Spain and China are growing closer, to the frustration of many in the EU

In Barcelona’s streets, bright red-and-gold Chinese dragons — presumably with very sweaty people inside the costumes — moved through cheering crowds, while Chinese acrobats drew gasps as they rolled, tossed and hurled spherical lanterns into the air, somehow keeping the candle inside each one upright at all times.

This week, Shanghai made history as the first Asian metropolis invited as the city of honour to Barcelona’s famously lively La Merce festival. The city’s huge street processions are usually devoted to celebrating centuries-old Catalan traditions. So it was striking to see velvet-clad Catalan pipers striding down Barcelona’s main boulevards, their medieval melodies blending with the lilting music accompanying groups of brightly dressed Chinese performers.

Shanghai’s deputy mayor, Lu Shan, travelled to Barcelona to speak at La Merce’s opening ceremony. Chinese and Catalan cultural traditions may differ in form, he said, but they share “a common spirit”.

Spain and China are in a phase of mutual warmth. But that feeling is not shared across the EU.

Spanish Prime Minister Pedro Sanchez has met China’s President Xi Jinping four times in four years. Since Donald Trump’s re-election two years ago, he has urged the EU as a whole to improve ties with China.

That has caused irritation and resentment among several of Spain’s European partners, who see Beijing as a strategic rival and a possible geopolitical threat to the EU. Privately, they wonder whether Madrid’s welcoming approach — opening its market to Chinese businesses — is helping China become the bloc’s economic enemy from within.

Pedro Sanchez is not the only EU leader moving off the usual path. Global instability has left other EU countries feeling squeezed, exposed and unsure they can depend on America under President Trump. His trade and defence policy is viewed as unpredictable and sometimes aggressive. As a result, EU member states are choosing strategic partners they believe fit their national interests, even if that annoys or alienates fellow members.

So do these new alliances threaten to permanently fracture EU unity, or even Nato?

Germany and France, the EU’s two biggest powers, have just aligned behind a tougher stance on China. They want Brussels to have the power to shut subsidised Chinese rivals out of the EU market in order to tackle ballooning trade imbalances with Beijing, which the European Commission says have reached a staggering €1bn (£850m) a day.

Other EU countries are uneasy about China’s close ties with Russia. Beijing denies aiding Moscow’s war effort in Ukraine, but defence experts point to Chinese technological and economic support that they say has helped Russia keep up its military assault.

That is why Spain, as it eagerly courts Beijing, is accused of putting its own interests ahead of broader European ones.

“It’s a bit chicken and egg. Did Spain distance itself from European allies, or did they distance themselves from us?” asks Victor Cortizo, a lawyer and academic who specialises in Sino-Spanish relations.

“I think it’s more us. It’s Spain. But legitimately so. Realpolitik is a thing. If I get closer to China because that attracts Chinese investment and bolsters my economy, then that is strategically more appealing than supporting allies who are also only looking out for themselves.”

Cortizo and I were speaking beside towers of crates at the end of the world’s longest freight rail link. The route stretches more than 13,000km (8,000 miles) between Yiwu in eastern China and Madrid, mostly carrying car parts and electrical goods to Spain and taking delicacies such as Spanish ham and red wine back to China. The line symbolises the fast-growing relationship between the two countries.

“Our prime minister has made the decision to pursue national gain over EU relations,” Cortizo told me. “Chinese investment in Spain has doubled over the last year alone.”

According to ICEX Spain Trade and Investment, the Spanish government’s trade and investment agency, Chinese investment in Spain is rising sharply, especially through new battery gigafactories and car plants.

Cortizo believes Spain could now become Beijing’s preferred European destination for investment, especially since Hungary is no longer led by pro-China Viktor Orban, under whom it was described as “China’s gateway into Europe”.

“US investment is sinking and Chinese investment [is] rising in relevance here,” Cortizo told me.

The US is still Spain’s biggest single foreign investor, but net investment fell by about €1bn, according to Spain’s Economy Ministry.

Spanish public opinion is now much more positive towards China than towards the US, its traditional ally.

A Pew Research Center poll published this summer found that 54% of Spaniards had a favourable view of China, compared with 30% who viewed the US favourably.

Cortizo said China makes trade easier, while the US — through Trump’s tariffs and the effects of the war in Iran — has made it much harder. Meanwhile, Spaniards have watched the US president threaten their prime minister with economic sanctions if he does not accept Donald Trump’s demands to raise defence spending to 5% of GDP or allow US bases in Spain to be used in attacks on Iran.

For many in Spain, that is why China is seen as more dependable than the US.

And when major Chinese carmaker Chery Automobile chose Spain two years ago for its first European manufacturing and operations hub, it revived the then-defunct Spanish brand Ebro.

“Chinese companies are investing in car manufacturing in Spain, filling the gaps we had,” Cortizo says.

But critics fear Chinese factories on Spanish soil could weaken the EU single market.

Chery is not the only Chinese company in Barcelona. Battery and stationary-energy-storage firm Hithium plans to invest in Navarra in northern Spain, while battery maker CATL is involved in building a lithium iron phosphate battery gigafactory in Zaragoza, 200 miles west of Barcelona. Critics say these projects are part of Chinese firms’ efforts to localise production inside the EU and avoid tariffs on imports of Chinese electric vehicles.

Miguel Otero, a China specialist at Madrid’s ElCano Royal Institute, says Spain’s European allies are being condescending and hypocritical.

“France, Italy, Germany, they all have their own strategic relationship with China,” he tells me. “Spain isn’t going much further. It’s been catching up with them.” He says that now Europe can no longer rely fully on the US, Spain’s priority is diversification. It wants to do business not only with China but also with Canada, Brazil, India and Africa. Spain, he says, is not obsessed with China.

But security is also part of the picture.

On his latest trip to Beijing in April, Prime Minister Sanchez met the founder of Chinese wind turbine maker Ming Yang, which had just seen its plans to open the UK’s largest wind turbine manufacturing plant in the Highlands blocked on national security grounds.

That came after uproar in the EU when Spain’s Ministry of the Interior awarded Chinese tech giant Huawei a €12.3m contract last year to store and manage sensitive judicial wiretap data.

MEPs from several political groups in the European Parliament said Spain’s contract could put the EU as a whole at risk.

“When you introduce a high-risk vendor... we do not just risk a localised data breach, we risk poisoning the well of European intelligence sharing,” said Markéta Gregorová, a Czech Pirate Party MEP in the Greens group, back in February.

Juan Ignacio Zoido Álvarez, from Spain’s centre-right opposition, said the decision puts “the entirety of the EU at risk”.

Spain’s defence ministry continues to deny any danger, but Julianne Smith, former US ambassador to Nato and co-founder of geostrategic advisory firm Clarion Strategies, warns the episode could seriously weaken European cohesion.

“As EU countries seek ways to hedge against what some see as an unpredictable and unreliable America, they have to be careful not to rush towards alternatives that stand to weaken the EU’s collective hand,” she tells me.

“Some of those growing relationships, such as Canada’s rapidly expanding relationship with the EU, could produce real dividends,” she added. “But others, such as Spain’s decision to deepen its relationship with China, could further derail the EU’s ability to speak with one voice and create added security vulnerabilities for both Spain and wider Europe.”

Spain is far from the only EU country forming controversial partnerships.

Finland has a 1,300km-long land border with Russia, leaving it feeling vulnerable since Moscow’s full-scale invasion of Ukraine.

Finland already has the EU’s highest rate of civilian firearm ownership per capita. It also has the largest reserve military force in both the EU and Nato. It has built cavities under bridges that can be filled with explosives if Russian armoured vehicles cross into its territory. This is a country that sees military readiness as an existential necessity.

In 2022, it decided there was safety in numbers. Helsinki abandoned its traditional strategic neutrality and hurried to join Nato.

Now, however, there are fears that Washington may not honour the alliance’s mutual defence clause if a member state is attacked.

No longer confident that the US would come to its aid if needed, Finland has turned to Israel to buy advanced defence equipment, including the David’s Sling air-defence system and Spike anti-tank missiles.

Finland renewed its contract with Israel at the height of the recent Gaza war, despite its government having publicly voiced substantial reservations about Israeli activity in the occupied Palestinian territories and despite the fact that many other EU countries also feel deep unease about Israel’s policies and actions in Gaza and the West Bank.

“There is a sense in Finland that we can’t always afford [to have] a moral superiority. Survival comes at a price,” says Minna Alander, a fellow with the Transatlantic Defence and Security Programme at the Center for European Policy Analysis (CEPA).

“Finns and political opposition parties do question whether Israel is a country whose defence industry they want to support [because of its actions in Gaza and the West Bank] but the Finnish government has kept out of the debate, saying the deal with Israel fulfils Finland’s needs,” she tells me.

In the end, Alander says, her fellow Finns have “a less sentimental mentality”.

Greece also feels threatened by a much larger and immediate neighbour. Nick Malkoutzis, co-founder of the political analysis website MacroPolis, tells me that Greece sees Turkey as a “constant and significant danger to its national security and sovereignty”.

In the past, the US mediated disputes between the two countries. Both are Nato members. But under Donald Trump, Nato insiders say the US is increasingly seen as politically and diplomatically absent, with Washington focused elsewhere.

In late August, Greece and Israel signed one of the biggest defence export deals in both countries’ histories. The “Achilles Shield” agreement gives Athens Israeli technology designed to protect Greece against a range of threats, including drones, aircraft and missiles.

There has long been public sympathy in Greece for the Palestinian cause, and many people have been sceptical about ever closer ties with Israel. But Malkoutzis says the public and political response to the “mega-deal” with Israel has been “more muted than might have been expected”.

He says that is because there is a bottom line: a shared understanding of Greece’s fundamental need to strengthen its security against Turkey, which takes precedence over everything else.

With Israel a close ally of Washington, Greece hopes that “buying Israeli” will also help preserve decent relations with the US, even in these turbulent times.

But it is a delicate balancing act, because Greece and Finland both want very much to be seen as “good Europeans”, contributing to the European collective, according to Malkoutzis.

He says EU countries “scrambling in all directions” makes it harder for everyone to get on the same page and speak with one voice on defence and security, which is the opposite of what Brussels and Nato say they want.

That said, European countries grouping together in smaller blocs to pursue shared interests is nothing new. The E3 “gang”, made up of the UK, Germany and France, was created in 2003 to coordinate diplomatic talks with Iran in the hope of reaching a nuclear deal. It is now a more ad hoc channel of communication for Europe’s three biggest military and economic powers.

Nordic and Arctic countries have their own arrangements for regional defence cooperation, while the “Visegrad Four” — Czechia, Hungary, Poland and Slovakia — was for many years a familiar pressure group in EU circles.

Still, Nato and the EU believe the continent is under intense pressure unlike anything seen since the end of the Second World War. Their leaders say a united front is needed. A hostile Russia is growling at the door, backed by Beijing, while the United States, Europe’s former best friend abroad, seems at best distracted by other priorities.

They believe fragmentation, splintering and rampant “mini-lateralism” will only delight Europe’s adversaries. China and Russia are watching closely.