Signs of improvements in the EU-China Cooperation

During the following years, from 2009 to 2012, there were still no agreements signed, but a number of financing and cooperative agreements, as well as memoranda of understanding. The cooperation was mainly on environment-friendly project, as well as trade and technology.

Finally, the cooperation seemed to improve from 2013 on, with the adoption of the China-EU 2020 Strategic Agenda for Cooperation in 2013 and the Mutual Recognition Agreement in 2014. Although the Strategic Agenda for Cooperation is not an agreement, it is an important document which will lead the cooperation between the EU and China from now until 2020 (China-EU 2020 Strategic Agenda for Cooperation released at 16th, 2013). The Mutual Recognition Agreement is a custom agreement⁴⁶ and it is the first agreement since 2004.

To conclude, the EU and China went through a rough time during the second half of the 2000s, nevertheless there was still a willingness to cooperate between the two sides. The last few years showed some signs of improvement. However, we will have to wait for the coming years to see if these improvements continue or not.

4.2.4 Signs of improvements in the EU-China Cooperation

There have been two major signs of the EU-China economic cooperation improvement since 2013. The first one, as mentioned earlier, is the China-EU 2020 Strategic Agenda for Cooperation adopted in 2013 and the second one is China’s second policy paper on the EU published this year.

The China-EU 2020 Strategic Agenda for Cooperation

The China-EU 2020 Strategic Agenda for Cooperation was adopted during the 16^th EU-China Summit in 2013. As explained in the subsequent joint communiqué, it is “a

46 http://europa.eu/rapid/press-release_IP-14-555_en.htm

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comprehensive document setting out China and the EU's shared aims to promote cooperation in the areas of peace and security, prosperity, sustainable development and people-to-people exchanges, to take forward the China-EU Comprehensive Strategic Partnership over the coming years”⁴⁷.

In the second chapter called “Prosperity”. Both sides particularly focus on trade and investment, explaining that “they are determined to enhance further their trade and investment relationship towards 2020 in a spirit of mutual benefit, by promoting open, transparent markets and a level-playing field”⁴⁸. Furthermore, they also particularly emphasize the role of the Small and Medium Enterprises, the importance of the High-Level Economic and Trade Dialogue, the negotiations on the investment agreement, a mutually beneficial cooperation and the importance of the Intellectual Property Dialogue.

Finally, in the third part “Sustainable Development”, both sides agree that they should strengthen their cooperation to achieve sustainable development. Hence, they should improve their cooperation concerning innovation and intellectual property rights.

This paper should give new impetus to the EU-China relations which have been staggering the last ten years. We will see in a few years if they managed to follow this agenda, but for now it is another sign of the EU’s and China’s willingness to solve their issues and continue advancing together.

China Second EU Policy Paper

On April 2014, China published a Policy Paper on the EU called Deepen the China-EU Comprehensive Strategic Partnership for Mutual Benefit and Win-win Cooperation⁴⁹. This paper is particularly important as it is only the second Chinese paper on the EU, the first one dating from 2003. It arrives at a time where the EU and China are trying to boost their cooperation and get over the many issues hindering their relations.

47 http://eeas.europa.eu/statements/docs/2013/131123_01_en.pdf

48 http://eeas.europa.eu/china/docs/eu-china_2020_strategic_agenda_en.pdf

49 http://www.chinadaily.com.cn/world/cn_eu/2014-04/02/content_17401044.htm

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The paper is divided into ten major parts, concerning politics, economics, finance, industry, climate, health, education, etc. In the second part “China's EU Policy in the New Era”, China emphasizes its wish to improve and deepen its relations with the EU.

It also stresses its hope to reach, despite their differences, a mutually beneficial cooperation and recalled the EU, with the last sentence of this part, to be careful with its use of trade remedy and the way it handles their issues: “China believes that these issues should be properly handled through dialogue in the spirit of equality and mutual respect and encourages the EU to move in the same direction”⁵⁰.

Then, the fourth part is about economic cooperation and trade. Once again, China raises the matter of EU’s settlement of disputes and encourages the EU to use dialogue to solve their issues. It also discusses the investment agreement with the EU, wishing to sign the agreement as soon as possible. Furthermore, it also expresses its hope to quickly start a joint feasibility study on a China-EU FTA.

Finally, in the seventh part called “Cooperation on Industry, Agriculture, Transportation, Science and Technology and Information Technology”, China expresses its wish to strengthen their cooperation, especially in agriculture, innovation, aerospace, energy, strategic emerging industries – such as renewable energy, digital information, nanotechnology – and telecommunication.

This paper shows that China is willing to further enhance its economic relations and cooperation with the EU and is calling the EU to do the same. However, the latter still seems to have some reservations. Indeed, although the EU agreed to launch the negotiations on the investment agreement⁵¹, it is not ready yet to consider signing an FTA with China.

Concluding Remarks

The change in China’s export structure is creating additional tensions in the EU-China economic relations by increasing competition and fear for the European economy. As

50 Ibid

51 http://europa.eu/rapid/press-release_IP-14-33_en.htm

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立 政 治 大 學

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a result, the EU is particularly aggressive in its disputes against China and increased its AD investigations. Yet, whereas the increase of trade disputes is normal to some extent, the overuse of trade remedy adopted by the EU is partly responsible for the slowing down of its cooperation with China.

Indeed, no agreements were signed between 2005 and 2011 and the EU-China summit was postponed twice during that time. Nevertheless, China seems to be eager to solve its issues with the EU and further deepen their relations. While the EU drags its feet, China took the lead with its second EU policy paper, calling for stronger dialogue and cooperation.

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In this paper, we analyzed the impact of the change in China’s export structure on the EU-China economic relations. First of all, we confirmed that China’s export structures to the world and to the EU were globally evolving in the same way. The only exceptions are the sectors 3 and 9 – Mineral fuels, lubricants and related materials, and Commodities and transactions not classified elsewhere in the SITC – as well as the sector 4 of animal and vegetable oils for Western Europe only. Yet, no negative correlations were found between the change in China’s exports to the EU and the change in EU’s exports to China. Thus, this change of situation did not have a bad impact on trade between the EU and China.

Nevertheless, a widespread fear was that the complementarity between the EU and China, which was a key point in their relations, would be affected. However, both sides have globally kept a pretty good complementarity for now. Only the sectors of chemicals and machinery and transport equipment are affected, especially for Central and Eastern Europe. Moreover, the technological complementarity is also globally maintained as China’s exports are switching from resource intensive products to high-skill technology intensive manufactures, while the EU exports mainly medium-high-skill technology intensive goods.

On the other hand, investments did not seem to be affected by China’s change in export structure either. Thus, the latter does not have a direct negative impact on the EU-China economic relations. Nonetheless, this change of situation added to a difficult economic context in Europe engendered a fear from China in many European countries. In response, the EU multiplied the anti-dumping and subsidy investigations against China. Indeed, the average number of investigations launched by the EU is of 9 per year from 2004 to 2014, compared to 5 from 1995 to 2003. Moreover, most of these investigations ended up in at least provisory measures as only 10 on 135 have been repealed since 1995.

These measures are particularly badly received by China and contributed to the slowdown of their cooperation from 2005 on. Indeed, despite an especially well developed cooperation framework, the EU and China let their issues accumulate and