Take the ‘Sanchez Way’

By Waldemar Karpa | China Daily Global | Updated: 2026-06-17 01:30

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The future of EU-China relations lies not in fortress-like trade defenses, but in the cooperative, competitive and deeply integrated statecraft of the green frontier

As the European Union moves to tighten trade defenses against Chinese green technologies recently, Spain is quietly testing a different approach. Rather than treating China’s manufacturing strength only as a threat, Madrid is seeking to turn it into localized investment, industrial capacity and green-transition momentum. This contrast makes the “Sanchez Way” more than a bilateral story; it is a test of whether Europe can move beyond defensive protectionism and build a more pragmatic relationship with China.

President Xi Jinping and visiting Spanish Prime Minister Pedro Sanchez declared on April 14 that China and Spain should strengthen cooperation, oppose a return to “the law of the jungle” in international relations and jointly defend true multilateralism. While Brussels and Paris are erecting tariff walls against ultra-competitive Chinese green technologies out of concerns over a second “China Shock”, Madrid has quietly pioneered a different path.

This was Sanchez’s fourth visit to China in four years, a sustained diplomatic courtship culminating in what can only be described as the “Sanchez Way”: a pragmatically cooperative approach to the green transition that treats ecological statecraft as an instrument of national industrial sovereignty rather than a luxury of climate diplomacy.

The timing was exquisite. On May 28, Spain dramatically withdrew its support for a French-led initiative to bolster the European Union’s trade defences against China. The non-paper, co-signed by Italy and the Netherlands, had sought sweeping new powers to investigate market distortions and penalize Chinese imports. Within days of its technical drafting, Spain’s Minister of Economy Carlos Cuerpo said there was “no specific political support” for such measures, calling instead for engagement with China “from equal to equal, on an equal footing”. This sudden reversal underscores a deeper European schism: while the European Commission seeks to de-risk and insulate, Spain has recognized a fundamental industrial reality — Europe cannot achieve its ambitious net-zero targets without China’s manufacturing scale, and China cannot sustain its export-driven green expansion without Europe’s affluent markets.

To understand the “Sanchez Way” is to examine the Iberian Peninsula’s rapid transformation into China’s premier green gateway to the European continent. Rather than viewing Chinese electric vehicles and lithium-ion batteries as existential threats to domestic manufacturing, Sanchez has actively courted Chinese greenfield investment, successfully transforming potential import competition into localized industrial partnerships.

The crown jewel of this strategy is the 400 million euros ($468 million) joint venture between China’s Chery Automobile and Spain’s Ebro-EV Motors in Barcelona’s historic Zona Franca. The facility, which rolled out its first S700 SUV in late 2024, is on track to produce 50,000 vehicles annually by 2027, scaling up to 150,000 by 2029. Chery thus becomes the first Chinese automaker to manufacture passenger vehicles on European soil, reducing its exposure to EU countervailing duties by localizing production and employing Spanish workers. In Zaragoza, global battery giant CATL has entered into a 4.1 billion euros ($4.8 billion) joint venture with Stellantis to construct a massive gigafactory, which is projected to reach up to 50 GWh in annual capacity. By offering skilled labor at costs below the Western European average, coupled with robust logistics hubs in Valencia and Bilbao, where Chinese State-owned COSCO holds major port concessions, Spain has made itself indispensable to China’s “produce globally, serve globally” model.

This Spanish model finds a fascinating echo in Central Europe. On May 26, at Kozminski University in Warsaw, China’s Ambassador to Poland Lu Shan delivered a landmark address counting green transition not as a geopolitical battleground, but as a shared industrial frontier. Poland, much like Spain, is a critical swing state in Europe’s climate future. As the ambassador noted, both nations share remarkably similar structural constraints: deep coal dependency, energy-intensive industrial bases, high sensitivity to transition costs and an acute anxiety that premature decarbonization will hollow out manufacturing competitiveness.

Ambassador Lu’s message to the Polish business and academic elite was one of industrial optimism. The energy sector, he argued, has undergone a profound ontological shift: from a model reliant on resource endowment to one dependent on technology and manufacturing capability. Between 2012 and 2024, China sustained an average annual economic growth of 6.1 percent, with only 3.4 percent annual growth in energy consumption, while clean energy grew to represent 11.4 percent of GDP in 2025. Poland, already home to one of Europe’s largest battery manufacturing clusters, could replicate the “Sanchez Way” by combining its robust industrial infrastructure with Chinese supply-chain efficiency and capital. As Ambassador Lu explicitly stated: “The scale advantage of China’s new energy industry can help Poland lower transition costs and accelerate its pace.” Rather than treating “de-risking” as a euphemism for protectionist decoupling, Central European nations can leverage Chinese technology to build their own domestic green resilience.

The friction between Brussels and Beijing stems from a fundamental divergence in how both blocs conceptualize decarbonization. The EU has pursued a demand-side, regulatory approach: the Emissions Trading System puts a carbon price of approximately 78 euros per ton, internalizing pollution costs to force behavioral shifts. China, by contrast, has adopted a supply-side, industry-first model — supplying global markets with affordable green technologies while maintaining a much lower carbon price of around 11 euros per ton and still burning half the world’s coal. Yet this supply-side surge has performed a global public good: by investing over $50 billion in solar photovoltaic supply chains, China has single-handedly made solar the cheapest source of electricity in most parts of the world.

Pure sectoral protectionism is ecologically self-defeating: it will raise transition costs for European utilities and consumers without reviving domestic manufacturing that has already been outcompeted.

To transcend this gridlock, the EU and China must move beyond the binary of capitulation or protectionism. Five recommendations offer a blueprint for ecological realpolitik.

First, establish a greenfield localization protocol, offering tariff exemptions to Chinese manufacturers who localize supply chains and employ European labor — the Chery-Barcelona model scaled continent-wide. Second, calibrate the carbon border adjustment mechanism with carbon market linkage, granting partial relief to Chinese exporters that verifiably use certified green electricity. Third, forge a circular economy compact with joint battery recycling standards and “health passports” for critical minerals. Fourth, launch triangular partnerships in the Global South, combining Chinese manufacturing efficiency with European green finance and ESG governance. Fifth, integrate China into the Coalition of Trade Ministers on Climate to formalize rules distinguishing legitimate green subsidies from market-distorting state aid.

The “Sanchez Way” is neither naive appeasement nor European weakness. It represents a clear-eyed recognition that, in an era where climate change has breached the 1.5 C threshold and threatens to cross 2 C by 2045, treating the green transition as a geopolitical football is a luxury the planet cannot afford. The future of EU-China relations lies not in fortress-like trade defenses, but in the cooperative, competitive, and deeply integrated statecraft of the green frontier.