Bridging Continents: The Evolving Landscape of EU-China Relations

In the 16th century, European exploration and expansion brought traders and Christian missionaries to China. The Portuguese established a foothold in Macau in 1557, paving the way for other European powers such as the Dutch, British, and French. These early interactions were primarily driven by a European thirst for Chinese goods like tea, silk, and porcelain. The Chinese imperial court, especially under the Qing Dynasty, maintained a policy of limited engagement, allowing European presence but strictly controlling trade.

Post-World War II, the formation of the People’s Republic of China (PRC) in 1949 under Mao Zedong introduced a communist regime, which led to cautious and often strained relations with Western European countries. In the ensuing decades, particularly in the 1960s and early 1970s, several European nations began recognizing and establishing diplomatic relations with the PRC despite initial reluctance. They continued official ties with the Republic of China (Taiwan). The ideological divide of the Cold War further complicated these relationships. While communist and neutral European countries were more receptive to the PRC, Western European states aligned with the US approached with caution.

Born in the enchanting city of Venice in 1254, Marco Polo emerged as an iconic explorer. His epic journey to the mystic lands of Asia began in 1271 when he was just seventeen. Embarking on this adventure alongside his father Niccolò and Uncle Maffeo, Marco Polo entered a world of cross-cultural wonders, marking a pivotal chapter in medieval exploration.

The origins of EU-China relations can be traced back to 1975, marking the inception of diplomatic ties between the European Commission and the People’s Republic of China (PRC). This formal engagement followed several pivotal events: China’s admission to the United Nations in 1971, U.S. President Nixon’s historic visit to China in 1972, and a seminal encounter in 1973 when a European Commissioner first visited China. During the Cold War, aligning with China, a socialist nation that was nonetheless antagonistic towards the Soviet Union, was a strategic facet of both the U.S. and broader Western policy to undermine the USSR’s influence. Until 1988, China remained the sole socialist state to establish diplomatic relations with the European Communities (EC).

The PRC experienced a period of intense domestic upheaval from 1966 to 1976, known as the Cultural Revolution, resulting in near-total diplomatic isolation. Before its admission to the United Nations in October 1971, replacing Taiwan, only a handful of Western European states had established formal ties with the PRC: the United Kingdom, Sweden, Denmark, Finland (since 1950), France (since 1964), Italy (since 1970), and Austria (since 1971). Only France and Italy were European Community members then; Austria, Finland, and Sweden were neutral countries and did not belong to the Western bloc. Notably, China declined to exchange ambassadors with the United Kingdom and the Netherlands (with whom it had diplomatic relations since 1954) until 1972.

The geopolitical landscape of the Cold War underwent a significant transformation with US President Nixon’s visit to China in 1972. This event marked a strategic alignment between the US and China. This shift prompted Western European states and, subsequently, the European Community to formalize diplomatic ties with China in 1975. Initially, the EC’s scope was limited to trade and economic cooperation, not foreign policy. The commercial exchange between China and Europe was minimal originally, but a trade agreement in 1978, the first of its kind with a socialist state, laid the foundation for future interactions.

In 1978, the European Union and China signed their inaugural trade agreement, marking the onset of formal bilateral relations. Ratified on 3 April 1978 and effective from 1 June of the same year, this agreement was crafted to bolster and diversify trade on reciprocity and mutual benefit tenets. Both entities extended each other the most favoured nation treatment concerning trade, customs, levies, and additional domestic charges. A Joint Committee was constituted to ensure the accord’s efficacy and address trade-related queries.

Without a doubt, the onset of EU-China relations in the late 1970s was accelerated by the political openings in China led by Deng Xiaoping. Deng’s “Reform and Opening Up” policies signalled a shift from the more insular policies of the past, moving China towards integration with the global economy. They were introduced to transform China’s command economy, which was based on central planning and state ownership, into a more market-oriented economy while maintaining the dominance of the Communist Party. The reforms aimed to increase productivity, stimulate economic growth, and improve the living standards of the Chinese population.

Key Features of Deng Xiaoping’s “Reform and Opening Up” policies are: Decentralization of economic planning; Special Economic Zones (SEZs); significantly reduced poverty; Agricultural reforms; State-Owned Enterprise (SOE) reforms; opening to foreign trade and investment; modernization efforts; legal and institutional reforms and preservation of One-Party Rule.

The optimistic anticipation for political liberalization in China during the 1980s was abruptly halted by the Tiananmen Square crackdown on June 4, 1989. This event contrasted with the peaceful dissolution of the Berlin Wall that occurred mere months later, creating a dichotomy that left a lasting impression on Western consciousness. In response to the crackdown, the EU implemented restrictive measures, including an arms embargo and a reduction in development assistance, catapulting human rights issues to the forefront of EU-China relations.

The 1995 EU policy paper laid the groundwork for significant developments, highlighting critical topics like trade, economic cooperation, political dialogue, and human rights. The paper emphasized the mutual interests of both entities, recognizing China’s economic growth but also pointing out the fragility of its reform process. The EU identified a stable, prosperous, and open China as a strategic priority. The communication underscored the importance of supporting China’s reform process while maintaining a keen eye on its human rights situation. It also introduced the idea that European trade and investment could lead to a more open and democratic China.

China’s journey towards joining the WTO had the EU’s unwavering support. China’s accession to the World Trade Organization in 2001 culminated in a lengthy and complex negotiation process that began in 1986 when China first applied to join the WTO’s predecessor, the General Agreement on Tariffs and Trade. China and the EU reached a bilateral agreement in May 2000, one of the final steps for China’s accession to the WTO. The EU officially supported China’s WTO membership, recognizing the importance of integrating China into the global economy and the benefits of doing so under a rules-based system.

The transfer of Hong Kong from the United Kingdom to China in 1997 and Macau from Portugal to China in 1999 marked significant moments in China’s modern history. These events were symbolic for China, representing the recovery of its full sovereignty over all its territories and a turning point in its national narrative

China's accession to the WTO marked a turning point in global trade, and it had far-reaching implications for international economic relations, particularly between China and the EU. The EU's engagement with China during the WTO negotiations was part of a broader strategy to encourage China to adopt international norms and practices in trade and economic policy.

A subsequent 2001 paper, just before China acceded to the WTO, mainly reaffirmed earlier positions, refining the partnership's mechanics and emphasizing the importance of tangible outcomes. The document outlines a framework for a multifaceted collaboration with China. It focuses on five strategic objectives: increasing China's global engagement, fostering its development into an open society, enhancing its integration into the global economy, optimizing Europe's existing resources, and amplifying the EU's presence in China. 

The novelty of 2003 EU Policy Paper lies in several vital aspects that marked a significant advancement in the approach and understanding of EU-China relations at the time of its publication:

1. Updated Strategic Perspective

2. Comprehensive Framework for Cooperation

3. Emphasis on Human Rights and Rule of Law

4. Recognition of Challenges and Global Issues

5. Enhanced Mechanisms for Engagement

The EU-China Summit 2003 was the fourth summit meeting between the European Union and China in Brussels on September 30-October 1, 2003. The event was hosted by Italian Prime Minister Silvio Berlusconi, who held the rotating presidency of the European Council, and attended by Chinese Premier Wen Jiabao, European Commission President Romano Prodi, and EU High Representative for the Common Foreign and Security Policy Javier Solana. Relations between the EU and China encountered significant strain following the public upheaval in Tibet in March 2008. The 2008 EU-China summit did not occur as scheduled. China cancelled it in response to French President Sarkozy’s plans to meet with the Dalai Lama, illustrating China’s weight on the conditions it had set forth. This act of postponement revealed the seriousness with which China regarded its stipulated ‘red lines’ and underscored the divergent approaches between the two powers concerning principles, identity, and values.

The high-level Dialogues between the European Union (EU) and China are a set of formal discussions that aim to enhance cooperation, address challenges, and manage differences in various strategic, economic, and societal areas.

The key high-level dialogues included:

High-Level Strategic Dialogue: Focuses on foreign policy and security matters.

High-Level Economic and Trade Dialogue: Addresses economic and trade issues, including market access and investment.

High-Level People-to-People Dialogue: Covers educational, cultural, and scientific cooperation.

High-Level Dialogue on Environment and Climate: Concentrates on environmental protection and climate change.

High-Level Dialogue on Digital Cooperation: Discusses the digital economy, cybersecurity, and related technological cooperation.

High-Level Dialogue on Mobility and Migration: Deals with visa policies, asylum, and migration issues.

The EU-China 2020 Strategic Agenda for Cooperation is a joint document adopted by the EU and China at the 16th China-EU Summit in November 2013. It sets goals and priorities for their bilateral, regional and global cooperation until 2020. The document covers four main areas: peace and security, prosperity, sustainable development and people-to-people exchanges. It aims to deepen and broaden the EU-China Comprehensive Strategic Partnership, established in 2003, and promote peace, prosperity and sustainable development for the benefit of both sides and the world. 

China issued a policy paper on the European Union on April 2, 2014, following President Xi Jinping’s visit to Europe in March of the same year. The policy paper outlined China’s vision and proposals for deepening the comprehensive strategic partnership with the EU based on mutual respect, equality, mutual benefit, and win-win cooperation. The policy paper was a positive signal of China’s renewed emphasis on EU relations and its desire to upgrade bilateral cooperation to a new level.

Significant points of the “Elements for a New EU Strategy on China” document include the following:

1. Strengthening EU-China relations, engage in China’s reform process, and promote mutual benefits in various sectors.

2. Emphasizing reciprocity, a level playing field, and fair competition in all areas of cooperation.

3. Pushing for completing a Comprehensive Agreement on Investment and exploring new market opportunities.

4. Advancing infrastructure, trade, and digital connectivity between Europe and China.

5. Promoting global public goods, sustainable development, and international security.

6. Encouraging respect for the rule of law and human rights within China and internationally.

7. Maximizing EU cohesion and effectiveness in dealings with China.

The EU’s strategic shift was accompanied by a 10-point action plan to balance the economic ties with China. This plan responded to various concerns, including the slow pace of China’s economic opening, the surge of Chinese takeovers in critical EU sectors, and the challenges posed by state-subsidized Chinese companies and takeovers.

Essential elements of this action plan included:

• Curbing the influence of Chinese state-owned enterprises in the EU and mitigating cybersecurity threats.

• Promoting a more reciprocal economic relationship with steps to protect EU industries.

• Pushing for reforms in World Trade Organization rules, particularly regarding subsidies and forced technology transfers.

• Aiming to conclude a deal with China on investment rules by 2020.

• Reviving the International Procurement Instrument that would require foreign countries to open their public tenders in return for European access

The Belt and Road Initiative (BRI), inaugurated by China in 2013, is an expansive global development strategy encompassing infrastructure development and investment in numerous countries across Asia, Europe, Africa, and beyond. This ambitious program has significantly influenced EU-China relations, affecting many aspects of interaction.