This article studies the mechanics through which the EU’s relations with China may harm its values and institutions, providing specific examples that precisely illustrate the Chinese Communist Party’s malign influence in Europe. It also intends to reflect on the extent to which the two distinct political and economic models are compatible with the preservation of a liberal international order. Accordingly, we aim to assess whether the EU has the capacity to counteract China’s sharp power, highlighting concrete policy actions that help strengthen the EU’s position while also identifying persisting shortcomings. It is argued that the EU has considerable economic deterrence to push China into respecting global defined rules and arrangements. Indeed, recent reforms, such as the investment screening mechanism and the global sanctions regime, were an important step towards the affirmation of an EU committed to its values. However, the unanimity requirement in the Common Foreign and Security Policy’s decision-making will likely remain a relevant obstacle for a coherent and efficient EU’s external action.