Updated January 7, 2019
The European Union and China
Background
issues of global concern. In a world increasingly bound
The European Economic Community (EEC), the
together by the forces of globalization, the EU sees
predecessor to the European Union (EU), and China
cooperation with China, bilaterally or within multilateral
established diplomatic relations in 1975. The EU-China
structures, as crucial to achieve progress in any number of
relationship, which began as a framework of economic
issues of mutual importance to Brussels and Beijing.
cooperation, has evolved into a comprehensive political and
economic relationship. Today, the EU’s China policy
The EU’s relations with China, while predominantly
prioritizes reciprocity, a level playing field, and fair
economic in nature, are also designed to promote EU
competition in political and economic relations. It also
influence in other areas. The EU and China hold an annual
seeks to advance European values, such as the promotion of
Strategic Dialogue to discuss bilateral relations, with a
democracy, rule of law, human rights, economic and social
focus on foreign and security policy, at the level of the High
reform in China, and respect for the U.N. Charter’s
Representative/Vice President on the EU side and the State
principles, and to raise the EU’s profile in China
Councilor for Foreign Affairs on the Chinese side. This
political dialogue attempts to address critical global issues,
Since 1998, the EU and China have held annual summits,
such as such as human rights, the South China Sea, North
alternating between Brussels and Beijing. These summits
Korea, and China’s “One Belt, One Road” initiative.
affirm the EU’s long-term interest in, and maintenance of,
its political and economic relations with China.
The European Union and China at a Glance
EU: 28 member states
At the 16th summit, held in November 2013, the EU-China
Strategic 2020 Agenda for Cooperation was launched
Population: EU: 500 mil ion; China: 1.3 bil ion
(http://eeas.europa.eu/archives/docs/china/docs/
EU GDP (2016): approx. €14.0 tril ion
20131123_agenda_2020__en.pdf). The agenda established
China GDP (2015); approx. $11 tril ion
the framework intended to guide EU-China relations until
China is now the EU’s second-largest trading partner,
2020. The Strategic 2020 Agenda is being implemented
behind the United States. The EU is China’s largest
through three pillars of EU-China relations: a High-Level
trading partner.
Strategic Dialogue, a High-Level Economic and Trade
Dialogue, and a biannual People-to-People Dialogue
EU goods exports to China (2017): €198 bil ion
established in 2012.
EU goods imports from China (2017): €374 bil ion
EU services exports to China (2015): €37.3 bil ion
Today, according to the EU, the EU and China have over
EU services imports from China (2015): €26.4 bil ion
70 high-level and senior-level dialogues, working groups,
China’s investment in Europe is growing rapidly. EU
and steering committees reflecting the wide-ranging scope
foreign direct investment in China was approximately
of the relationship, including in areas such as cyber,
€6.8 bil ion in 2014, and China’s investment in the EU
transnational crime, economics, high-tech innovation,
reportedly was around €35 bil ion in 2016.
tourism, energy, and the environment. The EU and China
Sources: European Commission, Eurostat, Rhodium Group.
also have agreed to further develop exchanges on legal
Note: Exchange: €1 = $1.1
affairs and digital connectivity.
China’s Perspective
Through the people-to-people exchange, the EU and China
In June 2015 remarks to the China-EU Business Summit,
have committed to the continued development of
Chinese Premier Li Keqiang described the EU as “a major
sustainable tourism, which, according to both sides, is
pole on the global political arena” and declared that “no
booming. Some 600 flights run daily between European and
geopolitical conflicts or clash of fundamental interests”
Chinese cities. Approximately 6 million Chinese visitors
exist between the EU and China. Li credited the EU for
traveled to Europe in 2017.
offering “many advanced technologies to help China’s
modernization” and promised that China would continue to
Another aspect of the EU-China dialogue is designed to
support “a united European Union and a strong euro.”
promote intellectual exchanges between major cultural,
scientific, and educational institutions. As part of this
Political Dimension
dialogue, the China-Europe International Business School
According to EU leadership, the EU’s commitment to a
and the EU-China School of Law have, for years,
political dialogue with China reflects Europe’s recognition
successfully trained business and legal experts to promote
that China, as a growing economic and political power, and
exchanges between China and Europe. More than 200,000
an increasingly active member of the international
Chinese nationals are studying in Europe, and some 40,000
community, can exert significant influence on an array of
EU citizens are studying in China.
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The European Union and China
Economic Dimension
foothold in Europe by expanding its unfair trade practices
The EU and China are two of the biggest trading partners in
and investing in key industries, sensitive technologies, and
the world, with EU-China trade increasing dramatically in
infrastructure.”
recent years. China and Europe now trade an average of
well over €1 billion each day. Bilateral trade represents
At the same time, a security dimension has raised concerns
approximately 3.3% of the EU’s GDP and close to 6% of
within the EU. As China has begun to pursue a more global
China’s GDP, underlining the large interdependence of
military outreach designed to protect its economic interests,
China and the EU in terms of trade. Chinese investment in
Chinese naval ships, for instance, have appeared in the
Europe in 2009-2017 amounted to approximately $300
Baltic Sea and requests for naval “ports-of-call” in Europe
billion. Chinese construction contracts in that same period
may be on the increase.
came in at close to $40 billion.
Central and Eastern Europe—16+1
Although both sides view the economic dialogues as
Separate from the broader EU-China dialogue, a 16+1
essential for planning, guiding, and taking strategic
format was established after the first China-Central and
decisions on the future of EU-China relations, problems
Eastern European (CEE) Countries Economic and Trade
have begun to arise. Both sides have committed to
Forum in 2011.The countries include China, Bulgaria,
cooperate on issues such as industrial policies, non-tariff
Croatia, the Czech Republic, Estonia, Hungary, Latvia,
measures in China that may discriminate against foreign
Lithuania, Poland, Romania, Slovakia, Slovenia, and five
companies, unequal access to subsidies and cheap
EU hopefuls: Albania, Bosnia and Herzegovina,
financing, and the protection and enforcement of
Macedonia, Montenegro, and Serbia. All have been the
intellectual property rights. In June 2018, the EU launched
target of aggressive Chinese investment initiatives.
a World Trade Organization case against Chinese
legislation that the EU considered would undermine
At the 16+1 summit held in Budapest in 2017, Chinese
European companies’ intellectual property rights. During
Premier Li Keqiang launched the construction of a €3.2
the 2018 EU-China summit, the EU raised concerns over
billion Chinese-funded upgrade of the high-speed rail link
market access, state-owned enterprises, intellectual
between Belgrade and Budapest. China hopes to use the rail
property, and technology transfer practices.
link as part of its “One Belt, One Road” initiative. The
railway project helped to boost Chinese investment in the
Looking Ahead—Growing Concerns
CEE region to over €7.5 billion.
As the EU has attempted to become a preferred partner and
new influence in Asia through a series of recent free trade
Critics point out that as some CEE countries become more
agreements with Japan and South Korea, it knows it can
dependent on Chinese investment to help rebuild or
only marginally compete economically in the region with
stabilize their economies, those countries may become more
China or with China and the United States for influence.
reluctant to take positions that would anger Beijing. These
Conversely, the EU has begun to express concern over
observers believe that although a constructive economic
China’s growing economic presence in Europe and
relationship between CEE countries and China is important,
potential influence on EU policymaking.
it comes with potential risks that require China’s activities
in that part of Europe to be subject to a maximum of
Over the last decade, the EU has become a top destination
transparency and openness and to rigorously conform to EU
for Chinese investors. In 2016, the China Ocean Shipping
law and regulation so that China cannot create a wedge
Company (COSCO) acquired the majority stake in
between the region and Brussels. At the 2018 16+1 summit
Greece’s Port of Piraeus, which is considered to be the
in Sofia, Bulgaria, Li Keqiang told the group that China
main entry point for Chinese exports into southern, eastern,
was ready to fund a Global Partnership Centre in Sofia that
and central Europe. The size of the Chinese market and the
should help Chinese companies understand EU market rules
amount of money Chinese investors can bring to the table
and adhere to them in the region.
has alarmed some in the EU and has led some critics to
suggest Chinese money could rival Russian energy as a
Some observers contend that China’s investment strategy in
source of influence in Europe. Critics have pushed the EU
some cash-starved CEE countries already has caused
Commission for more transparency and screening of
ruptures in overall EU solidarity and cohesion on several
Chinese investments, more controls over potential Chinese
issues of interest to Beijing. Others argue that the concern
product “dumping,” and more scrutiny of China’s offers to
over the potential threat of China’s influence on EU
provide debt-based infrastructure financing and low-cost
decisionmaking and member state solidarity has not yet
loans. In response, some believe China has become more
become problematic in most EU member states. However,
aggressive in pushing back policy developments by
they contend that because there has been some detection of
Brussels seen as challenging China’s current favorable
Chinese influence in a few instances among a few member
business advantages in Europe. In some cases, critics have
states, the issue needs to be watched carefully by the EU
suggested that China has simply threatened to scale back
Commission and others.
investment plans or stop buying French wine, German
automobiles, or Airbus aircraft as a way to counter EU
Vincent L. Morelli,
policy direction.
IF10252
The 2018 U.S. National Security Strategy also has raised
caution by observing that China was “gaining a strategic
https://crsreports.congress.gov
The European Union and China
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https://crsreports.congress.gov | IF10252 · VERSION 7 · UPDATED