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EU-China relations moving forward

30 June 2015

The 29 June EU-China summit attended by Chinese Premier Li Keqiang and Presidents Tusk and Juncker marked the 40th anniversary of diplomatic relations between the EU and China. Relations between the first and second global economic powers have developed tremendously over the past four decades and are now set for a further leap forward. The summit agreed a broad-ranging agenda for future cooperation and now the challenge will be to implement agreed policies and finalise negotiations on key subjects such as a bilateral investment treaty (BIT).

Trade between the EU and China has continued to flourish but experts believe that a BIT could give a one per cent boost to economic growth. The EU share of foreign investment in China is 28% while China accounts for less than 5% of overseas investment in Europe. European businesses complain about the lack of an effective legal framework guaranteeing protection of investments, weak enforcement of IPR and forced technology transfer. Chinese businesses complain about the complexity of EU rules and regulations.

Both sides agreed to launch a new dialogue on 'legal affairs' at the summit which should tie in with the ‘rule of law’ priorities of the Chinese leadership.

Premier Li also sought to explore potential synergies between China's One Belt, One Road (OBOR) initiative and the European Fund for Strategic Investment (EFSI), also known as the 'Juncker plan'.  The summit statement noted that the two sides are ready to discuss potential cooperation in transport, communication and energy infrastructure.  As regards connectivity the two sides will look for synergies between the digital transformation of the EU economy (5G) and China's efforts to link ICT and manufacturing (Industry 4.0). EU officials emphasise the need to develop the OBOR at a steady pace given the political risks and complexities involved. Few of the countries between the EU and China can be described as stable. 

The summit also discussed the new Asian Infrastructure Investment Bank (AIIB) which has seen more than half of the EU member states joining as founding members. EU leaders emphasised the importance of transparency and international governance standards for the bank.

Another top agenda item was climate change with a special summit statement. Last year China pledged that its carbon emissions would peak around 2030 and its use of non-fossil energies, including nuclear energy, would be raised to 20% by 2030. The EU welcomed China's climate change commitments but suggested that 2030 was too late to limit global warming to 2°C. The EU has agreed on a binding greenhouse gas reduction target of 40% and a renewable energy share of at least 27% of total EU energy consumption by 2030. The summit provided an opportunity for both sides to agree on a common approach for the Paris COP21 meeting in December.

One of the success stories of EU-China cooperation is the Urbanisation Partnership launched in 2012 and which has a strong green technology component. Several Chinese cities and provinces have introduced an emissions’ trading system modelled on the EU. Leaders discussed how to build on these achievements.

On the foreign policy front there were few disagreements. China has cooperated closely with the EU on the Iran nuclear negotiations, on the anti-piracy operation in the Gulf of Aden and exchanged views on the volatile situation in the Middle East. EU leaders briefed the Chinese side on the situation in Ukraine and China covered developments in the South China Sea, Afghanistan and the situation in the Korean peninsula.

The summit took place in the midst of the Greek crisis and Premier Li expressed the hope that Greece would finalise a deal with its creditors to allow it to remain within the Eurozone.

Summit statement
Climate change statement