The EU-China IP Dialogue Mechanism: A Casualty of Growing Geopolitical Rivalry, or a Possible Path Forward?

Introduction

Technological development has always been a matter of national security and economic competitiveness. At the same time, it is also a legal matter. Specifically, intellectual property rights (IPRs) play a fundamental role in ensuring that fair competition and legitimate trade are fostered. In an increasingly globalised economy, continuity in the recognition and enforcement of IPRs across different jurisdictions is therefore essential. This has led to international agreements such as the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), administered by the World Trade Organisation (WTO) with the purpose of setting minimum standards for international intellectual property (IP) protection, and to the necessity for dialogue in IP matters. For this reason, on 30 October 2003, European Union Commissioner for Trade Pascal Lamy and Vice Minister Wei Jianguo of the Chinese Ministry of Commerce agreed upon the establishment of a structured EU-China Dialogue Mechanism on IP. The mechanism aimed to foster constructive engagement by laying the foundations necessary for the convergence of China’s IP framework with global IP systems, thereby creating a more predictable and transparent environment in line with WTO agreements.

Yet, over two decades later, the Dialogue’s significance appears strained by a number of challenges. On one hand, divergent economic priorities have undermined efforts to support  regional policy enforcement. On the other, systemic rivalry centred on high-tech sectors has intensified, marking a deterioration of the EU-China relationship since 2019. Within this context, the evolving significance of the EU-China IP Dialogue raises a central question: has it become a casualty of rising technological rivalry, or can it still support the EU’s broader de-risking efforts? 

The EU-China IP Dialogue Mechanism: Scope, Purpose and Significance 

Established in 2003 and launched in 2004, the EU-China IP Dialogue Mechanism created a platform for discussion on IP matters between the EU and China, benefiting both Chinese and European businesses operating in China. At a time when China was consolidating its commitments to the WTO following its accession in 2001, the Dialogue reflected a shared understanding that IP governance was a fundamental pillar of sustainable trade. Its overarching aim was, therefore, to modernise China’s IP legislative and enforcement environment, supporting its convergence with the global IP system and thereby facilitating economic engagement. These changes were guided by the EU’s strategic goal of protecting its economic interests from infringements of IPRs in China, a major trade irritant.  Besides this technical function, it also served a diplomatic one, demonstrating that constructive engagement and competition could coexist. 

To this end, in the course of the past twenty years, a number of different initiatives have been enacted in the context of the Dialogue. Among those, the flagship initiative is arguably the IP Key China project; launched in 2014, it is fully funded by the EU, directed by the European Commission (EC) and implemented by the European Union Intellectual Property Office (EUIPO). In this sense, it should not be understood as a bilateral project, but rather as a means to secure strategic EU interests in China. Although initially set to last three years, its duration was later extended, and, as of 2025, IP Key stakeholder events are still held annually. Relevant stakeholders currently include both representatives of a number of EU bodies, as well as of the China National Intellectual Property Administration (CNIPA), the Supreme People’s Court of China (SPC) and the Ministry of Justice of the People’s Republic of China (MOJ), among others.

IP Key China’s biggest achievement is that it has been particularly effective in influencing the national Chinese IP legal framework. Key successes include, for instance, the creation of three specialised IP courts in Beijing, Shanghai and Guangzhou. Historically, weak judicial enforcement has posed a challenge to IP protection. These new courts represent a shared commitment to addressing the issue. Furthermore, the project has achieved increased transparency and accessibility through the integration of Chinese databases with international systems, such as the Trademark Office joining TMclass in 2014 and the State Intellectual Property Office joining Designview in 2015. Lastly – and perhaps more importantly – effective amendments have been made to China’s Copyright Law and Patent Law, assisting China in fulfilling its obligations under TRIPS, and supporting innovation in the domestic Chinese market. Overall, this has contributed to strengthening economic ties between the EU and China, by addressing European IP concerns. While the Dialogue Mechanism’s historical significance is clear, its ability to remain effective amid heightened geopolitical competition is increasingly uncertain. 

The Argument for Undermining Significance 

Chinese and European policy choices have increasingly diverged from the spirit of cooperation that once underpinned the Dialogue. The reason for this contrast lies in a shift in interests and priorities. China’s Made in China 2025 (MiC 2025) policy, launched in 2015, and the EU’s tripartite strategy, adopted in 2019, indicate fundamentally opposing approaches to technological competitiveness, which have significantly increased geopolitical rivalry between the two powers.

MiC 2025 signalled an important shift in China’s ambitions toward global leadership in high- tech production and a reduction in dependence on foreign technology. Particularly, the strategy targeted key emerging sectors, including artificial intelligence (AI), advanced semiconductors and new energy technologies. These priorities placed China in direct competition with the EU, whose economic prosperity depends heavily on the same sectors targeted by MiC 2025. This shift has therefore eroded the cooperative foundation on which the EU-China IP Dialogue Mechanism was built.

The EU’s response in 2019, which explicitly identified China as an economic competitor, should therefore be understood in this context. The strategy combined investment screenings, selective engagement and technological safeguards to protect strategic sectors. Brussels viewed China’s push for self-reliance as a direct challenge, since it was perceived as increasing the EU’s dependence on China and as relying on allegedly distortionary industrial policies. These concerns narrowed the space for constructive IP dialogue and have since spilled into legal disputes, most notably the 2025 WTO case on China’s anti-suit injunctions, which illustrates how these tensions have evolved.

The 2025 WTO Dispute 

In February 2022, the EU requested consultations with China, arguing that it had adopted an unwritten policy on anti-suit injunctions that violated Articles 28, 41 and 44 of TRIPS and Section 2(A)(2) of its Accession Protocol. To understand how this relates to rivalry in high-tech sectors, the concept of ASI needs to be firstly explained. 

An anti-suit injunction is a remedy that prevents one party from initiating or continuing legal action in another jurisdiction. Following a decision from the Supreme People’s Court of China, five ASIs were issued before Chinese courts. These were filed by Chinese companies implementing standard essential patents (SEPs) held by European patent holders, which require licences under fair, reasonable and non-discriminatory (FRAND) terms. By requesting these ASIs, implementers asked Chinese courts to be the ones to set the FRAND licensing rates for patents required for mobile telecommunication products. At the same time, they attempted to prevent patent holders from litigating in other jurisdictions. Such a policy risks undermining IP protection and enforcement systems in the targeted jurisdictions. In July 2025, on appeal, it was therefore ruled that the EU had successfully proven the existence of an unwritten ASI policy on behalf of China and the alleged TRIPS violations were confirmed. 

This dispute is a clear example of the intensifying geopolitical rivalry in the context of high-tech sectors, as it concerns mobile telecommunication products, a critical high-tech area where both powers have interests. At the same time, it suggests that the available channels of communication were not regarded as credible vehicles for resolving the issue through constructive dialogue. This is supported by the Commission’s statement that it had raised the matter with China on several occasions without reaching a resolution. Instead, the EU’s choice to pursue a WTO dispute reveals that the ASI policy frustrated trade to the extent that legal escalation was deemed more viable than existing cooperation mechanisms. This sets a clear precedent that indicates an increasingly interventionist approach by the EU. 

Investment Conditions on China

Following the limitations revealed by the ASI dispute, the EU is exploring additional ways of safeguarding its technological and economic interests. On 15 October 2025, Danish Foreign Minister and EU trade chief Lars Rasmussen discussed the EU comprehensive paper on economic security currently being examined by the European Commission. In this context, he mentioned that technology and IP transfers might become a precondition for Chinese investments in the EU. This would be in line with practices already incorporated by China and the United States, reflecting the principle of reciprocity. This proposal signals a policy shift for the EU, marking a departure from a traditionally more open investment model towards a more protective stance.

China has since criticised this move, stating that a forced technology transfer would constitute a “protectionist and discriminatory” practice. The proposal, however, could be understood as a defensive action that seeks to counterbalance China’s policies and protect strategic economic interests. It also highlights, once again, an increase in tension and rivalry in sectors where EU economic dependency on China is high. 

The 2025 Dutch seizure of Nexperia, a Chinese-owned semiconductor manufacturer, shows how the EU’s concerns shape the decisions taken at the Member State level. Dutch authorities temporarily seized the company on the basis of a never-before-used Cold War-era law, motivated by the fear that chip production would be moved to China. When analysed together, these measures imply that national security considerations are increasingly overriding economic cooperation mechanisms. As such, the EU-China IP Dialogue Mechanism appears constrained.

What is Left of the EU-China IP Dialogue Mechanism 

Despite being strained by geopolitical tensions, legal disputes and rivalry in high-tech, the question remains whether the EU-China IP Dialogue Mechanism can still drive cooperation. Arguably, that is still possible, although its scope may now be limited to narrow but strategically relevant sectors where mutual interest still converge. One such area could be found in technology governance, particularly in the field of emerging technologies such as generative AI. 

Both powers share mutual concerns regarding technological dependence and, in particular, neither wishes for a U.S.-dominated digital order. Furthermore, AI poses governance risks due to its ability to generate misinformation and deepfakes, which could threaten Party rule in China and decrease public trust in democratic institutions in the EU. This creates an area in which the vulnerabilities of China and the EU overlap. Although narrow, it is pressing and can therefore present a path forward for cooperation.

Within this field, the Mechanism can still uphold its role as a channel for constructive engagement. Despite current tensions, the 2025 Annual Stakeholder Event of IP Key China, during which AI was a central topic of discussion, demonstrates that experts and policymakers remain able and willing to engage with each other bilaterally and in a spirit of cooperation. At the same time, it is worth noting that, as previously mentioned, IP Key China is unilaterally funded by the EU. This somewhat undermines the extent to which the stakeholder events actually indicate a strong policy commitment.

In any case, by steering its focus toward shared technological risks and transparent AI governance, the Mechanism could retain some practical relevance within the EU’s broader de-risking strategy.

Conclusion 

In conclusion, the EU-China IP Dialogue Mechanism, despite its initial effectiveness in supporting IP reforms within China and fostering cooperation, is now being challenged.  The main obstacle to its ability to enhance constructive engagement is the rise in geopolitical tension between the EU and China, mostly driven by rivalry in high-tech sectors such as semiconductor manufacturing. This has led both powers to shift their policies in line with national interest and security objectives. Recent examples illustrating how these policies undermine cooperation include the WTO Dispute on the ASI policy, in which legal confrontation was preferred to communication, and the potential introduction of investment conditions targeting Chinese investors. These developments have narrowed the scope of the Mechanism, yet they have not necessarily erased its ability to make an impact.

By concentrating on areas of mutual interest, particularly AI governance, the Mechanism could still support targeted cooperation, help manage shared risks, and maintain structured engagement despite intensifying rivalry.

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ABOUT THE AUTHOR

Martina Maxia is a master’s student in Intellectual Property and Knowledge Management at Maastricht University. She earned her Bachelor of Laws in European Law, during which she spent a semester on exchange at the University of Hong Kong, studying Chinese and Hong Kong law and volunteering at the Hong Kong Dignity Institute, a human rights legal clinic.

This article was edited by Nina Thinnes and Camilla Penserini

Featured Image: Beijing Intellectual Property Court (北京知识产权法院) Free for use / Creative Commons Attribution-Share Alike 4.0 International / Wikimedia Commons