Innovation as a Bridge: Rethinking EU and China Relations Through Shared Problem-Solving

What happens when two interconnected innovation systems begin to drift apart politically? This question increasingly defines the evolving EU–China relationship. European policymakers speak of de-risking and strategic technological dependencies, while China is accelerating efforts towards technological self-reliance. For EU policymakers, the question is how to reduce strategic dependencies without losing access to Chinese resources and manufacturing scale.  For Chinese policymakers, the concern is pursuing technological self-reliance without being locked out of European knowledge networks and markets. The narratives emerging on both sides suggest a gradual disentangling of innovation systems that were once interconnected, and risk leading both actors to a lose-lose outcome.

Yet beneath these geopolitical tensions, networks of researchers, engineers, designers, and entrepreneurs continue to collaborate across borders. These professional communities exchange knowledge and develop technologies together, often operating outside the formal sphere of diplomacy. Such innovation networks can function as a form of problem-solving diplomacy, sustaining engagement even as political relations become more competitive. In this context, innovation and technological collaboration have frequently acted as stabilising elements within an otherwise complex relationship. EU–China relations have historically balanced political engagement and economic interdependence, oscillating between cooperation and competition. 

As global challenges increasingly transcend national borders, neutral grounds for cooperation become essential. Issues like climate change, rapid urbanisation, and public health crises benefit from collaborative experimentation, technological development, and shared knowledge. Innovation – particularly when organised around concrete problem-solving – offers a viable channel through which the EU and China can continue to engage constructively. Despite frictions, structured forms of innovation diplomacy, such as joint research laboratories, shared standards development, and mission-driven projects, allow both sides to co-invent practical solutions while navigating strategic competition.

Innovation Networks as Informal Diplomatic Channels

Innovation goes beyond technological progress. It is systemic and profoundly impacts society – shaping not only products and technologies, but also services, social systems, and cultural practices. At its core, innovation emerges when knowledge, creativity, and practical problem-solving intersect within networks of people. It relies on the flow of ideas, experimentation, prototyping, and iterative learning, often crossing national boundaries. By nature, innovation is collaborative: breakthroughs rarely emerge alone, depending instead on shared expertise, resources, and collaborative environments.

This inherent transboundary character of innovation gives it potential as a diplomatic channel. Unlike formal government negotiations, which are constrained by rigid political priorities, innovation networks operate in spaces defined by technical challenges, shared goals, and mutual benefit. When collaboration is grounded in solving tangible challenges rather than negotiating abstract political interests, these networks are largely resilient to fluctuations in official political relations.

EU–China innovation collaboration has historically been institutionalised through formal agreements. The 1998 Agreement on Scientific and Technological Cooperation established long-term structures for joint research, later reinforced by the EU–China Innovation Cooperation Dialogue in 2012. These frameworks support professional and technical networks that persist even when political ties are strained. European research programmes have played a critical role in sustaining these networks: Horizon 2020 and Horizon Europe have funded hundreds of joint projects with Chinese participation. During Horizon 2020 alone, China was among the most active non-EU partners, contributing across sectors such as sustainable urban development, advanced manufacturing, and biotechnology. Yet, this history of collaboration faces growing strain.

These networks rely on trust, tacit knowledge, and long-term collaboration. But how do they build trust? Research identifies one mechanism: universities can act as intermediaries that match suitable industrial partners, build trust between them, and reduce the perceived risk of cross-border collaboration. Even when political trust erodes, continuity endures where material independence, institutional frameworks, and shared functional interests are strong. Engineers and designers translate technical concepts, adapt solutions to different industrial environments, and integrate diverse approaches. Over time, this fosters shared professional cultures that transcend political boundaries. By fostering experimentation, iteration, and mutual learning, innovation processes create conditions that strengthen diplomatic engagement, enabling cooperation even when formal relations face tension.

Thus, innovation networks do more than produce new technologies or products: they constitute a distributed, practical infrastructure of diplomacy. By enabling continuous collaboration around concrete challenges, these networks sustain engagement, create trust, and maintain the flow of knowledge between the EU and China. The systemic and collaborative nature of innovation makes it a durable and neutral channel for engagement amid strategic competition.

EU–China smart city collaborations illustrate this dynamic in practice. A range of joint projects have linked Chinese and European cities through technical cooperation on urban systems, including energy efficiency, mobility, and data-driven infrastructure. Barcelona and Huawei started a partnership to develop smart city infrastructure, with a focus on technology transfer and skills development at Huawei Spain Academy in 2025. The SMART-ECO project connected Shenzhen, Wuhan, Ningbo with European counterparts such as Manchester and Amsterdam. The IMTECC project has facilitated collaboration between Hangzhou, Copenhagen, and Paris, on urban mobility and emissions reduction. While political dialogue between governments is becoming more constrained, as seen in the 2021 mutual sanctions, technical working groups often continue to operate, demonstrating how functional collaboration can persist in parallel to geopolitical tension.

The success of EU–China innovation collaboration can largely be explained by the complementary nature of their structurally different innovation systems – one oriented toward upstream research and regulation, the other toward downstream industrialisation and scale. The EU possesses strong capabilities in fundamental research, engineering expertise, and design-driven innovation. Its universities and research institutions are globally influential, and its regulatory frameworks, particularly in sustainability, product safety, and life-cycle standards, shape global markets. China’s system emphasises industrial scale, ecosystem integration, and rapid execution. Over the past four decades, it has built one of the world’s most comprehensive manufacturing ecosystems, supported by dense supply chains and specialised industrial clusters. At the same time, China is increasingly investing in technological self-reliance, particularly in critical sectors such as semiconductors and artificial intelligence, reflecting a shift toward greater control. Together, these strengths create synergies, but also introduce new tensions while coexisting with strategic competition.

Rising Tensions and the Risk of Innovation Fragmentation

The landscape of EU–China innovation is becoming increasingly complex. European policymakers have introduced measures to reduce strategic dependencies in critical supply chains, while China strengthens domestic technological capabilities. These developments are part of a broader de-risking strategy, which seeks to balance continued engagement with China while reducing vulnerabilities in strategically sensitive sectors. Policy discussions have highlighted the need to diversify supply chains while maintaining selective cooperation in research and innovation, as outlined in the Bruegel report on “de-risking” EU–China economic relations. Similarly, analysts emphasise that EU–China relations are entering a new phase characterised by a mix of partnership, economic competition, and systemic rivalry. While these policies reflect legitimate economic and security concerns, they also risk fragmenting previously interconnected innovation ecosystems, increasing duplication of research efforts and slowing the diffusion of knowledge across borders.

Technological decoupling carries significant consequences. Export controls, investment screening, and technological security concerns are pushing both sides towards greater separation. Duplicated research efforts and slower technological progress reduce the capacity to address global challenges. Innovation thrives on cross-border knowledge exchange, so isolating ecosystems could weaken both regions’ ability to address complex global challenges. This raises the question: how can collaboration be sustained despite these pressures?

Innovation Diplomacy and Joint Problem-Solving

In this context, the concept of innovation diplomacy becomes increasingly relevant. Rather than focusing on the negotiation of political positions, innovation diplomacy centres on collaborative problem-solving. It operates through the co-development of solutions to shared technical problems. Innovation systems are inherently distributed: engineers borrow ideas from suppliers, researchers build on datasets shared across borders, and designers translate policy ambitions into manufacturable products. Knowledge flows through networks that rarely align neatly with national boundaries. Problem-solving diplomacy begins with a shared challenge – problems that are large and pressing enough that the benefit of collaboration is apparent compared to a single country solving them alone. This shifts the diplomatic logic: instead of aligning interests first and acting second, actors collaborate directly on problem-solving, allowing alignment to emerge through practice.

Several global challenges stand out as promising fields for innovation and collaboration. Both regions are major contributors to global greenhouse gas emissions but leaders in renewable energy, making joint research and deployment possible for accelerating the energy transition. Rapid urban development in China and Europe’s experience with sustainable city planning, mobility, and energy-efficient systems provide complementary lessons that could shape innovative urban models. Public health cooperation also proved critical during the COVID-19 pandemic, which demonstrated the importance of global research collaboration, rapid data exchange, and coordinated technology development in responding to health crises. Pressures on food systems, water management, and resource efficiency further highlight how shared global challenges can create platforms for constructive engagement.

Addressing these global challenges also expands the range of actors involved in international engagement. Universities, research institutes, start-ups, designers, engineers, and supply chain specialists all contribute to innovation processes. Because their work focuses on practical outcomes rather than ideological alignment, these networks often remain resilient even during periods of political tension. They form a distributed diplomatic infrastructure grounded in shared technical goals.

The Circular Economy as a Case Study

The collaborative transition towards a circular economy provides an illustration of how innovation can function as a diplomatic channel. The circular economy seeks to redesign industrial systems so that materials remain in use for longer periods through reuse, repair, recycling, and regenerative production models. Unlike traditional linear models of extraction, production, and disposal, a circular economy creates a closed loop where products are designed for repair, materials are reused, and waste is minimised at every stage. The concept gained global visibility through research such as the report Towards the Circular Economy by the Ellen MacArthur Foundation, which demonstrates how circular systems could generate both environmental and economic value.

The EU has emerged as a major policy leader in this domain. Its European Green Deal framework sets out a roadmap for climate neutrality and industrial transformation, supporting initiatives such as the Clean Industrial Deal, which strengthens green competitiveness, while the Circular Economy Act targets product design, material efficiency, and recycling. China complements this regulatory leadership with large-scale implementation capabilities. China’s Circular Economy Promotion Law has encouraged investment in recycling infrastructure, industrial symbiosis, and resource recovery technologies across the country. Together, these complementary approaches create opportunities for collaboration.

Concrete collaboration already happens through research and industry networks. Umicore, the Belgian materials group, has operated in China for over 40 years, and in 2026 opened its first corporate R&D facility in Shanghai focused on battery recycling and fuel cell technologies. The AgriLoop project, a EU–China collaboration led by the French National Research Institute for Agriculture, Food and Environment (INRAE) and the Chinese Academy of Agricultural Sciences (CAAS), develops bio-based products from agricultural residues. The University of Warwick and China Agricultural University have maintained a sixteen-year research partnership on sustainable farming. University of Cambridge and Tsinghua University have worked together on battery supply chain sustainability. These are practical, problem-driven initiatives that show that regulatory alignment can create a permissive environment for industry collaboration, and that long-term partnerships can build trust that survives crises. These are conditions that enable continuity when political signals are mixed. This suggests that protecting existing networks is a strategic interest, especially during periods of tension.

Innovation diplomacy is not about ignoring real risks. In strategically sensitive areas, such as semiconductors, AI, quantum computing, trust is low and collaboration is difficult. Informal networks could also be exploited for technology transfer that circumvents legitimate export controls. The challenge is to design guardrails that enable collaboration on shared public goods while preventing strategic harm. The question is under what conditions collaboration can be attempted. Imagine a future with a circular product system designed under European sustainability standards, manufactured within China’s industrial ecosystems, and distributed through global supply chains: batteries designed for disassembly; electronics built with traceable materials; manufacturing systems in which waste from one industry becomes feedstock for another. In this scenario, diplomacy does not occur primarily through political negotiation, but through system design. Designers rethink product architectures to enable repair and reuse. Engineers develop new recycling technologies. Policymakers define standards that shape how materials circulate globally. Each step becomes part of a larger collaborative experiment.

Circular economy initiatives illustrate something important about EU–China relations: when collaboration focuses on incentives and moves away from ideological differences, the right framework makes finding common ground possible. Certainly, barriers remain: concerns over intellectual property, data issues, trade tensions, and differing regulatory approaches complicate cooperation. Trust between political institutions has weakened in recent years, but innovation diplomacy often operates below the level of formal politics. Universities continue to collaborate on research, engineers maintain professional networks that span continents, start-ups explore joint ventures around emerging technologies, and standards bodies convene experts to define technical rules for new industries. These actors form the connective tissue of global innovation systems, and their work is practical, solving problems, testing prototypes, and refining designs.

Co-Inventing the Future Together

The future of EU–China relations will likely remain complex, yet innovation systems provide a space where competition and cooperation can coexist. Countries may compete in developing technologies while simultaneously collaborating to address shared global challenges. Engineers, designers, and scientists – often working quietly behind the scenes – become the agents of this practical diplomacy, translating policy and technical ambitions into tangible solutions.

By sustaining transborder networks of knowledge exchange and co-creation, innovation can buffer the relationship against political volatility, supporting long-term trust-building and mutual understanding at the professional and societal level. Co-inventing solutions together demonstrates that, even amid competition, shared interests and systemic challenges can align, producing benefits that neither side could achieve better alone.

In an uncertain geopolitical climate, the ability to invent together may prove one of the most resilient foundations for constructive EU–China engagement. Innovation is not only about technological progress, but is also a mechanism for sustaining dialogue, creating shared knowledge, and building bridges that connect societies, institutions, and industrial systems in ways that politics alone cannot. Ultimately, it illustrates that collaboration and competition are not mutually exclusive, but can coexist productively in shaping the future of EU–China relations.

The views expressed in this article belong to the author(s) alone and do not necessarily reflect those of European Guanxi.

ABOUT THE AUTHOR

Veronica Lin is an Italian-Chinese innovation strategist and creative, with expertise in product design, systems thinking, and technology-driven solutions. With over a decade of professional experience, she has collaborated with brands across Europe, North America, and Asia, with a particular interest in cross-cultural collaboration and sustainability. Veronica’s work has been recognised with the iF Design Award, IDEA Award, Good Design Award, and Fast Company Innovation by Design Award, featured in Designmilk, MoreWithLessDesign, and Azure Magazine, and she has served as an invited speaker and panellist at forums including the AI Summit 2024, Women Leadership Summit 2024, NewLab New Climate Futures. 

Originally from Florence, Italy, Veronica graduated from Rochester Institute of Technology (U.S.). Today, Veronica leads StudioV, a multidisciplinary studio operating between Italy and Shanghai, where she explores how design, technology, and collaborative problem-solving can address complex global challenges.

This article was edited by Daria Bogolyubova and Mengfei Xu.

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