The China-Europe freight rail service network expanded rapidly in the following years. As of late October this year, 82 routes had been established, reaching 204 cities in 24 countries. These routes had handled 62,000 trips, transporting 5.76 million 20-foot equivalent units (TEUs) of containers of goods, according to China's statistics.

The rising demand for rail freight is reflective of the economic partnership between China and the European bloc, which has been booming since 1975 when China established diplomatic relations with the European Economic Community, a precursor to the EU. In 2021, bilateral trade surged to $828 billion, up 27.5 percent over the previous year despite the COVID-19 pandemic. China is the EU's largest and the EU is China's second largest trading partner.

Noting that China and the EU are two major forces for world peace, two major markets for common development and two major civilizations for human progress, Chinese President Xi Jinping said it is in the common interests of China, the EU and the international community to maintain the upward momentum of China-EU relations and pursue mutual benefits. Xi made the remarks when meeting with President of the European Council Charles Michel, who visited Beijing on behalf of the 27 EU member states on December 1.

Dialogue 

As the world today has entered a new period of turbulence and change, and China-EU relations face unprecedented complexity and difficulties, the face-to-face meeting and candid exchanges between the two leaders are of great significance, Dong Yifan, a researcher with the China Institutes of Contemporary International Relations, told Beijing Review. It will help the two sides deepen mutually beneficial cooperation and encourage them to jointly contribute to addressing global challenges, he added.

The bilateral relationship has been dampened since the EU defined China as a "systemic rival" in 2019. In 2021, the EU followed the U.S. in imposing sanctions on Chinese individuals and entities citing so-called human rights issues in the country's Xinjiang Uygur Autonomous Region. It also shelved several bilateral projects.

Nevertheless, when attending the Group of 20 Summit in Bali, Indonesia, in November, Michel said Europe will engage with China despite differences as it is "important to listen to each other, [and] to develop a better understanding."

There have been some misperceptions and misjudgments of China within the EU, but Michel's recent visit showed Brussels' willingness to warm up the relationship, according to Dong.

"It signals the EU's intention of not letting ideological confrontation dominate pragmatic cooperation. It also indicates there will perhaps be fewer political obstacles for trade and economic cooperation in the near future," Sun Yanhong, a researcher with the Institute of European Studies at the Chinese Academy of Social Sciences, told Global Times.

Xi made four observations on the development of China-EU relations during his talks with Michel, saying it is important to maintain the correct perceptions of one another, properly manage differences, lift bilateral cooperation to a higher level, and strengthen coordination and cooperation in international affairs.

"China welcomes the EU's participation in Belt and Road cooperation and the Global Development Initiative for greater synergy with the EU's Global Gateway strategy. Efforts should be made through existing mechanisms to push for more fruitful outcomes in dialogue and cooperation in various fields," Xi said.

Cooperation 

The EU is willing to be a reliable and predictable partner for cooperation with China, strengthen top-level exchanges and foster cooperation through direct dialogue so both sides can better face global challenges, Michel said.

Against the backdrop of an ongoing energy crisis, rising inflation and economic downturn facing Europe, it's important to boost China-EU economic and trade relations and explore new areas of cooperation, Dong said, adding this will help maintain world stability, as well as add more certainty to global collaboration on economy, industry, science and technology.

German chemical giant BASF has launched its largest-ever investment project in Zhanjiang, Guangdong Province, with investment estimated to reach $10 billion upon completion. It is also the first wholly foreign-funded project in China's heavy chemical industry, demonstrating the chemical behemoth's ambition to expand further into China, the world's largest market for chemical products.

This is a vivid example of European companies' further investment in China and their confidence in the Chinese market. According to Dong, more European enterprises are recognizing China's advantages in having a complete industrial chain, its large scientific and technological talent pool plus huge market vitality, and see China as an important base for innovation and a destination for creating key industrial links, Dong said, adding these demonstrate the enormous potential of China-EU economic and trade exchanges.

Amid complex global challenges, including the pandemic's lingering impacts, an intensifying climate crisis and an unsteady global economy, the two have even more reasons to strengthen strategic communication and build consensus, Dong said.

After all, China and Europe depend on each other with needs that are "not fundamentally different," and "viable answers to global challenges can only be found together with China," as former German Defense Minister Rudolf Scharping put it.

Prospects 

In November, German Chancellor Olaf Scholz paid an official visit to China joined by a business delegation. The two European leaders both emphasized the important role of mutually beneficial collaboration during their visits, Dong said, adding it is the rational and right choice for both China and the EU to pursue common development.

During his visit, Michel said the EU is willing to work with China to continue to push forward the Comprehensive Agreement on Investment (CAI), boost stability and mutual trust on supply chain issues and deepen cooperation in areas where mutual benefits exist.

The CAI would open both markets wider to one another, ensure labor and sustainability standards and create a dispute resolution mechanism. However, the pact was put on hold by the European Parliament in May 2021 over false Xinjiang-related accusations.

"It is in the interest of both sides to implement the agreement, which was also the consensus reached by the two sides when the negotiations were completed at the end of 2020," Dong said.

"I believe there's a reasonable chance for the reactivation of this dialogue to eventually lead to renewed discussions of the CAI," Harvey Dzodin, a researcher with the Beijing-based think tank Center for China and Globalization, told China Daily, referring to Michel's visit to China.

According to Sun, even with the CAI's ratification on hold, there are categories related to trade and investment issues under the investment framework that the two sides can work on. Europe, facing an energy crisis and a green energy transition, needs the vital new-energy products made by China, she said.

China's exports of photovoltaic products surged 90.3 percent year on year in the first 10 months this year, industry data showed.

The value of solar panel exports increased 85.8 percent year on year. As Europe's demand for photovoltaic products climbs, it now consumes more than half the modules produced in China, Wang Bohua, Chairman of the China Photovoltaic Industry Association, said on December 1.

(Print Edition Title: Window of Opportunity) 

Copyedited by G.P. Wilson 

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