EU-China Economic and Trade Relations

Summary

Economic and trade relations between Europe and China have developed for a long time. The two sides have conducted goods exchange for over two thousand years. The clearest proof of this is the Silk Road, which dates back to the Han Dynasty (B.C. 202 – A.C. 8) stretching from Chang'an (currently Xi'an) to Ancient Rome. This chapter discusses bilateral economic and trade relations after the EEC, and later the EU after its formation in 1993, and China established their official diplomatic relations in 1975.

START AND FIRST DEVELOPMENT OF EEC/EU-CHINA RELATIONS

On 4 May 1975, the Vice-President of the European Commission, Christopher Soames, visited China and met Chinese Premier, Zhou Enlai. At that time, China made a decision to accredit an ambassador from the European Economic Community (EEC). On 16 September 1975 the EEC and China established official relations, opening a new chapter of bilateral relations.

The EEC and China established diplomatic relations in the Cold War era. At that time, the USA considered China as an “enemy ”, but European countries continued trading with China. Furthermore, a number of European countries established formal diplomatic relations with China even before 1975, e.g. Italy (1970), Belgium (1971), the Federal Republic of Germany (1972) and Luxemburg (1972). The EEC and China established their diplomatic relations in the Cold War era mainly because they desired to develop economic cooperation and anticipated economic and political mutual benefits. From this point of view, we can see EEC-China relations were pragmatic from the very beginning.

Notwithstanding the establishment of diplomatic relations, trade between the EEC and China did not see significant changes in the first three years, from 1975 to 1977 (see Figure 3. 1).

Trade volume had small increase in 1976 but declined in 1977. Generally speaking, there was not significant stable growth in trade. The USA and European countries restricted relations with China. The USA did not even establish official diplomatic relations with the People's Republic of China. Furthermore, there was the Cultural Revolution in China so the state's emphasis was on the class struggle rather than economic development and trade cooperation.