Europe Seeks to Rebalance Its Ties with China Amid Challenges
Europe is facing a dilemma in its relations with China, a country that presents both opportunities and challenges for the continent. China is the EU’s second largest trading partner after the United States, and the EU is China’s largest trading partner. Both sides have a comprehensive strategic partnership that covers various fields of cooperation, such as trade, investment, climate change, energy, research and innovation1.
However, in recent years, EU-China relations have deteriorated due to a number of issues, such as human rights violations, economic coercion, trade barriers, and China’s stance on the war in Ukraine. The EU has adopted a more assertive approach towards China, recognizing it as not only a partner, but also an economic competitor and a systemic rival. The EU has become more vigilant about protecting its interests and dependencies to ensure a level playing field and a rules-based international order.
In this context, several European leaders have visited Beijing since China reopened its borders after its zero-Covid policy. They have tried to engage with China on global and regional challenges, such as climate change, pandemic response, and security. They have also sought to persuade China to use its influence on Russia to de-escalate the situation in Ukraine and respect its sovereignty and territorial integrity.
However, none of them has received a clear answer from Chinese President Xi Jinping, who has maintained a close friendship with Russian President Vladimir Putin. Xi has expressed his opposition to nuclear weapons and his support for EU’s mediation efforts, but he has not condemned Russia’s invasion of Ukraine or recognized its sovereignty and territorial integrity3. He has also promoted China’s alternative model of governance and development as superior to the Western one4.
The latest European leader to visit Beijing was French President Emmanuel Macron, who was accompanied by European Commission President Ursula von der Leyen for part of the talks. Macron hoped that China could be a “game-changer” in resolving the crisis in Ukraine, but he did not get any concrete commitment from Xi. Instead, he focused on strengthening bilateral cooperation on economic and environmental issues. He also discussed the trade and investment ties between the EU and China, which have become increasingly imbalanced in favor of China.
The visit showed the complexity and diversity of EU-China relations, as well as the need for a coherent and coordinated European strategy towards China. The EU has to balance its interests and values in dealing with China, while also cooperating with other partners such as the United States and India. The EU has to defend its principles and norms, while also engaging with China on common challenges. The EU has to compete with China economically, while also seeking opportunities for mutual benefit.
The EU-China trade relationship is one of the most important aspects of their bilateral ties. The total value of the goods trade between China and Europe hit €696 billion ($732 billion) last year, up by nearly a quarter from 2019. China was the third largest destination for EU goods exports, accounting for 10% of the total, according to Eurostat data. China is Europe’s biggest source of imports, accounting for 22% in 2021. The EU also exports services to China worth €46 billion in 2020 and receives services from China worth €30 billion.
The EU and China have been negotiating a Comprehensive Agreement on Investment (CAI) since 2013, aiming to improve market access and create a level playing field for investors on both sides. The negotiations were concluded in principle in December 2020, but the ratification process has been suspended since May 2021 due to political tensions over human rights issues. The EU has also expressed concerns over China’s unfair trade practices, such as subsidies, dumping, forced technology transfers, intellectual property rights violations, and market access barriers.
The EU-China trade relationship is not only important for their bilateral interests, but also for their role in the global economy. The EU and China are two of the three largest economies and traders in the world. They are also key players in multilateral fora such as the World Trade Organization (WTO), where they can cooperate or clash over trade rules and reforms. The EU and China have a shared interest in maintaining an open and rules-based global trading system that can foster sustainable growth and development.
In conclusion, Europe is trying to find a new way to deal with China, a country that presents both opportunities and challenges for the continent. Europe needs to adopt a strategic vision that can balance its interests and values in dealing with China while also cooperating with other partners on