On October 24 last year, the European Commission released a new document on EU's China policy. In the political document entitled "EU-China: Closer Partners, Growing Responsibilities," the EU stresses that Europe needs to have an effective response to China's reemergence.

"Competition and Partnership," the first document released by the EU on its trade policy toward China, set out a number of policy priorities on trade and investment with regard to China. The document stressed that China is a successful case of globalization, rather than a threat. But it also said that Europe should adjust to the competitive challenge from China, while China itself should reciprocate by strengthening its commitment to economic openness and market reform. The EU urged China to further open its market, revalue the Renminbi, fulfill its World Trade Organization obligations and strengthen the fight against intellectual property rights infringements. It also asked China to fully open its banking industry by the end of 2006.

From the two documents, people will find that the EU is trying to seek a balance between the "theory of opportunity" and the "theory of threat." On the one hand, the EU pointed out that a well-off China is in the interest of the EU, as China has been a source of economic growth for Europe and the world. On the other, the EU claimed that China's current development mode has led to a serious trade imbalance with Europe, and asked China to shoulder its responsibility to stabilize and balance the world economy. Such a dual attitude reflects the contradiction in the EU's China policy, which can explain why the EU still hesitates to lift the weapons embargo on China and recognize China's market economy status.

These issues show that bilateral relations are still affected by some uncertain factors. First, the two sides lack political mutual trust and an adequate coordination of interests. Although Chinese leaders have said in a clear-cut way on many occasions that China is following a peaceful development path and is not a threat to others, Europeans are still concerned about China's rise.

With regard to the contradictions and problems in their economic and trade relations, the two sides have not coordinated very well. A good complementarity in their bilateral trade has not emerged. What China needs is Europe's high technology, rather than high-priced low-technology products.

Second, the change in the leadership of key EU member nations may also affect the deepening of China-EU relations. During the tenure of former German Chancellor Gerhard Schroeder, Germany and China maintained a close cooperative relationship. For France, because of the friendly attitude of President Chirac toward China, the relations between the two countries have been more intimate. But now, Schroeder has stepped down, France will hold its presidential election in May, and British Prime Minister Tony Blair is also leaving, which makes future China-EU relations unpredictable.

Third, the inherent shortcomings in the EU's decision-making process cannot ensure the sound development of bilateral relations. As the EU is composed of 25 members currently, the interests of each member do not completely overlap with the common interests of Europe as a whole. The principle of unanimous agreement among all member states often leads to a situation in which EU members pass some general bills on EU-China relations while not being able to reach a consensus on specific issues concerning the interests of individual member states.

Take the anti-dumping case leveled against China by Europe last year for instance, although it only involved a few South European countries such as Italy, Portugal and Spain, it turned out to be a conflict between all of Europe and China based on the requirement for unanimous agreement, which disguised the fact that over half of the member states opposed imposing anti-dumping duties.

In the decision-making on its trade relations with China, the European Commission and the governments of its member states are mutually restricted, and they lack a unified trade and economic strategy toward China. Disputes have continued within the EU, both on recognizing China's full market economy status and signing the new pact on EU-China partnership relations.

Fourth, some other elements, such as a less competitive European economy, various social problems in Europe, Europe's integration process and the setback in the referendum on ratifying the European Constitution, also negatively affect the development of China-EU relations. Since China introduced its reform and opening policies over 20 years ago, it has maintained a sustained rapid economic growth and its comprehensive national strength has been enhanced.

During the period, however, European countries have suffered an economic depression. Accompanying the slumping economy, unemployment, the shortcomings of the social welfare system, conflicts over immigration and other social problems occurred.

Such an uneven development status between China and Europe will naturally affect the smooth development of bilateral relations. Many Europeans would like to criticize China's development and harp on the trade deficit European countries are running with China. They assume that Europe's economy will recover and their social problems will be resolved if EU's trade with China reaches an equilibrium.

In contrast to such simplistic views, some European statesmen and scholars have a rational view. Schmidt pointed out that if there were no low-priced products from China, Europeans would not be able to maintain a well-off life. In any case, China should not be blamed for causing a high unemployment rate in Europe. He stressed that a problematic labor market and an aging society are the real reasons for the problems.

(The author is a research fellow with the Chinese Academy of Social Sciences)