The fiftieth anniversary of formal ties between the European Union and China has highlighted the differences between the two on fundamental security and trade issues.
At a late July summit celebrating the anniversary, the EU asked China to stop supporting Russia’s invasion of Ukraine and stop flooding European markets with subsidized exports. China said no.
Bridging those differences would require either that the EU capitulate and accept huge damage to its security and economic interests or that China change its relationship with Russia and its overall economic and trade policy.
Neither is impossible, but neither seems likely for the foreseeable future.
The history
In 1975, the six-member European Community (the EU’s predecessor) decided to establish diplomatic relations with the People’s Republic of China.
By then, the EC’s two largest member countries, France and Germany, had already established bilateral diplomatic relations with China.
France hoped that China, like Europe, would become a pillar of a multipolar world order subservient to neither the United States nor the Soviet Union.
Germany hoped that, because of Mao Zedong’s split with the Soviet Union, China could help check Soviet aggression.
All of Europe hoped that China could become a major market for European business.
Realizing the trade dream
As China transformed its economy, and after its accession to the World Trade Organization, economic ties between the EU and China grew exponentially.
Before 1975, during the years of Mao’s planned economy, the 27 current members of the EU had virtually no trade with or investment in China. That began to change in the 1990s. Mao’s successor, Deng Xiaoping, launched economic reform and opening, and began shifting China to an economic model of export-led economic growth supported by foreign investment.
Subsequently, China’s increasing prosperity, huge market and large labor force made it a magnet for European businesses. By the 2020s, China had become the EU’s second-largest foreign trading partner, trailing only the United States. By 2024, two-way trade between the EU member countries and China topped $700 billion, and European companies had by that year invested over $200 billion in China.
Over time, however, the bilateral trade balance tilted towards China.
In 2024, China exported over $300 billion more to the EU than it imported. Over the previous five years, China’s trade surplus with the EU had doubled.
China’s industrial policies created domestic overcapacity in key industries such as electric vehicles and carbon-free energy, while European investors found it increasingly difficult to operate in China.
Overcapacity combined with China’s export-led model of growth led to prices so low that in many sectors European products could not compete in China, in their own countries, or in third-country markets.
Security concerns
Changes in the EU’s economic relations with China over the past 50 years moved within the context of broader geopolitical changes.
With the collapse of the Soviet Union in 1991, most of Europe felt there was no longer any external threat to Europe’s peace and prosperity.
China’s leaders, on the other hand, feared that a fate like the Soviet Union’s could befall China and began massively increasing military spending.
As China became a wealthier and more militarily powerful country, tensions with the EU periodically flared over human rights or specific Chinese actions. Increasing Chinese aggressiveness against Taiwan, in the South China Sea and elsewhere led to fears that China was beginning to represent a threat to global peace and stability.
By 2019, the EU was describing China as a “cooperation partner, economic competitor and systemic rival.”
Russia’s Ukraine invasion
Then, in 2023, Russia invaded Ukraine. For the first time in over a generation, Europe faced a clear and present security threat. Subsequently, the 2024 U.S. election led some to doubt the new US administration’s commitment to the defense of Europe.
Meanwhile, while China professed neutrality in the Ukraine conflict, it had become the chief enabler of the Russian war machine.
By 2025, China was purchasing nearly half of Russia’s crude oil exports. In addition to providing the funding Moscow needed to continue the war, China was also providing four-fifths of the “critical electronics” used in Russian drones, according to Ukrainian intelligence.
In a meeting with the EU’s chief foreign affairs official in July 2025, Chinese Foreign Minister Wang Yi stripped away any doubts about China’s position on the war when he said that Beijing “could not accept Russia losing its war against Ukraine as this could allow the United States to turn its full attention to China.”
The summit: A dialogue of the deaf
Against this backdrop, no one expected much from the July 25 summit meant to mark the 50th anniversary of EU-PRC relations. And nothing is what the summit delivered.
The summit had originally been scheduled to take place in Brussels, but China insisted it be held in Beijing. China also cut the originally scheduled two days of meetings to one day.
During the summit, the EU president stressed that the EU relationship with China was “at an inflection point”: There needed to be progress on European concerns over China flooding European markets with the fruits of subsidized overcapacity as well as a decrease in Chinese support for Russia’s war in Ukraine.
Xi Jinping responded, “The current challenges facing Europe do not come from China.”
The only concrete outcome of the summit was a commitment by both parties to continue cooperation on climate change.
Future prospects for EU-China relations
Relations between the EU and China are clearly trending downward. The EU believes Russian aggression represents an existential threat to its member countries, while China appears determined to feed the Russian war machine.
Several factors could, however, push against that downward drift.
EU member countries benefitting the most from trade with or investment from China – for example, Hungary and Slovakia – will push against damaging EU ties with Beijing. (Slovakia was the only EU member to attend China’s massive celebration of the defeat of Japan in World War 2.)
Another factor: China has previously cut off exports to Europe of rare earths or other items critical to supply chains. Broad or sustained action of that sort could cripple much of Europe’s industrial production. Threats of such action could soften support within the EU for tougher policies toward China.
Ultimately, so long as the Russian war against Ukraine continues and so long as China remains determined to export its overcapacity in manufactured goods, it is hard to see how the EU’s relations with China will move in a more positive direction.
What could the EU do?
In the coming months and years, the EU will need to strengthen and accelerate steps to insulate its market from a flood of subsidized Chinese exports while at the same time decreasing its dependence on China for critical raw materials.
The former would require tough decisions that would doubtless lead to Chinese retaliation. To minimize that retaliation, the EU has already begun taking steps to decrease dependence on China for critical raw materials including through working within the 14-member Minerals Security Partnership.The MSP, whose members include the US, Canada, Japan and South Korea, enhances cooperation among its members to de-risk critical raw material supply chains.
Getting China to decrease its support for Putin’s war in Ukraine would be harder for the EU than getting China to stop flooding EU markets with subsidized products. Continued strong EU political and financial support for Ukraine will be essential but unlikely on its own to alter Chinese attitudes or actions.
Together, however the EU and the United States represent two of the three largest export markets for China. (The third is ASEAN, with many Chinese exports there destined ultimately for the US market.) If the EU and the US were to work together on a strong sanctions package, particularly one that also imposed sanctions when Chinese goods were transshipped through third countries, such a package might influence Chinese thinking on support for the Russian war machine.
Ambassador (ret.) James Moriarty (james.moriarty@pacforum.org) is senior advisor at Pacific Forum. During a 36-year career as a US diplomat, he served as special assistant to the president for the Indo-Pacific region and as an ambassador in South Asia. He lived and worked five years in China and five years in Taiwan. After retiring he served for seven years as chairman of the American Institute in Taiwan.
