Europe’s defence supply chains share considerable overlap with the low-carbon sector. They rely on many of the same materials, components, technologies, and manufacturing techniques. So as China’s dominance of low-carbon technologies grows, Europe’s defence sector will very likely also become more dependent on China.

There is a particular vulnerability around rare earth magnets and batteries. These are two of the most important components for modern warfare as it becomes more high-tech and autonomous. Many advanced weapons systems, not least drones, require magnets and batteries, and China is the leading producer of both. There was deep concern in Europe when China tightened export controls on magnets in mid-2025, and threatened to limit exports of some of its battery technologies in October 2025. In December 2025, the US National Defense Authorization Act introduced limits on US military purchases of batteries from ‘foreign entities of concern’, in an effort to address this dependency.

Beyond specific supply chain dependencies, there is also a risk to the European defence industrial base from ceding advanced manufacturing to China. Should a conflict arise, Europe’s high-tech industrial base – equipment, technologies, workforce, knowhow – could have been quickly repurposed for the development and production of advanced military capabilities, as was the case during the Second World War. Today, this capacity is weaker. Meanwhile, China’s policy of ‘civil-military fusion’ means that Chinese companies gaining control or influence in Europe’s advanced technology sectors can directly contribute to the development of PLA military capabilities.