Communication from the Commission to the Council and the European Parliament - EU – China: Closer partners, growing responsibilities {COM(2006) 632 final}
Date: 2006-10-24
Institutions: European Commission
Subjects: China, EU relations, economic relations, environmental cooperation, migration policy, regional security, the EU's international role, trade relations

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 24.10.2006 
COM(2006) 631 final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 

EU – China: Closer partners, growing responsibilities 

{COM(2006) 632 final} 

EN 

   EN 

 
 
 
  
COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 

EU – China: Closer partners, growing responsibilities 

1. 

What is at stake? 

China has re-emerged as a major power in the last decade. It has become the world’s fourth 
economy  and  third  exporter,  but  also  an  increasingly  important  political  power.  China's 
economic  growth  has  thrown  weight  behind  a  significantly  more  active  and  sophisticated 
Chinese foreign policy. China’s desire to grow and seek a place in the world commensurate 
with its political and economic power is a central tenet of its policy. Given China’s size and 
phenomenal growth, these changes have a profound impact on global politics and trade. 

The  EU  offers  the  largest  market  in  the  world.  It  is  home  to  a  global  reserve  currency.  It 
enjoys world leadership in key technologies and skills. The EU plays a central role in finding 
sustainable solutions to today's challenges, on the environment, on energy, on globalisation. It 
has  proved  capable  of  exerting  a  progressive  influence  well  beyond  its  borders  and  is  the 
world’s largest provider of development aid.  

Europe needs to respond effectively to China’s renewed strength. To tackle the key challenges 
facing Europe today – including climate change, employment, migration, security – we need 
to leverage the potential of a dynamic relationship with China based on our values. We also 
have  an  interest  in  supporting  China’s  reform  process.  This  means  factoring  the  China 
dimension  into  the  full  range  of  EU  policies,  external  and  internal.  It  also  means  close  co-
ordination inside the EU to ensure an overall and coherent approach.  

To  better  reflect  the  importance  of  their  relations,  the  EU  and  China  agreed  a  strategic 
partnership  in  2003.  Some  differences  remain,  but  are  being  managed  effectively,  and 
relations are increasingly mature and realistic. At the same time China is, with the EU, closely 
bound  to  the  globalisation  process  and  becoming  more  integrated  into  the  international 
system.  

The  EU’s  fundamental  approach  to  China  must  remain  one  of  engagement  and  partnership. 
But  with  a  closer  strategic  partnership,  mutual  responsibilities  increase.  The  partnership 
should meet both sides’ interests and the EU and China need to work together as they assume 
more  active  and  responsible  international  roles,  supporting  and  contributing  to  a  strong  and 
effective  multilateral  system.  The  goal  should  be  a  situation  where  China  and  the  EU  can 
bring their respective strengths to bear to offer joint solutions to global problems. 

Both the EU and China stand to gain from our trade and economic partnership. If we are to 
recognise its full potential, closing Europe’s doors to Chinese competition is not the answer. 
But  to  build  and  maintain  political  support  for  openness  towards  China,  the  benefits  of 
engagement must be fully realised in Europe. China should open its own markets and ensure 
conditions  of  fair  market  competition.  Adjusting  to  the  competitive  challenge  and  driving  a 
fair bargain with China will be the central challenge of EU trade policy in the decade to come. 
This key bilateral challenge provides a litmus test for our partnership, and is set out in more 
detail in a trade policy paper entitled “Competition and Partnership” which accompanies the 
present Communication.  

EN 

2 

   EN 

 
Europe  and  China  can  do  more  to  promote  their  own  interests  together  than  they  will  ever 
achieve apart. 

2. 

Context: China’s revival 

Internal stability remains the key driver for Chinese policy. Over recent decades, stability has 
been underpinned by delivery of strong economic growth. Since 1980 China has enjoyed 9% 
annual average growth and has seen its share of world GDP expand tenfold to reach  5% of 
global  GDP.  China’s  growth  has  resulted  in  the  steepest  recorded  drop  in  poverty  in  world 
history, and the emergence of a large middle class, better educated and with rising purchasing 
power and choices.  

But  the  story  of  this  phenomenal  growth  masks  uncertainties  and  fragility.  The  Chinese 
leadership  treads  a  complex  daily  path,  facing  a  range  of  important  challenges,  primarily 
domestic, but which increasingly resonate beyond national boundaries:  

•  Disparities  continue  to  grow.  The  wealth  gap  is  significant  and  growing,  as  are  social, 
regional and gender imbalances; there is huge stress on healthcare and education systems; 
and China is already facing significant demographic shifts and the challenges of a rapidly 
ageing population; 

•  China’s demand for energy and raw materials – China is already the world’s second largest 
energy consumer – is already significant and will continue to grow; and the environmental 
cost  of  untrammelled  economic  and  industrial  growth  is  becoming  more  and  more 
apparent.  At  the  same  time  growth  patterns  have  not  been  balanced,  with  a  focus  on 
exports to the detriment of domestic demand. 

Growth remains central to China’s reform agenda, but increasingly is tempered with measures 
to address social inequality and ensure more sustainable economic and political development. 
Paradoxically, in a number of areas, the conditions for stability improve as the Party and State 
relax  control.  A  more  independent  judiciary,  a  stronger  civil  society,  a  freer  press  will 
ultimately  encourage  stability,  providing  necessary  checks  and  balances.  Recognition  of  the 
need  for  more  balanced  development,  building  a  “harmonious  society”,  is  encouraging.  But 
further reform will be necessary. 

China’s  regional  and  international  policy  also  supports  domestic  imperatives:  a  secure  and 
peaceful  neighbourhood  is  one  conducive  to  economic  growth;  and  China’s  wider 
international  engagement  remains  characterised  by  pursuit  of  very  specific  objectives, 
including securing the natural resources needed to power growth. At the same time we have 
seen China’s desire to build international respect and recognition. The 2008 Olympic Games 
in Beijing and the 2010 World Expo in Shanghai will focus the world’s attention on China’s 
progress.  

China has traditionally described its foreign policy as one of strict non-interference, but as it 
takes on a more active and assertive international role, this becomes increasingly untenable. 
The Chinese government is beginning to recognise this, and the international responsibilities 
commensurate  to  its  economic  importance  and  role  as  a  permanent  member  of  the  UN 
Security Council as illustrated by its increasingly active diplomatic commitments.  

The  EU  and  China  benefit  from  globalisation  and  share  common  interests  in  its  success.  It 
presents challenges to both and brings further responsibilities. We also share a desire to see an 

EN 

3 

   EN 

 
effective multilateral system. But there remain divergences in values, on which dialogue must 
continue. 

As  the  partnership  strengthens,  expectations  and  responsibilities  on  both  sides  increase.  As 
China’s  biggest  trading  partner,  EU  trade  policy  has  an  important  impact  on  China,  as  do 
China’s  policies  on  the  EU.  Increasingly,  both  sides  expect  that  impact  to  be  taken  into 
account in their partner’s policy formulation. 

3. 

The way forward 

The EU should continue support for China’s internal political and economic reform process, 
for a strong and stable China which fully respects fundamental rights and freedoms, protects 
minorities  and  guarantees  the  rule  of  law.  The  EU  will  reinforce  co-operation  to  ensure 
sustainable development, pursue a fair and robust trade policy and work to strengthen and add 
balance to bilateral relations. The EU and China should work together in support of peace and 
stability.  The  EU  should  increase  co-ordination  and  joint  action  and  improve  co-operation 
with European industry and civil society. 

Until now the legal basis for relations has been the 1985 Trade and Co-operation Agreement. 
This  no  longer  reflects  the  breadth  and  scope  of  the  relationship  and  at  the  9th  EU-China 
Summit  leaders  agreed  to  launch  negotiations  on  a  new,  extended  Partnership  and  Co-
operation  Agreement  (PCA)  to  update  the  basis  for  our  co-operation.  This  new  agreement 
presents an important opportunity. It will provide a single framework covering the full range 
and  complexity  of  our  relationship,  and  at  the  same  time  should  be  forward-looking  and 
reflect the priorities outlined in this Communication.  

3.1. 

Supporting China’s transition towards a more open and plural society 

The Chinese leadership has repeatedly stated its support for reform, including on basic rights 
and freedoms. But in this area progress on the ground has been limited. The EU must consider 
how  it  can  most  effectively  assist  China’s  reform  process,  making  the  case  that  better 
protection of human rights, a more open society, and more accountable government would be 
beneficial to China, and essential for continued economic growth.  

Democracy, human rights and the promotion of common values remain fundamental tenets of 
EU  policy  and  of  central  importance  to  bilateral  relations.  The  EU  should  support  and 
encourage the development of a full, healthy and independent civil society in China. It should 
support efforts to strengthen the rule of law - an essential basis for all other reform.  

At the same time, the EU will continue  to  encourage full respect  of fundamental rights  and 
freedoms in all regions of China; freedom of speech, religion and association, the right to a 
fair trial and the protection of minorities call for particular attention – in all regions of China. 
The  EU  will  also  encourage  China  to  be  an  active  and  constructive  partner  in  the  Human 
Rights  Council,  holding  China  to  the  values  which  the  UN  embraces,  including  the 
International Covenant on Civil and Political Rights. 

The  twice-yearly  human  rights  dialogue  was  conceived  at  an  earlier  stage  in  EU-China 
relations. It remains fit for purpose, but the EU’s expectations – which have increased in line 
with the quality of our partnership – are increasingly not being met. The dialogue should be: 

•  more focussed and results-oriented, with higher quality exchanges and concrete results;  

EN 

4 

   EN 

 
•  more flexible, taking on input from separate seminars and sub-groups; 

•  better co-ordinated with Member State dialogues. 

3.2. 

Sustainable development 

One of today’s key global challenges is to ensure our development is sustainable. China will 
be  central  to  meeting  this  challenge.  China’s  domestic  reform  policy  is  important  and  the 
Commission  will  continue  to  support  this  through  its  co-operation  programme,  including 
corporate social responsibility. On issues such as energy, the environment and climate change, 
respect  for  international  social  standards,  development  assistance,  as  well  as  wider 
macroeconomic issues, the EU and China should ensure close international co-operation. Both 
sides should: 

Ensure  secure  and  sustainable  energy  supplies.  As  important  players  in  world  energy 
markets, the EU and China share a common interest and responsibility in ensuring the security 
and sustainability of energy supplies, improving efficiency and mitigating the environmental 
impact of energy production and consumption. The EU’s priority should be to ensure China’s 
integration  into  world  energy  markets  and  multilateral  governance  mechanisms  and 
institutions, and to encourage China to become an active and responsible energy partner. On 
that basis both sides should work together to: 

•  increase  international  co-operation,  in  particular  efforts  to  improve  transparency  and 
reliability  of  energy  data  and  the  exchange  of  information  aimed  at  improving  energy 
security in developing countries, including Africa; 

•  strengthen China's technical and regulatory expertise, reducing growth in energy demand, 
increasing energy efficiency and use of clean renewable energy such as wind, biomass and 
bio  fuels,  promoting  energy  standards  and  savings  through  the  development  and 
deployment of near zero emission coal technology; 

•  commit  to  enhance  stability  through  a  market-based  approach  to  investment  and 
procurement;  dialogue  with  other  major  consumers;  encouragement  of  transparent  and 
non-discriminatory  regulatory  frameworks,  including  open  and  effective  energy  market 
access; and by promoting the adoption of internationally recognised norms and standards. 

Combat climate change and improve the environment. We already have a good basis for 
co-operation on environment issues and on climate change through the Partnership established 
at the 2005 EU-China Summit.  

•  The  EU  should  share  regulatory  expertise,  working  with  China  to  prevent  pollution, 
safeguard biodiversity, make the use of energy, water and raw materials more efficient, and 
improve transparency and the enforcement of environmental legislation. Both sides should 
work  together  to  tackle  deforestation  and  illegal  logging,  sustainable  management  of 
fisheries resources and maritime governance; 

•  Both  sides  should  build  on  the  Climate  Change  Partnership,  reinforcing  bilateral  co-
operation,  and  strengthening  international  co-operation,  meeting  shared  international 
responsibilities  under  the  Climate  Change  Convention  and  Kyoto  Protocol  and  engage 
actively  in  the  dialogues  on  international  climate  change  co-operation  post-2012.  We 
should strengthen the use of emissions trading and clean development mechanisms. 

EN 

5 

   EN 

 
Improve exchanges on employment and social issues. China is committed to tackle social 
disparities and promote more balanced development. The EU and China should: 

•  intensify co-operation on employment and social issues reinforcing and expanding bilateral 
dialogue  to  include  issues  such  as  health  and  safety  at  work,  decent  work  standards,  and 
meeting the challenges of an ageing population;  

•  work  together  to  ensure  that  international  commitments  on  labour  and  social  issues  are 

upheld. 

Improve co-ordination on international development. Closer co-operation on international 
development issues would benefit the EU, China and partners in the developing world. There 
are significant downsides if we are not able to co-ordinate effectively, particularly in Africa 
but also in other developing countries. The EU and China should:  

•  engage  in  a  structured  dialogue  on  Africa's  sustainable  development.  There  should  be 
transparency  on  the  activity  and  priorities  of  both  sides,  providing  a  basis  for  full 
discussion; 

•  support regional efforts to improve governance in Africa; 

•  explore  opportunities  for  improving  China’s  integration  into  international  efforts  to 
improve aid efficiency, co-ordination and opportunities for practical bilateral co-operation 
on the ground. 

Build sustainable economic growth. China has become a source growth for the EU and the 
world,  but  China's  current  growth  model  is  also  the  source  of  important  imbalances  in  EU-
China  trade.  The  Chinese  government  has  recognised  the  importance  of  meeting  macro 
economic  challenges,  of  forward-looking  fiscal,  monetary  and  structural  policies,  boosting 
consumption  and  reducing  inequalities.  Increasing  exchange  rate  flexibility  will  be  an 
important factor, helping rebalance growth towards domestic demand and increasing Chinese 
households' purchasing power. Policies which would lead to a reduction of its current account 
surplus would increase China’s control of its economy and contain risks of overheating, and at 
the  same  time  meet  China’s  shared  responsibility  to  ensure  a  stable  and  balanced  world 
economy. 

As  key  economic  powers,  the  EU  and  China  should  further  develop  their  partnership  and 
work together to tackle global economic issues; they should: 

•  deepen  co-operation  and  share  experience  in  formulating  and  implementing  monetary, 

fiscal, financial, exchange rate and structural policies; 

•  co-operate towards the orderly unwinding of global imbalances; 

•  strengthen and upgrade their macro-economic dialogue. 

3.3. 

Trade and economic relations 

China's integration into the global trading system has benefited both Europe and China. The 
EU is China’s largest trading partner, representing more than 19% of China’s external trade. 
European companies trading with and investing in China have contributed to China’s growth, 

EN 

6 

   EN 

 
bringing  capital  goods,  knowledge  and  technology  that  have  been  instrumental  to  China's 
development. 

An economically strong China is in Europe’s interest. China, especially its rapidly increasing 
middle  class,  is  a  growing  market  for  EU  exports.  EU  exports  to  China  increased  by  over 
100%  between  2000  and  2005,  much  faster  than  its  exports  to  the  rest  of  the  world.  EU 
exports of services to China expanded six-fold in the ten years to 2004. European companies 
and  consumers  benefit  from  competitively  priced  Chinese  inputs  and  consumer  goods. 
Openness brings benefits to both China and the EU. 

Nevertheless,  in  Europe  there  is  a  growing  perception  that  China’s  as  yet  incomplete 
implementation  of  WTO  obligations  and  new  barriers  to  market  access  are  preventing  a 
genuinely reciprocal trading relationship. Imports from China have added to pressure to adjust 
to globalisation in Europe. This trend is likely to continue as China moves up the value chain. 

For  the  relationship  to  be  politically  and  economically  sustainable  in  the  long  term,  Europe 
should  continue  to  offer  open  and  fair  access  to  China's  exports  and  to  adjust  to  the 
competitive  challenge.  The  EU  needs  to  develop  and  consolidate  areas  of  comparative 
advantage  in  high-value  and  high-tech  design  and  production  and  to  help  workers  retrain. 
China  for  its  part  should  reciprocate  by  strengthening  its  commitment  to  open  markets  and 
fair competition. Both sides should address concern over the impact of economic growth on 
natural resources and the environment. The EU will: 

Insist  on  openness.  The  EU  will  continue  working  with  China  towards  the  full 
implementation  of  its  WTO  obligations  and.  will  urge  China  to  move  beyond  its  WTO 
commitments in further opening its market to create opportunities for EU companies. The EU 
will accept that it cannot demand openness from China from behind barriers of its own. The 
EU  will  urge  China  to  honour  its  commitment  to  open  accession  negotiations  on  the 
Government  Procurement  Agreement  in  2008  and  work  to  bring  them  to  a  successful 
conclusion as rapidly as possible. 

Level the playing field. Better protection of intellectual property rights in China and ending 
forced technology transfers are EU priorities, including through implementation by China of 
WTO obligations and will help create a better investment climate in China. The EU will press 
China  to  stop  granting  prohibited  subsidies  and  reform  its  banking  system,  and  encourage 
China to allow market forces to operate in its trade in raw materials. 

Support  European  companies.  The  Commission  will  make  a  major  effort  to  assist 
companies doing business with China, in particular small and medium sized enterprises while 
urging them to respect decent work standards. The EU will extend and strengthen the existing 
information,  training  and  advice  on  protecting  and  defending  IPR  in  China.  A  European 
Centre  in  Beijing  should  be  opened.  The  EU-China  Managers  Exchange  and  Training 
Programme should be extended. 

Defend the EU's interests: dialogue first. The EU has a clear preference for resolving trade 
irritants  with  China  through  dialogue  and  negotiation.  The  existing  EU-China  trade  related 
dialogues should be strengthened at all levels, their focus should be sharpened on facilitating 
trade and improving market access and their scope extended. The EU and China also have an 
interest in joining their efforts in international rule making and global standard setting bodies. 
The  EU  will  actively  pursue  global  supervisory  and  regulatory  solutions,  promoting  open 
markets and regulatory convergence, and build on co-operation with China through EU-China 

EN 

7 

   EN 

 
regulatory  dialogues.  This  will  also  help  to  ensure  compliance  of  Chinese  imports  with  EU 
standards for food and non-food products. 

But  where  other  efforts  have  failed,  the  Commission  will  use  the  WTO  dispute  settlement 
system to ensure compliance with multilaterally agreed rules and obligations. Trade defence 
measures  will  remain  an  instrument  to  ensure  fair  conditions  of  trade.  The  EU  is  actively 
working with China with a view to creating the conditions which would permit early granting 
of  MES.  Recent  progress  has  been  made  on  some  of  the  conditions.  The  Commission  will 
continue  to  work  with  the  Chinese  authorities  through  the  mechanisms  we  have  established 
and will be ready to act quickly once all the conditions are met. 

Build a stronger relationship. A key objective of the negotiations for a new Partnership and 
Cooperation Agreement, which will also update the 1985 Trade and Co-operation Agreement, 
will  be  better  access  to  the  Chinese  market  for  European  exporters  and  investors,  going 
beyond WTO commitments, better protection of intellectual property and mutual recognition 
of geographical indications. China is already a major beneficiary of the international trading 
system  and  should  assume  a  responsibility  commensurate  with  those  benefits,  making  a 
substantial contribution to reviving and completing the WTO Doha Round.  

Many of these steps are not only in EU’s interest. They are strongly in China's interest and an 
integral  part  of  China's  progress  towards  balanced  and  sustainable  growth  and  development 
and  global  leadership  and  responsibility.  The  accompanying  trade  policy  paper  sets  out  a 
comprehensive approach to EU-China trade and investment relations for the medium term. 

3.4. 

Strengthening bilateral co-operation 

Bilateral  co-operation  spans  a  wide  range  of  issues,  including  7  formal  Agreements,  22 
sectoral  dialogues,  covering  diverse  and  important  issues  from  aviation  and  maritime 
transport  to  regional  and  macro-economic  policy.  Further  development  of  the  structured 
dialogue to exchange experiences and views on competition matters, as well as technical and 
capacity-building  assistance  as  regards  competition  enforcement,  remains  important.  Co-
operation has been successful and positive. But more must be done to focus co-operation and 
ensure  balance  and  mutual  benefit,  in  all  areas,  but  particularly  on  flagship  areas  such  as 
science  and  technology  co-operation.  More  should  be  done  to  strengthen  co-operation  on 
migration  issues,  people-to-people  links,  and  the  structures  governing  our  official  relations. 
Both sides should: 

Ensure  quality  and  increased  co-operation  in  science  and  technology.  Science  and 
technology co-operation is a priority area for the Chinese government. China spends 1.5% of 
its  GDP  on  a  dynamic  and  growing  research  and  development  programme.  Bilateral  co-
operation  is  also  strong:  China  is  one  of  the  most  important  third  countries  participating  in 
more EU research projects under the 6th Research Framework Programme, giving it access to 
600 million euros of research, and China is an important partner on key projects such as ITER 
and Galileo. EU participation in Chinese programmes should be increased.  

The Joint Declaration from the Science and Technology Forum in May 2005 set the context 
for  taking  co-operation  forward,  based  on  mutual  benefit  and  reciprocal  access  and 
participation. Both sides should: 

•  consolidate and improve the visibility of co-operation. This will allow both sides to focus 
and set priorities effectively and to respond to dynamic issues such as emerging pandemics 

EN 

8 

   EN 

 
or  work  on  clean  energy  technologies;  make  it  easier  to  examine  scope  for  increased 
reciprocity; and provide a basis for more effective co-ordination with Member States;  

•  improve  joint  planning  to  ensure  mutual  benefit,  and  increase  flexibility  to  fund  the 
participation of European researchers in Chinese research programmes. Both sides should 
facilitate  researchers’  mobility  which  in  the  case  of  the  EU  is  promoted  through  specific 
grants under the Framework Programme. 

Build  an  effective  migration  relationship.  Chinese  and  other  migrants  enrich  the  EU 
culturally  and  bring  with  them  important  skills  and  expertise.  But  there  is  a  significant 
downside  if  the  process  is  not  managed  effectively.  There  has  to  be  an  effective  legal 
framework  to  facilitate  people-to-people  exchanges.  But  we  need  effective  mechanisms  to 
deal  with  those  who  abuse  the  system,  with  a  focus  on  prevention  and  return.  Both  sides 
should work towards the early conclusion of an effective Readmission Agreement.  

•  The existing consultation mechanism should continue and be extended to cover both legal 

and illegal migration, and with renewed political commitment to make progress; 

•  Both  sides  should  agree  and  push  forward  specific  co-operation  projects  on  e.g.  the 
exchange of officials and training; and there should be exchanges on biometric technology; 

•  There  should  be  a  dedicated  dialogue  with  the  Ministry  of  Public  Security  covering 

migration and the fight against organised crime, terrorism and corruption; 

•  The EU-China Tourism Agreement (ADS) will need continued proactive and practical co-

operation to ensure it functions effectively. 

Expand  people-to-people  links.  We  should  strengthen  the  full  range  of  people-to-people 
links  which  underpin  our  relations  through  significant  and  sustained  action  on  both  sides, 
from cultural exchanges and tourism to civil society and academic links. 

•  Civil society and institutional links should provide direct support and impetus for political 
and trade relations. Both sides should facilitate direct links between civil society groups in 
the  EU  and  China  in  all  areas,  and  include  them  in  sectoral  dialogues  where  possible. 
Official  non-governmental  links  should  be  strengthened  and  expanded.  The  European 
Parliament plays a central role and should expand co-operation with the Chinese National 
People’s  Congress.  The  EU  should  also  strengthen  links  between  ECOSOC  and  the 
Chinese Economic and Social Committee, political parties, and between other semi-official 
bodies. 

•  Education has been an area of particular success, with 170 000 Chinese students studying 
in  the  EU  in  2005.  We  should  continue  to  build  on  existing  co-operation  through 
programmes run by individual Member States and through the China-specific strand of the 
Erasmus Mundus programme. There have been positive examples of work to set up joint 
degree courses and joint campuses. We should also implement specific projects such as a 
European  Law  School.  Both  sides  will  continue  to  encourage  EU  students  to  study  in 
China.  To  strengthen  language  capability,  the  Commission  will  support  a  specific 
programme to train Chinese language teachers to teach in Europe.  

•  Academic  expertise  in  the  EU  on  China  needs  to  be  improved  and  co-ordinated  more 
effectively.  Action  is  needed  by  both  sides  to  support  effective  interaction  between 

EN 

9 

   EN 

 
European and Chinese academia. The Commission should continue to support an academic 
network  on  China,  drawing  together  academic  expertise  to  inform  EU  policy  and  co-
ordinating  information-sharing  within  the  academic  community;  and  there  should  be  a 
small number of prestigious professorships on Chinese studies created and made available 
to European universities. There should be a permanent regular dialogue between European 
and Chinese think tanks. 

Make bilateral structures more effective. Both sides should reflect on the structures which 
govern relations and consider whether they should be streamlined, improved or upgraded. The 
Commission’s  2003  Policy  Paper  sought  to  expand  sectoral  dialogue  between  the  EU  and 
China. This has been very successful, and the majority function well and make an important 
contribution  to  our  partnership.  But  progress  should  be  reviewed.  Both  sides  should  also 
consider whether there are new bodies or mechanisms which would further contribute to EU-
China relations.  

•  Annual  Summits  provide  a  good  framework  for  maintaining  contacts  at  head  of 
government  level.  This  should  be  supported  by  regular  cross-cutting  exchange  and 
dialogue  at  technical,  ministerial  and  more  senior  level.  In  addition,  both  sides  should 
explore further options for flexible and informal opportunities to meet and exchange views;  

•  The  recently  agreed  strategic  dialogue  at  Vice  Foreign  Minister  level  should  be  a  key 
mechanism covering regional and geo-political issues and adding focus, impact and value 
to the relationship; 

•  Both sides should undertake a thorough examination of the rationale, interrelationship and 
performance of the sectoral dialogues with the aim of maximising synergies and ensuring 
mutual  benefit,  and  ensure  interested  stakeholders  are  involved  where  possible.  The 
Commission will produce a series of Working Documents on specific sectoral challenges; 

•  A new independent EU-China Forum should be set up. On the EU side it should be at arms 
length  from  the  institutions  and  should  draw  on  civil  society,  academic,  business  and 
cultural  expertise,  providing  policy  input  to  political  leaders  and  impetus  to  bilateral 
relations. 

The  EU  should  ensure  that  it  speaks  with  one  voice  on  the  panoply  of  issues  related  to  its 
relations  with  China.  Given  the  complexity  of  the  relationship  and  the  importance  of 
continuity, regular, systematic and cross-cutting internal co-ordination will be essential.  

The  EU’s  co-operation  programme,  delivered through  the  country  strategy  paper  (CSP)  and 
national indicative programmes, should continue to play a role in supporting the partnership 
between the two sides and China’s reform process. But as China moves further away from the 
status  of  a  typical  recipient  of  overseas  development  aid,  the  EU  must  calibrate  its  co-
operation programme carefully and keep it under review. Co-operation must be in both sides’ 
interests, reflect the EU’s own principles and values, and serve to underpin the partnership.  

3.5. 

International and regional co-operation 

The EU and China have an interest in promoting peace and security through a reformed and 
effective  multilateral  system.  They  should  co-operate  closely  in  the  framework  of  the  UN, 
working  to  find  multilateral  solutions  to  emerging  crises,  and  to  combat  terrorism  and 
increase regional co-operation, including through involvement by both in emerging regional 

EN 

10 

   EN 

 
structures. This common interest, in strong multilateralism, peace and security should also be 
reflected in closer co-operation and more structured dialogue on the Middle East, Africa and 
East Asia, and on cross-cutting challenges such as non-proliferation. 

East Asia. It is clear the EU has a significant interest in the strategic security situation in East 
Asia. It should build on the increasing effectiveness of its foreign and security policy and its 
strategic interest in the region by drawing up public guidelines for its policy.  

China has a key role to play in the region and has been working to improve relations with its 
neighbours,  including  Russia  and  India,  and  with  central  Asia  through  the  Shanghai  Co-
operation Organisation. But there remains scope for improvement in Sino-Japanese relations. 
The EU has an interest in strong relations between the region's major players and in continued 
regional integration.  

Taiwan. The EU has a significant stake in the maintenance of cross-straits peace and stability. 
On the basis of its One China Policy, and taking account of the strategic balance in the region, 
the EU should continue to take an active interest, and to make its views known to both sides. 
Policy should take account of the EU’s: 

•  opposition to any measure which would amount to a unilateral change of the status quo; 

•  strong opposition to the use of force; 

•  encouragement for pragmatic solutions and confidence building measures; 

•  support for dialogue between all parties; and, 

•  continuing strong economic and trade links with Taiwan. 

Transparency  on  Chinese  military  expenditure  and  objectives.  There  is  increasing 
concern  caused  by  the  opacity  of  China’s  defence  expenditure.  As  expenditure  continues  to 
increase,  China  needs  to  be  convinced  of  the  importance  of  improving  transparency.  At  the 
same time, the EU should improve its analytical capacity on China’s military development. 

Arms  embargo.  The  arms  embargo  was  put  in  place  as  a  result  of  events  in  Tiananmen 
Square  in  1989.  The  EU  has  agreed  to  continue  to  work  towards  embargo  lift,  but  further 
work will be necessary by both sides:  

•  Current  and  incoming  Presidencies  should  finalise  technical  preparations  to  ensure  lift 
would  not  lead  to  a  qualitative  or  quantitative  increase  in  arms  sales,  and  continue  to 
explore possibilities for building a consensus for lift. The EU should work with China to 
improve  the  atmosphere  for  lift,  making  progress  on  China’s  human  rights  situation; 
working  to  improve  cross-straits  relations;  and  by  improving  the  transparency  of  its 
military expenditure. 

Non-proliferation.  Non-proliferation  represents  a  key  area  for  the  strategic  partnership. 
International and bilateral co-operation is based on UNSCR 1540 and the Joint Declaration on 
Non-Proliferation  agreed  at  the  2004  EU-China  Summit.  The  EU  is  supportive  of  China’s 
central role in work on the Korean peninsula and continued Chinese support will be crucial to 
progress on the Iranian nuclear issue. There has been a good start on dialogue and practical 

EN 

11 

   EN 

 
co-operation to strengthen and enforce export controls. The EU should build on this, working 
with Chinese officials to encourage China to: 

•  comply with all non-proliferation and disarmament treaties and international instruments, 

and to promote compliance with them regionally and internationally; 

•  strengthen export controls of WMD-related materials, equipment and technologies as well 

as of conventional weapons and small arms and light weapons.  

Both sides should work together to share practical experience in implementing and enforcing 
export  controls,  including  through  training  for  Chinese  customs  officials.  They  should 
consider scope for joint EU/Asia initiatives in the context of the ASEAN Regional Forum. 

4. 

Conclusion 

China  is  one  the  EU’s  most  important  partners.  China’s  re-emergence  is  a  welcome 
phenomenon.  But  to  respond  positively  and  effectively,  the  EU  must  improve  policy  co-
ordination at all levels, and ensure a focussed single European voice on key issues.  

We have a strong and growing bilateral relationship. But we must continue build on this. The 
recommendations  in  this  Communication,  which  the  Council  is  invited  to  endorse  and 
complement  through  Council  Conclusions,  represent  a  challenging  agenda  for  the  EU  to  do 
so,  and  the  Partnership  and  Co-operation  Agreement  provides  an  important  practical 
mechanism to move this agenda forward.  

A  closer,  stronger  strategic  partnership  is  in  the  EU’s  and  China’s  interests.  But  with  this 
comes  an  increase  in  responsibilities,  and  a  need  for  openness  which  will  require  concerted 
action by both sides. 

EN 

12 

   EN