European Union - China Relation & Coorporation

Agenda History of cooperation China Economy EU Economy Trade between EU and China Summit and Dialogues Conflicts Summary

History Without diplomatic relations (late 1940s-1975) Mutually disregard (1975-1994) Mutually attraction (1995-2002) Honeymoon (2003-2004) Reflection and adjustment (2005-now)

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

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”

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”

Mutually attraction (1995-2002) China overtook Switzerland to become the EU’s second largest trading partner behind the US (2003): Bilateral trade reached US$100 billion. 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”

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’

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

Cont.. European Commission (2006):“EU-China: closer partners, growing responsibilities” European Commission (2006):“A policy paper on EU-China trade and investment: Competition and Partnership”

China Economy

Chinese Economy

Chines Economy The second largest market in global World fastest economy World largest goods exporters Second largest goods importers

Chinese Economy The economy of China is the fastest growing consumer market in the world. On a per capita income basis, China ranked 87th by nominal GDP and 92nd by GDP (PPP) in 2012, according to the

EU’s Economy

EU’s Economy The economy of the European Union generates a GDP of over €12.894 trillion (US$16.566 trillion in 2012) according to Eurostat that makes the largest economy in the world. The European Union (EU) economy has an Internal Market and the EU is represented as a unified entity in the World Trade Organization (WTO).

EU’s Economy

Trade between EU China

Trade ties EU-China The EU and china economy are the biggest traders in the world the EU is the first China’s trading partner and China is the EU’s second trading partner after the US EU is willing to open the trade relation with China with ensuring the fairness of the trade relation such as intellectual propriety and following the World Trade Organization obligations.

Cont… Agreements will carry liberalizations of investment and restriction removal for investors in both markets

Trade overall The dramatically increase between EU-China in recent year. China became the biggest source of imports for EU. China’s market is the fastest growing exports for EU the EU has also become China’s biggest source of imports. China and Europe now trade well over €1 billion a day. EU imports from China are dominated by industrial and consumer goods: machinery and equipment, footwear and clothing, furniture and lamps, and toys. EU exports to China are mainly machinery and equipment, motor vehicles, aircraft, and chemicals. Bilateral trade in services only amounts to 1/10 of total trade in goods, and the EU's exports of services only amount to 20% of EU's exports of goods

Summits and Dialogues

Summits and Dialogues Political dialogue Economic dialogue Sectorial Dialogue People to people dialogue

Conflicts and Disputes Despite that the strong relation between European Union and China and forming the strategic partnership, several disputes on unfair commercial practice held back the relation. The two largest trade partners claim disputes against each other. From textile to Solar panels and steel dispute, EU and China have engaged in trade disputes.

Example of Trade disputes 1-Solar panels: EU imposed tariff on Solar panels and it components imported from China. Reason: EU Anti-dumping Result: Agreement sets the minimum price for Chinese exporters of solar panels in the EU markets and a limit on the volume of exports.

Example of Trade disputes 2-Wine disputes: Chinese government tends to impose tariffs on imported European wins. Reason: Claims it dumping the win in Chinese’s market. Result: China open negotiation for this matter to resolve the tended dispute.

Example of Trade disputes Textile dispute: There is a dispute over textile imports into the EU (the Bra wars) Reason: Domestic European manufactures losing out to cheaper Chinese imported goods. Result: The EU and China have finally reached an agreement ending the conflict of textiles will limit the growth of Chinese textile exports to EU in the coming three years, to secure a smooth transition before the complete opening of the European market to Chinese textile products in 2008.

Summary Since the beginning of the EU- China diplomatic relation and the trade agreements signed, more comprehensive ties on political and economic cooperation was held by the two partners. These agreements create the framework of the cooperation between the European Union and China. In 2001 China accessed to the WTO, more trade an economic relation have flourished. Despite the fact that there are sever disputes between the two partners, there is an enthusiasm to resolve and continue the strategic partnership between the EU and China.

References http://europa.eu/legislation_summaries/external_relations/relation s_with_third_countries/asia/r14206_en.htm http://eeas.europa.eu/delegations/china/eu_china/political_relatio ns/index_en.htm http://www.iot- week.eu/presentations/monday/international/06_EU- China%20Cooperation%20-Xueli%20Zhang-%20CATR.pdf   http://www.friendsofeurope.org/Contentnavigation/Publications/Lib raryoverview/tabid/1186/articleType/ArticleView/articleId/3638/Do es-Central-Europes-Cooperation-with-China-Undermine-EU- Policy.aspx http://www.chinadaily.com.cn/china/2012cneuforum/node_1085724 .htm http://ec.europa.eu/trade/policy/countries-and- regions/countries/china/ http://www.lse.ac.uk/IDEAS/publications/reports/pdf/SR013/SR013- Eu-westad.pdf http://mpra.ub.uni-muenchen.de/40646/1/MPRA_paper_40646.pdf