The strategic partnership between Beijing and Brussels has evolved over time, and the EU collectively represents China’s largest trading partner. While cooperation has been fruitful and potential avenues for further collaboration exist, substantive progress will depend on the artful management of competing priorities. The partnership undoubtedly has produced beneficial programs, but whether the arrangement is comprehensive and strategically sound remains an open question.

At Carnegie’s second Global Dialogue, Philip Bartley of the China-EU Trade Project moderated a panel on the opportunities and challenges of increasing bilateral cooperation between China and the EU, while simultaneously managing multilateral relations between China and individual EU member states. The panelists were Sebastian Heilmann of the Mercator Institute for China Studies, Carnegie–Tsinghua’s Shi Zhiqin, Duncan Freeman of the Brussels Institute of Contemporary Chinese Studies, and Sun Haiyan of the China Center for Contemporary World Studies.

Discussion Highlights

  • Shared Interests: Panelists observed that Beijing hopes to benefit from Europe’s familiarity with high-tech industrial production, flexible market networks, and the challenges of managing a fully developed economy. They further suggested that remaining competitive in increasingly globalized markets and supporting an aging population are policy challenges that both China and the EU face. These tasks demonstrate a common need for reform agendas that fundamentally restructure education, health care, and social welfare programs for the twenty-first century. Moreover, one panelist noted that both parties share the frustration of being disadvantaged by institutional arrangements that shape world financial markets to favor the United States. 
     
  • Balancing Bilateral and Multilateral Commitments: Panelists emphasized that relations between China and the EU involve many state actors and that parallel interactions do not always coincide perfectly. Nevertheless, high trade volumes have ensured that the strategic partnership between Beijing and Brussels remains a cornerstone of Chinese foreign policy that cannot be undermined by bilateral dealings between China and individual EU member states. One panelist contended that bilateral interactions, like Chinese Premier Li Keqiang’s visit to Germany in October, provide opportunities to test innovative ideas in a national state setting before integrating successful strategies into the EU organizational structure. In particular, Li’s visit helped complete a bilateral pact that includes a series of initiatives to promote innovation in energy and technology, a commitment to finalize an investment agreement, and over two billion euros in economic and investment deals. Such bilateral engagement, the panelist argued, need not be a paralyzing agent to further Sino-European collaboration.      
     
  • Implications of New Leadership: Panelists maintained that leadership transitions in China and Europe have both broadened and narrowed the scope of future Sino-EU cooperation. They discussed how Xi Jinping has increased Chinese engagement with the EU. Nevertheless, panelists conceded that the success of nationalist parties in this year’s European Parliament elections suggests a potential swing to the far right that might constrain future collaborative overtures.
     
  • The Future of European Firms in China’s Economy: In accordance with last year’s Third Plenum, the Chinese government has announced that market forces, as opposed to the state, will be given a higher degree of prominence in influencing economic outcomes in China. Still, it remains uncertain, one panelist asserted, to what extent this principle will apply to foreign firms operating in China. In the end, China must decide how to balance offering coveted market access to European companies against the perceived risks in exposing state-owned enterprises to international competition.
     
  • Competition Impeding Cooperation: Despite calls for Sino-EU collaboration on developmental goals, panelists warned that competitive forces may constrain these efforts. In industries such as energy resources and renewables, China and Europe remain competitors and firms contend with each other for market share. Based on these disincentives and the uncertainty surrounding European firms’ market access to China, panelists concluded that conditions that appear ripe for joint efforts may not produce desired outcomes.