The Limits of Economic Interdependence: The Case of the European Union and China

Abstract

China's rapid economic growth and integration into the global economies have largely significant economic impacts and political implications for the EU. Since China's accession to the World Trade Organization (WTO), the flows of trade have expanded substantially. Building on long-existing relations, the EU has established links with China since the 1970s. Over the past decades, the relationship between China and the EU has thus evolved into comprehensive strategic partnership. Both parties have employed several strategies such as summit diplomacy, bilateral approaches, multilateral cooperation, policy papers to improve ties and overcome growing concerns. Economic interests have remained primary.After an overview of the historical evolution of political relations, this paper considers the three main motives which may drive China to provide economic relations with the EU, such as granting the market economy status, the needs of the foreign direct investments (FDI), growth in the volume of trade. The last part of the paper examines the interests and dilemmas of the China-EU economic relationship using the neoliberal theory of international politics as a framework for analysis. With this last point in mind, this paper attempts to analyse the relationship between interdependence and conflict with case studies.