Staying engaged

China is an important partner for the EU in shaping the global AI landscape

Artificial intelligence is no longer a future promise. It is becoming part of industrial policy, economic strategy and global governance all at once. For the European Union and China, that means the relationship is not only about trade or technology exchange. It is increasingly about how both sides position themselves in a world where AI is becoming a basic layer of competitiveness.

China's innovation trajectory explains why this matters. In the Global Innovation Index 2025 report released by the World Intellectual Property Organization, China entered the world's top 10 for the first time in the global innovation ranking, reflecting strong performance in knowledge and technology outputs, R&D spending and innovation clusters. Its innovation strength is visible not only in the ranking itself, but in the pace at which ideas are translated into industrial use.

What makes China especially relevant now is that AI is being treated as a strategic priority, not a stand-alone sector. A three-year plan issued in June aims to accelerate AI integration across the information and communications sector, with targets for more autonomous networks, broader computing-power coverage and expanded AI applications by 2028. That is a clear signal that China sees AI as a tool for upgrading industry, improving productivity and strengthening the country's long-term competitiveness.

For the EU, that should be a reason to stay engaged. China is still a major market, but it is also an innovation ecosystem where new technologies are tested and scaled quickly. More and more European companies are no longer present in China only to sell products. They are there to learn from the speed of development, benchmark their own performance and remain close to where innovation is moving fastest.

Breakthrough technologies such as AI and quantum computing are advancing rapidly. At the same time, AI-intensive industries, software companies and pharmaceutical companies continue to raise their research spending. The next wave of innovation is likely to come from actors that keep investing even when the broader climate is more cautious.

China is already central to that wave. Chinese AI labs are releasing open-weight models that are increasingly competitive with the leading systems of the United States, often at lower cost. That does not settle the AI race, but it does show that leadership is becoming more distributed. The EU cannot shape the future of AI if it remains outside the main centers of development.

Governance is the other half of the picture. On July 16, 29 countries signed an agreement in Shanghai to establish the World Artificial Intelligence Cooperation Organization. The new intergovernmental body is headquartered in Shanghai and is intended to support international cooperation on AI. Its creation shows that it is necessary for China to play a role not only in building AI systems, but also in shaping the rules around them.

That should matter to the EU. The EU has a vast market for AI applications, a solid research foundation and experience in setting trust frameworks. China brings scale, speed and industrial depth. Those strengths are different, but they are compatible. On issues such as safety testing, model evaluation, data governance and industrial deployment, there is room for concrete cooperation. The 12th CEIBS Europe Forum in Brussels was a useful reminder of that point. Its theme, "Competition or Complementarity? Strategic Opportunities in EU-China AI Development", captured the issue well. AI is now a matter of industrial policy, talent, governance and competitiveness, not just algorithms.

The EU and China do not need identical political systems or fully aligned policy agendas to work together. They need enough trust to keep channels open, enough curiosity to learn from each other and enough realism to focus on practical questions. How do we test powerful models? How do we ensure data security without blocking research? How do we support innovation while managing risk? These are the questions that will define the next decade.

The case for engagement is therefore straightforward. China is now too important to ignore in any serious discussion about the future of AI. The EU, for its part, has to be aware of the fact that its cooperation with China is mutually beneficial if it approaches the relationship with confidence. In a fragmented world, the responsible choice is not separation, but disciplined engagement.

Despite rising geopolitical uncertainties, Europe and China can complement each other strongly in terms of markets, industrial capabilities, and innovation ecosystems. China serves as a crucial market and innovation hub for European companies, whose deep engagement in the Chinese market is vital for maintaining their global competitiveness.

And AI will not be shaped by one country, one company or one region. It will be shaped by those willing to build bridges across systems, combine strengths and work through difficult questions together. For the EU and China, the conversation should continue and AI cooperation between the EU and China should be encouraged — not because it is easy, but because it is necessary.

The author is the executive director of the EU-China Business Association and the Flanders-China Chamber of Commerce. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.