On the security and defence implications of China’s influence on critical infrastructure in the European Union

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the security and defence Implications of China influence on critical infrastructure in the European Union

(2023/2072(INI))

The European Parliament,

– having regard to the Treaty on the Functioning of the European Union,

– having regard to Title V of the Treaty on European Union, in particular Chapter Two, Section Two thereof on provisions on the common security and defence policy,

– having regard to the ‘Strategic Compass for Security and Defence – For a European Union that protects its citizens, values and interests and contributes to international peace and security’, approved by the Council on 21 March 2022 and endorsed by the European Council on 25 March 2022,

– having regard to the Versailles Declaration, adopted at the informal meeting of the Heads of State or Government on 11 March 2022,

– having regard the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 20 June 2023 on European economic security strategy (JOIN(2023)0020),

– having regard to Directive (EU) 2022/2557 of the European Parliament and of the Council of 14 December 2022 on the resilience of critical entities and repealing Council Directive 2008/114/EC (Resilience of Critical Entities Directive),

– having regard to Directive (EU) 2022/2555 of the European Parliament and of the Council of 14 December 2022 on measures for a high common level of cybersecurity across the Union, amending Regulation (EU) No 910/2014 and Directive (EU) 2018/1972, and repealing Directive (EU) 2016/1148 (NIS 2 Directive),

– having regard to the Council Recommendation of 8 December 2022 on a Union-wide coordinated approach to strengthen the resilience of critical infrastructure,

– having regard to the Vilnius Summit Communiqué, issued by the NATO heads of state and government participating in the meeting of the North Atlantic Council in Vilnius on 11 July 2023,

– having regard to Regulation (EU) 2023/XXXX of [date] of the European Parliament and of the Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem (Chips Act),

– having regard to the Commission proposal of 15 September 2022 for a regulation of the European Parliament and of the Council on horizontal cybersecurity requirements for products with digital elements and amending Regulation (EU) 2019/1020 (COM(2022)0454),

– having regard to Rule 54 of its Rules of Procedure,

– having regard to the opinion of the Committee on International Trade,

– having regard to the report of the Committee on Foreign Affairs (A9-0000/2023),

A. whereas the recent joint communication on a European economic security strategy focuses on minimising the risks arising from certain economic flows in the context of increased geopolitical tensions and accelerated technological shifts, while preserving maximum economic openness and dynamism;

B. whereas the Resilience of Critical Entities Directive and the NIS 2 Directive provide a comprehensive legal framework to strengthen both the physical and digital resilience of critical infrastructure, including that related to energy, transport, health, digital infrastructure, water and food;

C. whereas since the Council Recommendation of December 8 2022 was issued, targeted actions are already being carried out to ensure a common EU response to incidents, including by strengthening coordination with NATO through the EU-NATO Task Force on the resilience of critical infrastructure embedded in the NATO-EU Structured Dialogue on Resilience;

D. whereas the coercive policies and the growing assertiveness of the People’s Republic of China (PRC), including its aggressive stance towards Taiwan, as well as the social and economic consequences of the COVID-19 pandemic and the Russian war of aggression against Ukraine have exposed the EU’s vulnerabilities and reaffirmed the need to ‘de-risk’ its relations vis-à-vis the PRC and other non-democratic third countries;

E. whereas China’s acquisition of critical infrastructure, especially in the EU’s neighbourhood, including the Western Balkans, poses an increasing risk to the trade-security nexus;

F. whereas the Sino-Russian strategic partnership continues to grow, including in the areas of technology and military capability transfers;

The core of the problem: understanding China’s military-civil fusion strategy

1. Underlines that China’s military-civil fusion (MCF) strategy is a state-led, state-directed programme and plan to instrumentalise all levers of state and commercial power to strengthen and support the People’s Liberation Army (PLA), the armed wing of the Chinese Communist Party (CCP);

2. Considers that China’s party-driven political system and economy often require private companies to align their commercial interests with the CCP’s military, repression and political interference activities; highlights that, consequentially, Chinese companies’ international activities help the CCP to expand its influence over foreign countries and undermine geopolitical rivals;

3. Believes that MCF must be understood in a larger political and strategic context, taking into account its interconnections with other initiatives, such as the Belt and Road Initiative (including the Digital Silk Road); believes that the ultimate aim of MCF is to advance China’s long-term strategic goal to become the world’s leading power;

Consequences of the PRC’s civil-military strategy

4. Warns of the risk of Chinese companies having any involvement with EU strategic assets, especially those companies that have direct or indirect links to China’s military system; underlines, in this regard, its concern that technology and technological expertise will be transferred to China’s military, increasing the PLA’s ability to develop the next generation of military technology, which may be used to coerce partners in Asia and around the world;

5. Emphasises that China produces 70 % of the world’s batteries (hosting three of the top five battery manufacturing giants), accounts for 60 % of global aluminium production and 75 % of silicon production, is the leading refiner of 60 % of lithium and 70 % of copper processing and produces 84 % of the world’s nickel and 85 % of its cobalt; underlines that Chinese mining companies are active in the Democratic Republic of Congo (cobalt), Indonesia (nickel) and Chile and Australia (lithium) and that its quasi-monopoly on the production and processing of these critical commodities presents not only an acute geopolitical challenge for the EU, but also a huge risk for Europe’s defence and other industrial sectors;

6. Recalls that both diplomatic and military communication travels through privately owned undersea cables provided by Chinese companies, such as HMN Technologies, a PLA cyber intelligence–affiliated entity; expresses its grave concern over the undersea data cable systems operated by Chinese company HMN Technologies, which connect EU Member States’ territories and the Indo-Pacific region, including Member State and NATO military bases in the region, creating security vulnerabilities as regards underwater surveillance and the collection of intelligence;

Developing responses: expanding the toolkit to respond to security and defence concerns

7. Warns that the deterioration in the security environment in Europe and around the globe requires urgent reflection on how to strengthen the EU’s strategic autonomy and reduce its dependencies on countries like the PRC that are systemic rivals, not strategic partners; stresses the need to prevent sensitive emerging technologies and key dual-use items from being leaked to destinations of concern that pursue or collaborate in MCF strategies;

8. Remains concerned that European critical infrastructure is becoming increasingly vulnerable to external influence; commends, in this respect, recent legislative steps to enhance the resilience of critical entities in the EU; notes with concern, however, that such initiatives are largely limited to screening procedures for foreign direct investment, leaving other channels open for the CCP to gain access and influence over critical assets;

9. Notes that the screening of stakeholders with access to critical infrastructure cannot be limited to direct investment; calls for the current instruments that address foreign direct investment and foreign subsidies to be expanded to include generalised screening procedures for all stakeholders involved in EU critical infrastructure projects; calls on the Commission, with the support of the Member States, to map, track and assess China’s access to critical infrastructure in the EU; stresses that the Member States are ultimately responsible for infrastructure protection, but have not consistently implemented current guidelines on foreign direct investment or set up national-level investment-screening mechanisms;

10. Welcomes the potential of the Commission’s proposal for a European economic security strategy to expand the EU toolkit to exports or outward investments in a narrow set of key enabling technologies with military applications, inter alia, in the areas of quantum computing, advanced semiconductors and artificial intelligence; calls for the swift adoption of the Commission’s proposals and for the Member States to fully implement the EU’s expanded regulatory framework to exclude entities that could contribute to MCF;

11. Further welcomes the Commission’s proposal to prevent the leakage of sensitive emerging technologies by establishing a list of dual-use technologies, based on narrowly defined and forward-looking criteria, such as the potential enabling and transformative nature of a technology, the risk of MCF and the risk of the technology being misused to violate human rights; calls on the Commission and the Member States to identify and implement the relevant protection measures for these dual-use technologies as soon as possible;

12. Welcomes the adoption of the European Chips Act, which will increase the EU’s ability to produce semiconductors and create a strategic map of, inter alia, capability gaps in the semiconductor value chain in the EU, thereby limiting the EU’s dependence on third countries such as China; calls for further proposals to secure the production and supply chains of critical infrastructure and material within the EU;

13. Calls on the Commission to propose a new legislative framework to mitigate the security risks coming from the suppliers of undersea cable systems; stresses the need to prevent cable system suppliers, such as Chinese companies, from sharing data with intelligence services other than to protect the infrastructure from outside intrusions or malignant attacks;

Internal-external nexus: strengthening the resilience of the EU’s closest partners

14. Is cognisant of the PRC’s penetration of the EU market and its wider neighbourhood; calls on the Commission and the European External Action Service (EEAS) to ensure that the measures taken to strengthen the resilience of the EU in the face of Chinese influence are also extended to the EU’s closest partners, in particular accession countries and those part of the EUs neighbourhood policy;

15. Recalls that the PRC’s naval forces have legal tools to ensure that China’s civilian ships and infrastructure can be used for military and security purposes; considers that China can use its civilian commercial infrastructure to support the PLA’s presence in third countries; warns that such MCF provides the PLA with access to foreign ports, enabling it to pre-position logistics support to sustain naval deployments as far afield as the Indian Ocean, the Mediterranean Sea and the Atlantic Ocean; underlines that the risks of espionage are highest when Chinese civilian commercial assets are located in logistical hubs close to EU and NATO naval bases or port operators that have signed agreements to provide logistical support to European companies;

16. Notes that one third of all African infrastructure built since 2010 has been financed and constructed by Chinese state-owned enterprises; underlines that, over the past 20 years, China has increased its trade, investment and loan commitments with few or opaque contractual obligations; expresses concern that this Chinese model is clearly attractive to many countries that cannot satisfy EU requirements for accessing equivalent levels of finance, thereby expanding Chinese influence to the detriment of EU partnerships; calls on the Commission and the EEAS to ensure that the EU’s high standards for investment with partners do not compromise it security relationships and engagement as a reliable and strategic partner;

17. Underlines with concern the PRC’s strategy to build a ‘blue economy cooperation base’ along the coast of Africa, including through the construction of fishing vessels and vessel repairs facilities, which can also be used for military purposes; stresses that there is a general lack of detail and transparency on these agreements and licences with African countries; outlines the potential geopolitical consequences for the EU, especially in third countries where the EU is engaged;

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18. Instructs its President to forward this resolution to the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy, the Council and the Commission.