Russia. Recent deals, such as Indonesia's purchase of Rafale jets and frigates from France and Italy, are explicitly driven by Jakarta's need to bolster its maritime security amidst South China Sea tensions. These acquisitions contribute to a regional “balancing” dynamic by making China's use of force more costly and risky.

Avoiding Dependency on the U.S. or China

From the perspective of the recipient countries, diversifying arms suppliers is a key element of maintaining strategic autonomy. By purchasing from a collection of European nations (which lack the same history of political-military entanglement as the US), regional states ensure they don't become overly reliant on a single power—an essential tactic for avoiding being forced to "choose sides" in the escalating Sino-American rivalry. For Europe, this strengthens its diplomatic ties and influence in the region, positioning it as a key partner in preserving the balance of power.

2. European Geopolitical and Economic Drivers

While the containment effect is undeniable, the motivation for European capitals is multifaceted, combining economic imperative with a newly articulated strategic awareness.

Economic Imperative and Industrial Policy 

For the major European arms exporters (France, Germany, Italy), defense sales are fundamentally a commercial enterprise supporting domestic jobs, high-technology industrial bases, and favorable balances of trade. The Indo-Pacific market, with its high demand for modernization, represents a critical export opportunity.

• France's Global Stance: France, as a resident Indo-Pacific power with overseas territories, views arms exports as a core tool of its global strategic autonomy. Selling advanced platforms like the Rafale is an explicit way to forge long-term, high-trust partnerships that facilitate its naval deployments and geopolitical influence in the region.

• Germany's Cautious Approach: Germany, while more constrained by its strict export guidelines, is a major supplier of naval vessels and patrol crafts to countries like Singapore and Malaysia. Even these "less lethal" exports contribute to the maritime domain awareness and defensive capabilities of states adjacent to the South China Sea.

The Indo-Pacific as a "Systemic Rivalry" Theater

The political context for these sales has shifted dramatically. The EU's 2021 Indo-Pacific Strategy formally recognized the region's security as inextricably linked to European economic security.

• "De-Risking" Military Strategy: Much like the EU's "de-risking" economic policy toward China, arms sales to China's neighbors are a form of military de-risking. By helping to maintain a stable regional security order through deterrence, European states indirectly protect the sea lines of communication (SLOCs) that carry a third of global trade and are vital to European prosperity. If the regional balance shifts too heavily in China’s favor, Europe stands to lose economic access and geopolitical influence.

• Signaling Alignment: The sales, particularly of advanced technologies, send a clear strategic signal to Beijing. They show that Europe is not merely a passive economic partner but an active security actor that supports the capacity of China's rivals to defend their sovereignty, thus buttressing the "rules-based international order" that China is perceived to be challenging.

3. Limits to a Full Containment Strategy 

Despite the clear balancing effect, European arms sales do not constitute a full, coordinated containment strategy in the mould of the U.S.'s Cold War policy.

Lack of Coordinated Strategy

European defense exports are highly fragmented and driven by national capitals rather than a unified EU strategy. This commercial competition among member states often overrides coordinated geopolitical planning. Deals are struck primarily for profit and bilateral strategic gain, not as a single, systematic push to encircle China.

Absence of Offensive Intent

A genuine containment strategy would involve transferring weapons specifically designed for offensive power projection against China. Instead, the focus of regional buyers has largely been on defensive, A2/AD-capable platforms (submarines, anti-ship missiles, maritime patrol aircraft) designed to deny China access to contested areas. The European role, therefore, is about contributing to robust defense and regional stability, not active military rivalry.

In conclusion, European arms sales to the Indo-Pacific function as a powerful geopolitical lever that aligns European interests with those of regional states seeking to check China’s ambitions. It is a carefully calibrated strategy of "soft balancing"—using diplomatic and industrial means to strengthen China’s neighbors—that achieves the practical effect of containment without the high political cost of an explicit military alliance or confrontation.