Last year, China and the European Union (EU) celebrated forty years of diplomatic relations. The EU’s leading foreign policy official, Federica Mogherini, visited Beijing for the first time and advocated greater EU engagement in Asia. Meanwhile, Chinese President Xi Jinping traveled to the UK and also hosted state visits to China by German and French leaders. Much of this diplomatic activity focused on upgrading cooperation between China and Europe on investment and trade as a way to deepen their strategic partnership.

In an event hosted by the Carnegie–Tsinghua Center for Global Policy, panelists discussed the opportunities for, and obstacles to, forging greater China-Europe strategic cooperation to address shared security and development challenges. They reflected on the ways that disparate interests on both sides encourage and constrain coordinated responses to shared policy concerns, such as stable economic growth and global governance challenges. This panel was the third in the Carnegie Global Dialogue Series 2016 and was co-sponsored by the China Institute of International Studies.

Discussion Highlights 

  • Granting China Market Economy Status: Panelists agreed that the most important issue on the China-EU economic agenda is whether the EU will grant China market economy status (MES). Some speakers asserted that doing so may help counter growing protectionist sentiments in Europe. But others maintained that the overriding issue affecting China-EU economic ties is whether Europe would continue to apply antidumping duties to Chinese goods after China has been granted MES. One panelist identified the MES debate as one of the EU’s last bargaining chips and suggested that Brussels should make China’s economic status conditional on greater European access to China’s domestic markets.
  • Competing Priorities and Differing Expectations: Panelists asserted that China and the EU are approaching their relationship in an overly reactive and asymmetric fashion in both economic and political terms. They mentioned that a major European concern is China’s lack of reciprocal openness to foreign investment, whereas China is eager to invest heavily in Europe and gain a greater foothold in European markets. Politically speaking, the European Union must account for its limited influence in Asia when forming foreign policy, while China foresees Europe playing an important role in the multipolar international system that Beijing envisions.
  • Eurasian Connectivity and Trade: Panelists noted that trade is the most important aspect of China-EU relations, although there are geopolitical undertones to China’s economic engagement with Europe and countries along overland Eurasian trade routes. China’s One Belt, One Road (OBOR) strategy of funding infrastructure projects throughout Eurasia is indicative of this geographical shift, whereby China is committed to strengthening economic ties with partners beyond the Asia-Pacific, according to speakers. They acknowledged that the EU could engage more proactively with China’s long-term OBOR investment plans. But they also observed that Xi Jinping’s assertive foreign policy approach already has prompted countries like the UK, France, and Germany to deepen economic interactions with China, as demonstrated by their decisions to join the Asian Infrastructure Investment Bank.
  • Europe as a Balancer: Speakers stated that a major foreign policy issue for Europe is how to navigate a middle ground between the policy preferences of China and the United States when differences between the two countries emerge. They pointed out that the United States remains Europe’s chief provider of security, while China is Europe’s largest trading partner. Panelists proposed that if the EU were to engage more substantially with Asia, it may be able to play a pivotal role by striking a balance between U.S. and Chinese interests in the region. One panelist highlighted the Paris climate change negotiations as a successful model of trilateral cooperative efforts, and suggested that China, the United States, and Europe should strive to approach other policy challenges with the same constructive mind-set.
  • Reconciling Interests and Values: Panelists asserted that China and Europe should base their diplomatic agenda more on shared interests as a counterweight to the normative dimensions of the relationship. Speakers remained mindful that Europe’s economic interests in deepening trade and investment ties with China do not always fully align with the EU’s normative stances toward China, which Beijing sometimes see as potentially disruptive to diplomatic relations. Panelists agreed that both parties would need to make concerted efforts to reconcile these various objectives.

Paul Haenle

Paul Haenle is the director of the Carnegie–Tsinghua Center for Global Policy based at Tsinghua University in Beijing. Haenle’s research focuses on Chinese foreign policy and U.S.-China relations.

Cui Hongjian 

Cui Hongjian is a senior research fellow and director of the Department of European Studies at the China Institute of International Studies (CIIS).  His current research interests include practical forms of China-EU cooperation and China-EU trade relations.

François Godement

François Godement, an expert on Chinese and East Asian strategic and international affairs, is a nonresident senior associate in the Asia Program at the Carnegie Endowment for International Peace. His current research focuses on trends and debates in China’s foreign policy and on Europe-China relations.

Jin Ling

Jin Ling is an associate research fellow at the Chinese Institute for International Studies (CIIS). Her current research interests include the study of EU integration, European foreign policy, and China-EU relations. 

Shi Zhiqin

Shi Zhiqin is a resident scholar at the Carnegie–Tsinghua Center for Global Policy, where he runs the China-EU Relations program and the China-NATO dialogue series.  Shi is also professor and chancellor of the School of Social Sciences and dean of the Department of International Relations at Tsinghua University.

Jan Techau

Jan Techau is the director of Carnegie Europe, the European center of the Carnegie Endowment for International Peace. Techau works on EU integration and foreign policy, transatlantic affairs, and German foreign and security policy.