China-EU Relations and Prospects

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					                China-EU Relations and Prospects
                                                                      Mr. Zhang Linchu,
                                                                 Senior Research Fellow
                                       China Institute for International Strategic Studies




      China and Europe have enjoyed diplomatic relations for over thirty
years. Especially in recent years, as the world strategic order and the
international situation have been changing, and as China and the EU have
further increased their integrated power and international status, they
cooperated at many diversified levels. Currently, China and EU relations
are characterised by mutual political trust, and business and cultural.
Relations have and matured. The features are as follows:
   1. Mechanism of political cooperation and strategic dialogue
working smoothly.
   In recent years, Chinese leaders have visited several EU members and
EU headquarters. The President of the European Commission, Senior
Commissioners for EU Common Foreign and Security Policy, as well as
the leaders of member countries, have visited China. In September 2006,
the Ninth China-EU Summit was held and the Joint Declaration released.
Finnish Prime minister, Mr. Vanhanen and President of the European
Commission Mr. Barroso pointed out that “China’s development is a
great opportunity for Europe; China’s development will boost the world
economy. China brings great opportunities as well as great development
potential to the world”. To reflect the complete depth and breadth of
their current comprehensive strategic partnerships, China and the EU
have agreed to start negotiating a China-EU Partnership Framework
Agreement. The new agreement will cover most fields, including political
cooperation. Furthermore, Chinese and EU leaders and members are
actively developing their bilateral or multilateral diplomatic relations in
various international fora such as the UN and G8. For the moment, China
and the EU have established a series of smooth exchange channels.
Besides the annual China-EU Summit, there are thirteen channels of
dialogue mechanisms, including a strategic and a human rights dialogue
mechanism. These channels help to improve mutual understanding,

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reduce misunderstandings and differences and further increase their
mutual respect and trust, greatly enhancing strategic intercommunication
on important international affairs and regional hot-spot issues.
   2. The mutual beneficial economic and trade cooperation is leading
to fruitful results which greatly enhances China-EU relations.
   Economic and trade relations constitute the indispensable basis to
enhance China-EU Comprehensive Strategic Partnerships, and the two
sides regard it one of their top development priorities. Since the 1980s,
trade volume between China and Europe has continued to increase.
According to the statistics released by the Chinese Customs, in 2005 trade
volume between China and EU reached a record high of $217.3bln, an
increase of 22.6 percent over 2004, representing 15 percent of China’s
trade, up ninety-fold since the opening of diplomatic relations. In the first
half of 2006, trade volume between China and the EU exceeded $120bln,
an increase of 20.8 percent over the same period of the previous year. At
present, the EU is China’s largest trading partner, and China the EU’s
second largest. Although the anti-dumping cases launched by the EU
account for one third of China’s total, and while this seems to be
increasing the friction, the mutual benefit and win-win direction is still
the mainstream of China-EU relations.

   3. The strategically deepened scientific and technological
cooperation of the China-EU relations.
   China and the EU have built a cooperation mode focused on scientific
dialogue and technological exchanges under the “Hand in Hand strategy”.
The two sides have cooperated in over forty fields, including the Galileo
Project, IT, energy, new materials, biotech, aviation and aerospace and
hydrogen energy economy, to name but a few, to take their cooperation
into a phase of substantial achievement. China has participated in four
percent of the EU’s sci-tech projects within EU frameworks. And China
has opened its “973 National Basic Research Programme” and “863
High-tech Industrial Research Plan” to the EU. By the end of 2005, China
had introduced 21,511 techniques from the EU, with a contracted value of
$90bln. The EU has set up over 22,360 companies in China, with the


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contracted investment value of $86.1bln and a finalised investment of
$47.2bln. The EU is the largest technical exporter and the fourth largest
investor in China. In the first half of 2006, China imported technology
worth $4.6bln from the EU, accounting for 42 % of the total. exceeding
the U.S. and Japan. In October 2006, the “China-EU sci-tech Year” was
introduced. Activities such as theme exhibitions, High-level Fora and
Expert Seminars will be held between China and EU members.
   4. Security and defence cooperation carried out successfully, which
helps to increase trust and eliminate doubts.
   In the last few years, interdependence between China and the EU on
security and defence issues has increased. The two sides are intensifying
their dialogue and consultations. In the international security field,
China and the EU play their dominant roles and share much common
ground on UN issues, Iraq’s post- war reconstruction, the Middle East
peace process etc. The two sides strongly support each other on playing
active roles in security issues, such as the Korean and Iranian nuclear
questions. In the non-traditional security field, the two sides are
committed to fighting against global security challenges such as terrorism,
nuclear proliferation, transnational crimes etc. China has deepened
cooperation in the fields of counter-terrorism intelligence exchanges,
personnel training and legal support with important EU members such as
the UK, France and Germany, and the parties concerned have agreed to
take joint police action on fighting terrorism and organised transnational
crime. China has established regular consultation mechanisms with the
UK and Germany respectively, to agree to strengthen their cooperation on
such questions as how to define terrorists. In the bilateral security
defence field, China has held several rounds of high-level defence
security consultation meetings with France, Germany and the UK
respectively. Military leaders have visited each other and exchanges of
professional teams and military students have been frequent. The mutual
trust and dynamic exchanges between China and the EU brings vigour to
their bilateral relations.

  Looking to the future, China and the EU’s comprehensive strategic


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partnerships can extend to wider and deeper fields of cooperation and will
mature to historic heights. The reasons are as follows:
   1. China and the EU have no radical conflicts of interest and no
pending historical issues. They share much common ground, such as
calling for multilateralism, international relations democratisation, the
strengthening of the UN, environment protection, fighting against
international terrorism and poverty elimination, maintaining sustainable
development and diversification of civilisations, and keeping an orderly
international economic environment. This common ground is the main
basis of the two sides’ strategic relations. Therefore, the political relations
between China and the EU will continuously be enhanced and steadily
developed. Their strategic dialogues and dynamic mechanisms will be
perfected and consolidated.
   2. China and the EU are at a crucial moment of development; their
cooperation favours both sides. As the most advanced sovereign union in
the world, the EU possesses advantages in finance, technology,
management, and research and methodology in social economic
development and environment protection etc. China, with its continuous
growth and opening, possesses a huge market and abundant labour and is
carrying out a peaceful development strategy. These factors bring new
opportunity and will further upgrade the cooperation level for both sides.
Thus, economic, trade and sci-tech cooperation will continue to develop
strongly, and bilateral trade levels will reach a new record high.
   3. China and the EU have a very different historical and cultural
background. They can get along well, because apart from the political
basis and common interests, they trust and respect each other. The
security defence exchanges and cooperation will be developed gradually
and a breakthrough might take place in the field of substantial military
cooperation. Solving disputes on the basis of equality and mutual respect
is also a guaranty for smoother and healthier China-EU relations.
   China and EU relations also face some challenges. Externally, the U.S.
factor restricts to the China-EU comprehensive strategic partnership.
China and the EU’s “strategic approach” helps to resist U.S. hegemonism
and unilateralism. To avoid its global politics and diplomatic impact


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being contained and weakened, the U.S. is increasing its dialogue and
coordination with the EU on its policies towards China. The US is
attempting to break up the EU, with its internal contradictions. The EU’s
insufficient strength, and dependency on the U.S. security and economy,
entails adjusting and improving relations with the U.S. Therefore,
China-EU relations are constrained. It is still too early to say whether the
EU will remove the obstacle of the weapons embargo against China,
which restricts military cooperation. Moreover, the EU does not yet
acknowledge China’s Market Economy Status (MES). The potential
factors to bring new trade disputes still exist. The European Parliament,
and some individual countries, frequently exert pressure on China by
using the Tibetan and Taiwan issues. These negative factors are just bush
fires for China-EU relations. If only these obstacles were removed, the
comprehensive strategic partnership between China and the EU would be
steadily developed.




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