give play to one’s own advantages better.^32 Therefore, the voices from the EU side
about threats or trade protectionism have mirrored more deep-seated problems: the
EU will have to reform itself in order to develop its market and enhance compet-
itiveness rather than provide more trade protection.
In order to maintain the continuous development of China-EU trade like that in
the past ten years, both China and the EU will have to identify new strategies to
contain the pressure of protectionism and effectively express their own concerns to
the other party. This requires both sides to clearly understand the reality, adjust their
position and change their thinking.
In the past ten years, substantial progress has really been made in China-EU
trade relations and China has potentially surpassed the USA for once to become the
EU’s No. 1 trading partner. However, we should be aware of many institutional
deficiencies in China-EU economic and trade relations. Soaring China-EU trade is
characterized more by natural development to some extent. Both sides have obvi-
ously underestimated the sharp increase in trade and did not develop effective
guidance mechanisms.
With regard to high-level dialogue mechanisms, the China-EU high-level eco-
nomic and trade dialogue was held in 2008, 2009 and 2010 for the 1st, 2nd and 3rd
times respectively, but the 4th dialogue was postponed. Economic and trade rela-
tions serve precisely as the cornerstone of China-EU relations. The EU is China’s
No. 1 trading partner and was the largest export market for China for 8 consecutive
years, while in the last two or three years, the volume of China-EU trade has been
basically close to the EU-US volume of trade, and China may even surpass the
USA to become the EU’s No. 1 trading partner. Meanwhile, the EU is China’s
largest import source of technology, while China’s investments in the EU have also
surged in recent years. Development of economic and trade relations was driven by
itself naturally rather than by active response from senior policymakers on the two
sides. As a consequence, on the one hand, China-EU economic and trade frictions
have increasingly escalated in recent years, while on the other hand, the EU and the
USA have launched free trade area negotiations and the EU is more willing to
develop transatlantic relations; furthermore, China is not presented in the EU’s
global free trade area strategic arrangement and is intentionally cold-shouldered by
the EU.
There are more than 50 dialogue mechanisms at the working level between
China and the EU. So many dialogue mechanisms are available, but there is lack of
an early-warning mechanism for effectively controlling and addressing concerns
and frictions involving economic and trade issues between the two sides so that
when the photovoltaic dispute occurred between them, the Chinese Premier
expressed strong concern in person to the President of the European Commission
by telephone. Though such a move highlighted the Chinese government’s grave
concern about such a case of trade friction on the one hand, on the other hand, it
also uncovered the awkward situation amid many China-EU dialogue mechanisms:
(^32) OECD ( 2013 ).
3 China-EU Economic and Trade Relations 89