EU–China political relations, opportunities and challenges

Analysis 30 June 2022
EU–China political relations, opportunities and challenges

How can a constructive and forward-looking dialogue between the European and Chinese participants, based on open and mutually respectful exchanges of views, be encouraged and sustained?

The EU and China have been in a comprehensive strategic partnership since 2003, when not only the two parties but also the world in general were very different from what they are now. Of course, both sides have updated and recast their strategic approaches regularly since then. However, the pace and scale of change – especially in China but also in the EU and, more recently, globally – necessitate that the relations at the strategic level should be constantly analysed and discussed to optimise mutual understanding, avoid miscalculations and build mutual trust.
Since 2003, China’s unprecedented advances and dramatically increased global presence have been abundantly clear and are seen as matters of pride domestically. For example, China lifted hundreds of millions of its citizens out of poverty, made effective use of its crucial accession to the World Trade Organization (WTO), recorded sustained extraordinary annual growth rates, successfully hosted the 2008 Olympic Games, plays a significant and growing role in the UN, is a major contributor of personnel to Blue Beret missions under the UN Security Council, is an important investor abroad, and develops major global initiatives (e.g. Belt and Road Initiative). On some metrics, China was the largest economy in the world two centuries ago. Once again, on other metrics, China is on course to regain that position in the near future.
The EU has also changed enormously since 2003. It has enlarged substantially with the accession of 13 states, developed and concretised the European and Monetary Union, survived the 2008 global financial crisis and established the Banking Union, modernised its institutions and working methods and enhanced its foreign policy powers (i.e. 2009 Lisbon Treaty), become an increasingly important player in international and multilateral affairs, and forged a common view and leading role to meet the challenges of climate change. The EU’s recent joint actions on meeting the unprecedented challenges of COVID-19 and the ambitious and forward-looking agenda on the green and digital transformations are further examples of its dynamism and ability to move with the times. 
The EU, it should be recalled, is a unique experiment in international affairs – a democratic and law-based collectivity that pools sovereignty among 27 sovereign states. A number of neighbouring states wish to join, notwithstanding the recent departure of the UK.
Key issues
The EU and China, by virtue of their roles as global actors of the first importance with deeply enmeshed economic and trade ties, must find a way to manage and advance their complex and multifaceted relationship against an increasingly complex geopolitical situation.
This complex situation is marked by declining support for multilateralism and growing scepticism about the multilateral, rules-based order, which remains at the heart of the EU’s foreign policy. The two sides should discuss what is meant by a ‘multilateral, rules-based order’, if only to ensure a common understanding of what this concept means and entails.
The emerging global geopolitical context presents increasing challenges to the EU’s values and interests. Multilateralism, as based on the principles of the UN Charter and international law, and the universality of human rights and fundamental freedoms are core principles of EU treaties that guide the EU’s actions. Multilateralism must be revitalised and strengthened.
To this end, the two sides should work towards a common understanding of what is meant by multilateralism, which in the EU’s view is both a condition for and a corollary of globalisation. That said, the risks of a power-based multipolar approach to the world are growing, as the post-World War II multilateral order shows its age. COVID-19 is an accelerator of these geopolitical trends.
European populations and parliaments are looking critically at international health issues, climate issues, trade policy and its implications, and vulnerabilities in the EU’s supply chains. The EU pledges to defend its values and interests vigorously, which is reflected clearly in its geopolitical approach. All these aspects have implications for the EU–China relationship.
The EU’s approach to China is autonomous and constructive in that it looks for mutually advantageous outcomes and draws on all facets of its activities.
However, the EU also clearly perceives that the balance of challenges and opportunities within their relationship has changed and that it should seek to correct and level the playing field and adopt a more reciprocal and balanced approach to its very important relationship with China. The practical expression of this approach was set out clearly in its 2019 Strategic Outlook:
“China is, simultaneously, in different policy areas, a cooperation partner with whom the EU has closely aligned objectives, a negotiating partner with whom the EU needs to find a balance of interests, an economic competitor in the pursuit of technological leadership, and a systemic rival promoting alternative models of governance. This requires a flexible and pragmatic whole-of-EU approach enabling a principled defence of interests and values.”
This important EU document of 2019 illustrates the EU’s multifaceted approach, which fits the extensive range of policy areas in the EU–China relationship. It is not an ‘all or nothing’ approach – still less, a negative one – and the 10 key ambitious actions proposed by the European Commission and European External Action Service in follow-up to the Strategic Outlook span the full scale of this multifaceted approach to varying degrees.
The EU still needs to define and explain what is meant by strategic autonomy more fully, particularly in light of possible misapprehensions about its interrelationships with China and the US, and diverging conceptions within the Union. By definition, the EU is autonomous since all of its decisions and policies ultimately track back to the EU treaties, primary and secondary EU law, and the member states. The autonomy of the EU is not an instrument aimed at any particular third country or countries. 
The EU’s commitment is to multilateral solutions. However, difficulties and blockages, particularly in the multilateral trading system and WTO deficiencies, have underlined the reality that the EU must act in its own right – multilaterally where possible, and autonomously when necessary – to defend its interests. A clear example of the EU’s new expression of autonomy is the ‘anti-coercion instrument’ prepared by the European Commission, which will allow the EU to defend its interests when the multilateral avenue to resolution is blocked.
The EU’s 2019 approach should be viewed as a constructive platform for building practical and mutually beneficial outcomes, especially on global partnership issues, and enhancing mutual trust and understanding between the EU and China. Discussion on global issues should, in the view of the EU, include all global issues, including those where there are some profound differences (e.g. human rights and universal values). Some areas for immediate follow-up discussion are outlined below.
- Cooperative partnership across the UN: China is an increasingly important UN player and, of all the permanent members of the Security Council, is the largest contributor to Blue Beret operations. EU–China engagement on peace, global and regional security issues and development cooperation should be enhanced. Cooperation on Africa and other regional hotspots would emphasise the partnership and reflect China’s role as a permanent member. WTO reform is another obvious area for intensified EU–China discussions.
- Climate change, the environment and biodiversity: The EU and China are global leaders in these areas. President Xi’s commitment to peak emissions by 2030 and achieve carbon neutrality by 2060 should be considered. The climate, Green Deal, digital transition and pandemic are all central priorities of the EU and drivers of its new growth strategy.
- Global health issues: Especially in light of the pandemic, and with a particular aim to enhance trust between the EU and China.
- Industrial and technical standards: Cyber questions should also be discussed. European, Chinese and American regulators are noticeably taking an increasing interest in the activities of big tech companies. The two sides could discuss this aspect. The scope for cooperation on financial matters should be explored, particularly in light of Brexit. 
- Trade: Issues and questions regarding the level playing field, market access and trade disruptions will require particular and clear-eyed attention.
- Human rights and universal values: Where at times radically different systemic perspectives apply, questions on these issues should be addressed in a sustained and forward-looking manner. This should go beyond the EU–China Human Rights Dialogue. Also, thought needs to be given as to how to manage some disagreements before and indeed when they become public.
Main challenges and opportunities
Leaving aside for one moment the substantial policy challenges, the particular challenges in developing mutual understanding (i.e. the current pandemic-driven constraints on face-to-face and people-to-people interactions) must also be considered. The current social norms not only work against the human chemistry in actual meetings between official and parliamentary delegations but also run the risk of reducing virtual interactions to serial statements of position. 
It is to be hoped that the exchanges between think tanks, such as the EU & China Think-Tank Exchanges project, will facilitate and encourage textured, inclusive and freeflowing discussions, despite the current disagreements between the EU and China involving sanctions and countersanctions and the consequent serious difficulties in approving the Comprehensive Agreement on Investment. A further challenge is the oft-misunderstood relationship between the EU and the US. 
The transatlantic relationship is deep and enduring, and the US (with the exception of the Trump years) is a strong supporter of the EU and European integration. In parallel, the EU is, of course, an autonomous entity that makes its own decisions. There is no conflict between a healthy and balanced transatlantic relationship and the development of a mutually beneficial relationship between the EU and China. Moreover, the US–China relationship predates and is more established and deeply textured than the EU–China one in terms of politics, economics, education, and cultural and people-to-people interactions. 
The various relationships between the EU, China and the US should not be seen as alternatives or zero-sum games. It is also important to correct any misplaced concerns that the EU is somehow seeking to contain or encircle China or sabotage its development model. 
The Online Expert Roundtable should directly discuss China’s centennial goals and how it reached the goals set out some years ago for a moderately prosperous society by 2021. In addition, new guiding principles have emerged in China, which the EU should seek to understand, as well as their implications for Chinese domestic and foreign policy.
The discussions could also touch on the implications of the new ‘principal contradiction’, which was approved at the 19th National Party Congress in 2017. It seems to focus particularly on health, environment and social inclusion, and the quality rather than quantity of growth. Potential synergies between the EU’s approach and such principles should be explored.
There are clear and immediate opportunities for developing the EU–China relationship on global issues like climate change, biodiversity, the response to COVID-19 and WTO reform. Actual government-togovernment meetings and people-to-people exchanges would be of substantial help once health restrictions lift.
Recommendations and conclusions
The EU–China relationship has many constituent policy areas and should be developed across all of them. This is especially the case for trade and investment, connectivity and people-to-people exchanges, foreign and security policy (i.e. peacekeeping, denuclearisation), and global governance and human rights issues.
The EU should always base its approach on clearly defined interests and principles and deepen its effective
and coherent engagement with China. Some of these policy areas are much more complex than others, and it will be for both sides to find ways forward together, including on those issues where conflicting values are most pronounced.
Author: Declan Kelleher, Senior Adviser at European Policy Centre