China-eu Relations: Structural Changes and Future Prospects

The structural changes in the China-eu relations have taken place in the context of accelerating transformation in relative economic strength and in respective diplomatic approach. The bilateral relations will enter a period of readjustment with profound bilateral, regional and global impacts.

The European Union is the prevailing economic and political entity in Europe, and is the focal point of China’s Europe policy. After more than 40 years of cooperation, relations between China and the EU (and its predecessor the European Community) have reached a period of structural changes, which is a natural consequence of evolving international and regional situation. Structural changes refer to the variation in content and proportion of integral parts as a result of the interplay between internal and external conditions, which give rise to changes in relationship between the various parts, and lead to further transformation in the overall structure. There are various inherent factors propelling structural changes in China-eu relations, including a major change in relative economic strength of the two sides, changes in policy orientation and priorities of China and the EU, and Brexit. External factors include respective neighboring situations facing China and the EU, changes in international environment, and uncertainties ensuing government turnover in the United States. While examining the overall changes in China-eu relations, this article will analyze the background, characteristics and prospects of structural changes in China-eu relations by looking at relevant internal and external factors in terms of domestic politics, national strategy, economics and trade, perception, policy initiatives and the broader business environment.

Main Features of Structural Changes in China-eu Relations

Since 2013, due to China’s strengthened initiative and change in EU policy, the China-eu relations have entered a new period of vigorous development. The vision of building a partnership for peace, growth, reform and civilization was incorporated into the China-eu 2020 Strategic Agenda for Cooperation, symbolizing an unprecedented strategic high in bilateral relations. Compared with the phased changes in previous China-eu relations, structural changes have taken place since 2008. The structural changes in China-eu relations have demonstrated the following characteristics:

Great changes in mutual perceptions and policies, and more equal status in policy initiative and agenda setting

Mutual perceptions between China and the EU is an important part of bilateral relations, and a critical foundation for formulating policies. After setbacks in China-eu relations in 2008, mutual perceptions and policy interactions between the two sides experienced remarkable changes.

The EU’S perception of China and its policy changes have exhibited the following features. First, while attaching increased importance to the potential for cooperation with China, the EU feels uneasy about the rise of China. Dragged down by the crisis, the EU is concerned about its decline in competitiveness amid dim prospects of economic recovery, and is thus apprehensive about its values, system and model being challenged by emerging forces. For example, in spite of huge demand for cooperation, due to concerns about over-dependence on China’s economy and the consideration to stick to its own political values even in times of crises, there have been calls within the EU since 2009 for strictly executing the strategy of “conditional” or even “reciprocal” engagement. To this end, the EU has elevated China’s position among its strategic partnerships, and identified a “more liberal and fair access to the Chinese market” as the primary goal