China-Europe Relations Undergo Comprehensive Upgrade

Fourth, China and the EU should enhance financial and monetary cooperation and maintain the stability of the Euro while accelerating internationalization of the Renminbi. European integration is challenged by the Euro debt crisis. Consistently supportive of the Euro and European integration, China has pledged US $43 billion to the IMF and has helped the EU through difficult times by purchasing bonds and increasing imports. A significant development also took place recently in China-EU monetary cooperation. On October 10, 2013, the People’s Bank of China (PBOC) and the European Central Bank signed a three-year RMB 350 billion/€45 billion currency swap agreement which is extendable if both parties are agreeable. The deal aims to support bilateral trade, protect financial stability and speed up internationalization of the Renminbi.

Last but not least, China and the EU should promote cooperation in global governance and stand up for the right to speak on world governance. Nuclear proliferation, terrorism, maritime piracy and international conflicts all menace world security. It is vital, therefore, for China and Europe to enhance cooperation on security issues. The two parties are moreover expected to exchange opinions on key global issues such as climate change, Internet security, arms control and nonproliferation, so gaining more speaking rights on global governance and shaping a new international political and economic order that is fair and rational.

Global Influence

In the long run, a comprehensive upgrade of China-Europe cooperation will reveal a global influence. The EU and China are the world’s first and third largest economies. The sum of these two economies’ economic aggregate takes up one third that of the world. At the same time, the two parties command a tremendous trade volume. In 2011, China’s imports accounted for 16.4 percent of gross world imports and 15.4 percent of world exports, and the EU for 11.9 percent of gross world imports and 13.4 percent of world exports. Improving trade relations between China and the EU thus benefits the economic growth and upturn of both and also accelerates the world’s economic recovery.

From the standpoint of politics, the EU is the biggest group of developed countries, and one of the major forces in a multi-polarized world. China hence expects the EU to be strong, prosperous and united. China-EU cooperation in global and regional affairs will undoubtedly promote development of world multi-polarization and the shaping of a new international political and economic order that is fair and rational.

With regard to global governance, coordination and cooperation in the fields of climate change, anti-terrorism, energy and food security, as well as global financial reform, will win both parties more speaking rights within global governance – an achievement which is at the same time in the interests of world peace, stability and development.

LI GANG is a PhD in economics at the Institute of European Studies of the Chinese Academy of Social Sciences (CASS).