The Europe-Chinaeconomic relationship is toobig, and too well developed, tofail, but the protection of pastachievements is currently theonly factor keeping EU-Chinapolicy relations in balance.Cooperation on trade and invest-ment is fraught with misun-derstanding, offended egos,discontent, and anger. Beijing and Brussels seem content towait for China’s new leader-
ship to take ofce before they
attempt to deepen economicand commercial policy coopera-tion, but there is little reason tobelieve that the bilateral relation-ship will radically improve underchanges in the Chinese capital.The EU has tried time and timeagain to pressure China intoopening more of its market toEuropean exports by threatening to cut access to its own marketsif Beijing does not comply. AndChina has repeatedly tried tobypass Brussels in its nego-tiations with Europe, prefer-ring instead to work throughmember states. But a fracturedEU will have negative long-termconsequences for China and itseconomic interests.
Stockholm China Forum
When Sisyphus met Icarus:EU-China Economic Relations during theEurozone Crisis
By Fredrik Erixon
1744 R Street NWWashington, DC 20009T 1 202 683 2650F 1 202 265 1662E firstname.lastname@example.org
Te Europe-China economic relation-ship is too big, and too well developed,to ail. Bilateral exchange recoveredquickly rom the sharp drop in 2008-09, and bilateral trade, despite theoverall contraction in the eurozone,increased considerably in 2011. Eveni growth in trade and investment wereto slow in 2012, the European Unionand China will, under current ore-casts, post a record high with two-way trade exceeding €500 billion. Te EUis China’s biggest trading partner,and China is the EU’s second biggest.Neither party will allow the relation-ship to be ractured by economic andcommercial policy conicts. It is a signo maturity that current volumes o trade and investment glue the relation-ship together. Tat’s the good news.Te bad news is that the protection o past achievements is currently the only actor keeping EU-China policy rela-tions in balance.
The EU-China Trust Defcit
Te climate o EU-China policy coop-eration has soured considerably in thepast two years. Cooperation on tradeand investment is raught with misun-derstanding, oended egos, discon-tent, and anger. In some quarters,rustration is reaching a boiling point.Te EU-China High Level Economicand rade Dialogue, which ollowedhard on the heels o the U.S.-ChinaStrategic and Economic Dialogue, hasbecome largely dysunctional, bothas a orum or ecient, business-stylenegotiations on selective market-accessissues and as a venue or orming jointstrategic visions or uture bilateraleconomic relations. In some policy areas, e.g. the growing dispute over theEU’s carbon ees or aviation, relationsare not ar rom complete breakdown.Key ocials do not speak to eachother. E-mails and phone calls gounanswered.Tere is generally little energy inEU-China talks, and ew expect muchrom them. While U.S. newspapers ranseries o articles about the Valentine’sDay visit o Xi Jinping, China’s Presi-dent-in-waiting, to the United States,the European media barely botheredto pass comment on the act that, atthe same time, the EU’s top leader-ship – including the President o theEuropean Commission, José ManuelBarroso, and the President o the Euro-pean Council, Herman Van Rompuy – were in Beijing or the EU-China