China and the European Union

1. China and the European Union Prof. Dr. Jing Men InBev-Baillet Latour Chair of European Union - China Relations College of Europe jing.men@coleurope.eu

2. Outline • A historical review of EU-China relations • Examination of the overlapping and conflicting interests between the EU and China • Analysis of the promises and problems of the partnership • Conclusion

3. A historical review • Without diplomatic relations (late 1940s-1975) • Mutually disregard (1975-1994) • Mutually attraction (1995-2002) • Honeymoon (2003-2004) • Reflection and adjustment (2005-now)

4. Without diplomatic relations (late 1940s-1974) • The Cold War environment • The EC/EU: • The establishment of Communities • The first enlargement • Under the protection of the US • China: • The founding of the PRC • Cooperation and competition with the Soviet Union • Conflicts with the US

5. Mutually disregard (1975-1994) • In 1975, diplomatic relations were established between the European Community and China. • Two documents: • 1978: bilateral trade agreement • 1985: trade and cooperation agreement • Bilateral trade: • US$ 2.4 billion in 1980 • US$ 33.97 billion in 1994 • Political dialogues established in 1994 • European Commission (1994): “Towards a New Asia Strategy”

6. Mutually attraction (1995-2002) • European Commission (1995): “A long term- policy for China-Europe relations” • Some sectoral dialogues were established • The summit meeting system created in 1998 • European Commission(1995): “Building a Comprehensive Partnership with China” • China overtook Switzerland to become the EU’s second largest trading partner behind the US (2003): • Bilateral trade reached US$100 billion.

7. Mutually attraction (1995-2002) • The rise of China is unmatched amongst national experiences since the Second World War. Japan has made its mark as an economic power, the Soviet Union survived essentially as a military power, China is increasingly strong in both the military-political and the economic sphere. -- European Commission (1995): “A long-term policy for China-Europe relations”

8. Honeymoon (2003-2004) • European Commission (2003): “A maturing partnership - shared interests and challenges in EU-China relations” • Chinese government (2003): “China’s EU policy paper” • Frequent exchanges of visits: • EU officials paid 206 visits to China in 2004 • Chinese Premier Wen in Brussels in May 2004 • In words of Romano Prodi: EU-China relations are ‘a very serious engagement’

9. Reflection and adjustment (2005-now) • Problems in lifting the arms embargo • The EU’s rising trade deficit: • China’s exports to the EU • US$19.09 billion in 1995 US$181.98 billion in 2006 • China’s imports from the EU • US$21.25 billion in 1995 US$90.32 billion in 2006 • European Commission (2006):“EU-China: closer partners, growing responsibilities” • European Commission (2006):“A policy paper on EU-China trade and investment: Competition and Partnership”

10. Overlapping and conflicting interests • Multilateralism/multipolarity and international cooperation • The arms embargo issue • The textile dispute

11. China’s understanding of building multipolarity before 2003 • By virtue of its economic, technological and military advantages, an individual country is pursuing a new "gunboat policy" in contravention of the United Nations Charter and the universally-acknowledged principles governing international relations in an attempt to establish a monopolar(unipolar) world under its guidance. This is against the tide of history and is doomed to failure. Innumerable historical facts demonstrate that hegemonism may hold away for a time, but it cannot wreak havoc for a long time. China is firmly opposed any form of hegemonism and power politics.

12. China’s understanding of building multipolarity before 2003 • Multipolarity “helps weaken and curb hegemonism and power politics, serves to bring about a just and equitable order and contributes to world peace and development.”

13. China’s understanding of multipolarity after 2003 • Our efforts to promote the development of the world towards multipolarization (multipolarity) are not targeted at any particular country, nor are they aimed at re-staging the old play of contention for hegemony in history. Rather, these efforts are made to boost the democratization of international relations, help the various forces in the world, on the basis of equality and mutual benefit, enhance coordination and dialogue, refrain from confrontation and preserve jointly world peace, stability and development.

14. The EU’s understanding of multilateralism • The end of the Cold War has left the United States in a dominant position as a military actor. However, no single country is able to tackle today’s complex problems on its own. • Europe should be ready to share in the responsibility for global security and in building a better world. • International cooperation is a necessity. We need to pursue our objectives both through multilateral cooperation in international organizations and through partnerships with key actors.

15. The arms embargo issue • The issue before 2003 • The issue between 2003 and 2005 • The issue at current stage

16. The textile dispute • The abolishment of the 40-year-long quota regime on Jan. 1, 2005 • The surge of Chinese textile products export to the EU • The agreement in June 2005 between the EU and China • The second agreement in September 2005

17. The textile dispute • Problems indicated: • The Community does not speak with one voice. • Different groups have different interests. • Both the EU and China lack a necessary understanding of each other’s market development. • A joint monitoring system introduced

18. Promises and difficulties • Shared long-term interest in achieving economic prosperity and worldwide political influence: • Treaty of Lisbon • Hu Jintao’s report at the 17th Party Congress • Difficulties: • Differences in ideological and development stages • The EU is composed of 27 member states • The role of the US

19. The negotiations of PCA • Negotiations for a Partnership and Cooperation Agreement were launched in January 2007 • It is an upgrade of the 1985 Trade and Cooperation Agreement • Some issues: • The Taiwan issue, the human rights issue, the lifting of arms embargo, the market economy and market access

20. Conclusion • EU-China relations are in a stage of reflection and adjustment. • The important basis of cooperation: • Economic interdependence • Shared understanding of maintaining peace and stability • The partnership may not be exempted from difficulties and problems, but it needs to be maintained and developed for the sake of mutual benefits.