Updated April 1, 2019
The European Union and China
Background
Strategic Dialogue to discuss bilateral relations, with a
The European Economic Community (EEC), the
focus on foreign and security policy, at the level of the High
predecessor to the European Union (EU), and China
Representative/Vice President on the EU side and the State
established diplomatic relations in 1975. The EU-China
Councilor for Foreign Affairs on the Chinese side. This
relationship, which began as a framework of economic
political dialogue attempts to address critical global issues,
cooperation, has evolved into a comprehensive political and
such as such as human rights, the South China Sea, North
economic relationship. Today, the EU’s China policy
Korea, and China’s “One Belt, One Road” initiative.
prioritizes reciprocity, a level playing field, and fair
competition in political and economic relations. It also
The European Union and China at a Glance
seeks to advance European values, such as the promotion of
EU: 28 member states
democracy, rule of law, human rights, economic and social
reform in China, and respect for the U.N. Charter’s
Population: EU: 500 mil ion; China: 1.3 bil ion
principles, and to raise the EU’s profile in China
EU GDP (2016): approx. €14.0 tril ion
China GDP (2015); approx. $11 tril ion
In November 2013, the EU-China Strategic 2020 Agenda
China is now the EU’s second-largest trading partner,
for Cooperation was launched (http://eeas.europa.eu/
behind the United States. The EU is China’s largest
archives/docs/china/docs/20131123_agenda_2020__en.pdf)
trading partner.
The agenda established the framework intended to guide
EU-China relations until 2020. The Strategic 2020 Agenda
EU goods exports to China (2017): €198 bil ion
is being implemented through three pillars: a High-Level
EU goods imports from China (2017): €375 bil ion
Strategic Dialogue, a High-Level Economic and Trade
EU services exports to China (2017): €45 bil ion
Dialogue, and a biannual People-to-People Dialogue
EU services imports from China (2017): €28 bil ion
established in 2012. Today, according to the EU, the EU
China’s investment in Europe is growing rapidly. EU
and China have over 60 high-level and senior-level
foreign direct investment in China was approximately
dialogues, working groups, and steering committees
€6.8 bil ion in 2014, and China’s investment in the EU
reflecting the wide-ranging scope of the relationship,
reportedly was around €35 bil ion in 2016.
including in areas such as cyber, transnational crime,
Sources: European Commission, Eurostat, Rhodium Group.
economics, high-tech innovation, tourism, energy, and the
Note: Exchange: €1 = $1.1
environment. The EU and China also have agreed to further
develop exchanges on legal affairs and digital connectivity.
Through the people-to-people exchange, the EU and China
China’s Perspective
have committed to the continued development of
In June 2015 remarks to the China-EU Business Summit,
sustainable tourism, which, according to both sides, is
Chinese Premier Li Keqiang described the EU as “a major
booming. Approximately 6 million Chinese visitors
pole on the global political arena.” China’s strategy in
traveled to Europe in 2018.
Europe appears to institutionalize engagement, gain access
Europe’s significant market and technology base, to garner
Another aspect of the EU-China dialogue is designed to
support for China’s global interests and to reduce, but not
promote intellectual exchanges between major cultural,
challenge, long-standing U.S. dominance in Europe.
scientific, and educational institutions. As part of this
dialogue, the China-Europe International Business School
Political Dimension
and the EU-China School of Law have, for years,
According to EU leadership, the EU’s commitment to a
successfully trained business and legal experts to promote
political dialogue with China reflects Europe’s recognition
exchanges between China and Europe. More than 200,000
that China, as a growing economic and political power, and
Chinese nationals are studying in Europe, and some 40,000
an increasingly active member of the international
EU citizens are studying in China.
community, can exert significant influence on an array of
issues of global concern. In a world increasingly bound
Economic Dimension
together by the forces of globalization, the EU sees
The EU and China are two of the biggest trading partners in
cooperation with China, bilaterally or within multilateral
the world, with EU-China trade increasing dramatically in
structures, as crucial to achieve progress in any number of
recent years. China and Europe now trade an average of
issues of mutual importance to Brussels and Beijing.
well over €1 billion each day. Bilateral trade represents
approximately 3.3% of the EU’s GDP and close to 6% of
The EU’s relations with China, while predominantly
China’s GDP, underlining the large interdependence of
economic in nature, are also designed to promote EU
China and the EU in terms of trade.
influence in other areas. The EU and China hold an annual
https://crsreports.congress.gov
The European Union and China
Over the last decade, Europe has become a top destination
communications technology systems in crucial sectors has
for Chinese investors. Between 2009-2017 this investment
become a concern not only in the U.S. but also in Europe.
amounted to approximately $300 billion. Chinese
In addition, as China has begun to pursue a more global
construction contracts in that same period came in at close
military outreach designed to protect its economic interests,
to $40 billion. In 2016, the China Ocean Shipping
Chinese naval ships, for instance, have appeared in the
Company (COSCO) acquired the majority stake in
Baltic Sea and requests for naval “ports-of-call” in Europe
Greece’s Port of Piraeus, which is considered to be the
may be on the increase.
main entry point for Chinese exports into southern, eastern,
and central Europe. In March 2019, Italy became the largest
Central and Eastern Europe—16+1
European country to agree to participate in China’s Belt and
Separate from the broader EU-China dialogue, a 16+1
Road Initiative pledging to cooperate in the development of
format was established after the first China-Central and
the nation’s infrastructure, civil aviation, ports, energy and
Eastern European (CEE) Countries Economic and Trade
telecommunications.
Forum in 2011.The countries include China, Bulgaria,
Croatia, the Czech Republic, Estonia, Hungary, Latvia,
Both sides view the economic dialogue as essential for
Lithuania, Poland, Romania, Slovakia, Slovenia, and five
planning, guiding, and taking strategic decisions on the
EU hopefuls: Albania, Bosnia and Herzegovina,
future of EU-China relations and both sides have committed
Macedonia, Montenegro, and Serbia. All have been the
to cooperate on issues such as industrial policies, non-tariff
target of aggressive Chinese investment initiatives.
measures in China that may discriminate against foreign
companies, unequal access to subsidies and cheap
At the 16+1 summit held in Budapest in 2017, Chinese
financing, and the protection and enforcement of
Premier Li Keqiang launched the construction of a €3.2
intellectual property rights. However, In June 2018, the EU
billion Chinese-funded upgrade of the high-speed rail link
launched a World Trade Organization case against Chinese
between Belgrade and Budapest. China hopes to use the rail
legislation that the EU considered would undermine
link as part of its “One Belt, One Road” initiative. The
European companies’ intellectual property rights. During
railway project helped to boost Chinese investment in the
the 2018 EU-China summit, the EU raised concerns over
CEE region to over €7.5 billion.
market access, state-owned enterprises, intellectual
property, and technology transfer practices.
Critics point out that as some CEE countries secure Chinese
investment to help rebuild or stabilize their economies,
Looking Ahead—Growing Concerns
these countries may become more reluctant to take
EU leaders have begun to express concern over China’s
positions that would anger Beijing. Some observers contend
growing economic presence in Europe and potential
that China’s investment strategy in some EU and CEE
political influence on EU policymaking. The size of the
countries already has caused ruptures in overall EU
Chinese market and the amount of money Chinese investors
solidarity and cohesion. Some believe Beijing has become
can bring to the table has led some critics to suggest
more aggressive in pushing back policy developments by
Chinese money could replace Russian energy as a source of
Brussels seen as challenging China’s current favorable
significant influence in Europe. According to some, Europe
business advantages in Europe. In some cases, critics have
lacks a unified policy approach toward China and as such
suggested that China has simply threatened to scale back
has given China increased leverage in negotiating on a
investment plans or stop buying European products as a
bilateral basis with EU member countries.
way to counter EU policy direction.
In response, the EU Commission promoted, and the
These observers believe that although a constructive
European Parliament adopted, legislation requiring
economic relationship between CEE countries and China is
transparency and screening of Chinese investments, more
important, it comes with potential risks that require China’s
controls over potential Chinese product “dumping,” and
activities in that part of Europe to be subject to a maximum
more scrutiny of China’s offers to provide debt-based
of transparency and openness so that China cannot create a
infrastructure financing and low-cost loans.
wedge between the region and Brussels. At the 2018 16+1
summit in Sofia, Bulgaria, Li Keqiang told the group that
In March 2019,the EU released a new EU-China Strategic
China was ready to fund a Global Partnership Centre in
Outlook, stating that China is, simultaneously a cooperation
Sofia that should help Chinese companies understand EU
partner with whom the EU has closely aligned objectives, a
market rules and adhere to them in the region.
negotiating partner with whom the EU needs to find a
balance of interests, an economic competitor in the pursuit
Others argue that the concern over the potential threat of
of technological leadership, and a systemic rival promoting
China’s influence on EU decisionmaking and member state
alternative models of governance. In the strategy, the EU
solidarity has not yet become problematic in most EU
sets out a 10-point program stating that all EU member
member states. However, they contend that because there
states, in cooperating with China, have a responsibility to
has been some detection of Chinese influence in a few
ensure consistency with EU law, rules and policies.
instances among a few member states, the issue needs to be
watched carefully by the EU Commission and others.
At the same time, a security dimension has raised concerns
within the EU particularly with respect to Europe’s
Vincent L. Morelli,
technology base, for instance, its 5G networks. China’s role
in connecting billions of sensitive information and
IF10252
https://crsreports.congress.gov
The European Union and China
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10252 · VERSION 8 · UPDATED