China-Eu Relations: Strategic Partnership at a Crossroads (Report‪)‬

China-EU relations have been stable and steadily growing since the mid-1990s, prompting significant optimism in both China and Europe until a few years ago. The momentum of the China-EU comprehensive engagement was so impressive post 9/11, particularly in the wake of the Iraqi war, that the United States began to worry that the China-EU partnership would weaken the transatlantic alliance. (1) In 2004, David Shambaugh, a seasoned China watcher, even mooted that China and Europe might forge an axis in global politics. (2) Others speculated whether China and the EU would attempt to develop an "exclusive partnership". (3) Recently, however, bilateral ties have been challenged by a number of problems. Sino-European relations are becoming increasingly more fluid and unpredictable. Observers who had been optimistic now start to warn of a downward spiral in Sino-European ties. (4) Other scholars are questioning whether China and the EU can really join hands to shape a new world order. (5) Indeed, nowadays, negative reports and not-so-sanguine views frequently appear in news reports, various forums and the remarks of political leaders. The fallout from the Olympics torch relay in several European cities and the acrimonious rhetorical exchanges between China and many European countries on Tibet in 2008 were perhaps the best indicator of the changing dynamics in China-Europe relations. How do we understand the emerging dynamics in Sino-European relations? Is the Sino-European relationship inevitably moving towards an era of friction and contention, or will it be able to overcome the current challenges to get back to a new round of positive interactions? This article attempts to address these issues by thoroughly examining the major issues that are likely to continue to shape Sino-European ties in the years to come. The key factors that have shaped and are likely to continue to play a significant role in China-EU ties, notably common economic and strategic interests are discussed, as well as some of the negative trends that have emerged in bilateral relations in recent years. These issues include differences in values, frictions in economic relations and the weakening convergence of strategic interests, which are best epitomised in the EU's 2006 policy paper toward China. (6) Attempts to reconcile all these divergent interests are complicated by the inherent institutional weaknesses of the EU, the disunity among EU member states and the fact that the EU does not have sufficient hard power leverages in dealing with a rising China.