In the early stages of China's reform and opening up, China adopted policies to open markets for developed European countries in return for advanced technology. The rapid development of the German automobile sector in the Chinese market is a typical example of previous Sino-European economic relations. However, the Chinese economy needs to follow an innovative development road through industrial upgrading and restructuring. The transformation of Chinese products to the high end of the value chain has presented new challenges for the Sino-European economic relations.

In recent years, Europe has felt increasing competition from China. Also, the debt crisis has damaged its sense of superiority. The voice of protectionism is rising within Europe, putting pressure on the governments of European countries. Far-sighted European observers, however, pointed out that Europe faces a structural problem: The rising cost of its own economy has led to the decline of its competitiveness. Therefore, they advocate innovation and the adjustment of the European economy rather than resorting to protectionism. Their views accord with China's policy of boosting win-win economic cooperation with Europe.

Also, research on the synergy of China's 12th Five-Year Plan (2011-15) and the Europe 2020 development strategy has shown that the two sides' enhancing coordination on macroeconomic policies could raise economic and trade relations to a new high.

"When 'designed in Europe' is combined with 'made in China' and when European technologies are applied in the Chinese market, there will be amazing results," said Chinese Vice Premier Li Keqiang during his recent trip to Europe. As long as Europe persists with technological innovation, Sino-European economic relations will continue to advance.

Comprehensive relations

It seems that the European public has not fully prepared for changing Sino-EU relations. Sensational public claims that China will buy out Europe are occasionally heard. Thus a healthy Sino-EU relationship relies on not only governmental consensus, but also sup- port from people of both sides. To this end, the two sides launched a high-level dialogue mechanism for social and cultural exchanges in April, trying to build a "third pillar" for strengthening relations in addition to the strategic and economic dialogues. All this shows that China's Europe policy is not based on short-term benefits, but on long-term common interests of both sides.

Europe is a unique actor in the international community. Apart from sovereign states, Europe has a highly integrated regional organization—the EU, which is made up of 27 developed economies. There are not only big world powers such as Britain, France and Germany, but also small and medium-sized countries. There are well-off countries with relatively sound institutions as well as less prosperous countries still undergoing social and economic transition. China has kept a balanced relationship with European countries with different development levels and in different parts of Europe.

Against the backdrop of the EU debt crisis, Europe displays a more complicated diversity. Therefore, a more systematic and balanced European policy is needed when China is enhancing its European investment and market integration. The frequent visits of high-level Chinese officials to European countries in recent months with the aim of increasing political, economic and cultural exchanges are a demonstration of China's balanced Europe policy.

No matter who will dominate China's Europe policy, cooperation and common development will be the theme of Sino- European relations, a positive signal that China has sent to Europe since the European debt crisis. In the changing world today, working together for common development should be the mainstream of the international community. Good relations among major international actors could help stabilize complicated international relations. With a shared commitment to development and a multipolar world, China and Europe appear poised to set an example for international cooperation in the 21st century.

The author is a research fellow with the China Institute of International Studies

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