Europe-China: convergence, divergence and the vital space between

Despite disagreements, China and EU must pull together to boost trade, global governance

The European Union and China need to press ahead in areas of mutual benefit, such as connectivity and global governance, despite their bilateral disagreements on trade and amid an increasingly fractured global environment, speakers and participants said during heated discussions at Friends of Europe’s ninth Europe-China Forum and Policy & Practice Roundtable on 18-19 November.

Europe and China are already closely linked through trade and politics – and are becoming more so through plans including China’s Belt and Road Initiative and Europe’s own cross-border connectivity plans. But both Brussels and Beijing need to step up their game to reform and re-energise the rules-based multilateral trading system centred on the World Trade Organization (WTO).

“China and the EU are important partners for the international challenges of the times,” said Phil Hogan, European Commissioner-designate for Trade. “We have benefited enormously from the multilateral trading system, but the WTO is facing an existential crisis. The global economy can only continue if we maintain predictability and stability under a global rules-based system.”

China wants to form a free trade agreement with the EU as quickly as possible, but others caution against detracting attention from the Comprehensive Agreement on Investment (CAI) which both parties agreed to conclude in 2020. “We should work together to start negotiations on a free trade agreement, as we talk about an investment agreement,” said Wang Hongjian, chargé d’affaires of the Chinese Mission to the EU. “We hope Europe will maintain a forward-looking and independent policy towards China and respect China’s territoriality and sovereignty.”

Though much work remains to be done before an EU-China CAI can be concluded, important steps are being taken. The two sides announced a landmark agreement on geographical indications on 6 November. Expected to enter into force before the end of 2020, the agreement will protect 100 European and 100 Chinese geographical indications, including Cava, Feta and Pixian bean paste.

Welcoming this agreement, Gunnar Wiegand, Managing Director for Asia-Pacific at the European External Action Service (EEAS), said that further progress would depend on the opening of Chinese markets to European businesses. “This is key to open up new areas in China for European investors. This is difficult but doable. We need to find the right balance of interests.” He pointed out that China had announced an aim to be a world leader in 10 key technologies by 2025. “Thank you for the challenge. We will compete. We are systemic rivals – not systematic or strategic. Reciprocity is a key requirement to make sure our relations continue on an upward course.”

The breadth of the relationship and the vast stakes – economic, political and environmental – mean that the relationship is never going to be simple. But signs are that it will remain constructive. “Europe and China have a complex, multifaceted relationship,” said Shada Islam, Director of Europe and Geopolitics at Friends of Europe. “We agree and we disagree. In difficult times it is tempting to withdraw and retreat, as some nations are trying to do. But Europe and China have decided that is not the right approach for their citizens or for the common public good.”