Symbiotic Relationship

n May 1975, Sir Christopher Soames, the first European Commissioner to visit China, touched down in Beijing on a mission to lay the foundation for a fledgling Sino-European relationship. Now 33 years later, the current President of European Union Commission Jose Manuel Barroso led a high-ranking delegation of nine commissioners back to the nation's capital to foster an EU strategic partnership with China. The EU described it as the largest joint mission abroad of the European Commission for a single meeting in its 50 years of existence.

Barroso said his three-day visit was an "unprecedented meeting" between the EU and the Chinese Government. From April 24 to 26, the two sides signed agreements and exchanged views on energy-saving projects, renewable energy uses and sustainable development, as well as strengthening political and economic ties. Both the official communiqués and critics' analyses of the meetings showed that the Sino-EU relationship is in a positive place, and cooperation and ambitious interdependence were highly touted.

EU visit

At Chinese Premier Wen Jiabao's invitation, Barroso had organized one third of the EU's total 27 commissioners to China. On Barroso's agenda were issues like climate change, sustainable development, macroeconomic imbalances, international security, financial turmoil, exchange rate fluctuations, energy prices, food prices, raw materials and development in Africa.

President Hu Jintao and Premier Wen met the delegation and exchanged views with Barroso on Sino-EU ties and big global issues.

China's delegation included ministers from 10 ministries who participated in the first session of High-Level Economic and Trade Dialogue Mechanism (HLM), co-chaired by Chinese Vice Premier Wang Qishan and Barroso's personal representative Commissioner Peter Mandelson.

Apart from scientific and technological cooperation, notably in the peaceful use of nuclear energy and cooperation on climate change, environment protection and energy saving, the HLM, which is of vice-premier level, or the highest level of current China-EU trade and economic dialogue mechanism, was one major achievement of the Barroso's Beijing tour.

Although agreements were not signed in specific fields, the two sides reached consensus on making the HLM an annual event. Under the HLM framework, China and the EU can discuss issues in various aspects of trade and economic cooperation. "Compared to existing dialogue mechanisms in this field, the HLM focuses more on fields of strategic, foresighted and blueprinted significance. It will not weaken or replace other dialogue mechanism between China and the EU, but will conduct them," said Sun Yongfu, Director General of Department of European Affairs, Ministry of Commerce.

The Chinese Government and the EU delegation also set agendas for the China-EU summits this year that will be held in France and Beijing. The two sides agreed to develop new strategic cooperation on science and research, with identified areas of energy, climate change, biotechnology and health, and also agreed to sign a Financing Agreement to set up a China-EU Clean Energy Center at this year's China-EU summit in Beijing.

On a people-to-people exchange level, Barroso told a press conference held on April 25, "The EU considers the stability and the prosperity of China is of paramount importance for the international community," vowing that the two sides would increase people-to-people exchanges, particularly among students and young professionals so as to mold a solid foundation to the bilateral relations. He also confirmed that the EU rejected the boycott of the Olympics in Beijing.

China-EU relationship

Chinese experts on international studies were upbeat about Barroso's visit.

"The China-EU relationship is a beneficial one," said Zhao Chen, who is on EU study from the Chinese Academy of Social Sciences (CASS). He noticed that 2003 was the "honeymoon" of bilateral relationship. Although there were small twists and turns in various areas, especially in trade and economic aspects, the overall situation of current bilateral tie remains good, the foundation of the relations is solid, and they have common understanding of building a multilateral world, Zhao told Beijing Review.

The overall situation of current bilateral ties remains good, the foundation of the relations is solid, and they have common understanding of building a multilateral world.

- Zhao Chen

In 2007, a new generation of European leaders came into power. Unlike their predecessors' pragmatic approach in dealing with China, some of these new leaders pay more attention to "value-oriented diplomacy," Zhao said. This tendency was related to the changing political, trade and economic situation between the two sides. When China had a trade surplus in bilateral trade, protectionism bloomed in Europe, and the feelings were reflected in the diplomatic field. "As some European countries thought they were losing their advantage in trade competition, they tried to occupy the high moral ground by insisting on value-oriented diplomacy," he said.

China and the EU need each other now more than ever, Feng Zhongping, Director of the Institute of European Studies, China Institutes of Contemporary International Relations, told the Global Times, a daily newspaper. He said that disputes and conflicts arose because of their different interests. Previously, Europe believed China's development offered a big market. Nowadays, some European countries, competing with China at the age of economic globalization, consider China's development as a kind of threat. "But their need of each other means that the bilateral relationship will develop despite small and short-term challenges," he said. Feng said that while European countries can realize economic benefits through communication, they hope to influence China through this communication and make China move in the direction that the EU countries would like to see.

Currently, China and the EU are working on negotiations to sign a Partnership and Cooperation Agreement (PCA), which is expected to replace the 1985 China-European Community Trade and Cooperation Agreement and serves as the new framework document that guides the bilateral relationship, especially in the political and economic aspects. "The new PCA will set the tone for the partnership and cooperation between the two sides in the coming 10 to 20 years," Zhao predicted.

Same direction

In recent years, the trade and economic cooperation between China and the EU has developed rapidly. The EU is now China's top trade partner and biggest technology exporter, and China is the EU's second biggest trade partner and fourth biggest importer. "The bilateral trade volumes are impressive and are increasing every year by 20-25 percent," said Barroso on April 25.

EU companies' investment to China totaled nearly $54 billion, with almost 27,000 EU companies setting up their plants in China. Chen Deming, Minister of Commerce, published an article on April 25 in the British newspaper Financial Times and confirmed that China and the EU, as two big world markets, have had a significant input into each other's economic development.

Trade imbalance between China and the EU is an issue affecting bilateral trade. Last year, China's trade surplus reached 134.23 billion euro ($208.49 billion), which triggered dissatisfaction among the EU members. Moreover, the two sides have disputes on EU antidumping policies against Chinese products. However, Chinese observers believed that the bilateral cooperation, which is benefiting both sides, would develop in many areas, such as in environment protection and research on clean and renewable energy, in the future.

In his article, the minister of commerce pointed out that in 2007, China imported $110 billion from the EU, up 22.4 percent from the year before. The import growth rate from the EU was 6 percent higher than the import growth rates from Japan and the United States.

During the first quarter of 2008, China imported nearly $30 billion from the EU, increasing 25.6 percent, which actually created about more than 2.2 million job opportunities to the EU, said Chen. Now export volume to China is the fastest growth of all EU total export volume.

Zhao from the CASS said that although the EU claimed that 93 percent of its trade deficit was from China, it did not understand that over 60 percent of its trade deficit with China was created through Sino-EU joint ventures. "Actually, most of the profits of these joint ventures go to the EU," he said, adding, "The trade surplus problem is a pseudo-problem."

Zhao said that government purchase is a good method to balance current trade surplus. As the international tradition shows, the precondition of big-scale government purchases is maintaining harmonious political relations between them.

Zhao Yumin, an expert from the Ministry of Commerce, pointed out that due to the complementary trade, the trade surplus did not impact EU industrial structure.

Besides, as the EU has the advantage in researching advanced technologies of clean energy and improving energy efficiency, exporting technologies to the Chinese market in these areas would bring the EU big benefits, he added.