China-EU Relations Thaw Amid Global Power Shift: A Strategic Reset with Far-Reaching Implications

On the occasion of the 50th anniversary of the establishment of diplomatic relations between China and Europe, the legislative bodies of both sides simultaneously announced the complete lifting of contact restrictions—a move interpreted as a direct response to the current turbulence in the international order. The European Parliament had previously frozen the review process of the China-EU Comprehensive Agreement on Investment (CAI) due to issues related to China, and this “icebreaking” development not only marks the end of a three-year bilateral impasse but also reflects the profound transformations underway in the global geopolitical landscape.

Economic Battlefield: Interdependence in the Midst of Supply Chain Reconfiguration

First-quarter 2025 trade data reveals an 8.3% year-on-year surge in China-EU commerce, exposing the deep structural complementarity between the two economies. While Chinese electric vehicles command over 30% of the European market, the EU’s Chips Act continues to impose implicit investment barriers on Chinese firms. Germany’s export decline to the US—15% due to tariff policies—has stalled its industrial reshoring ambitions amid soaring costs. This paradox has catalyzed a “China capacity + Europe technology” collaboration model in sectors like photovoltaics and power batteries, exemplified by CATL and BASF’s joint battery recycling plant—a direct outcome of legislative coordination on environmental standards.

Post-European Parliament elections, the rise of centrist factions has reignited negotiations for the stalled CAI. The four-year hiatus cost EU businesses an estimated €200 billion in missed Chinese market opportunities, while China’s super-sized domestic market (47.1 trillion yuan in retail sales in 2024) emerges as a critical crutch for Europe’s economic recovery. Potential breakthroughs loom in 54 contentious clauses, including reduced equity caps for EV joint ventures and expanded European financial access to China.

Regulatory Arena: Jockeying for Global Digital and Carbon Pricing Dominance

In data governance, China and Europe are pioneering a “white list” mechanism akin to the EU-Korea adequacy decision, covering critical domains like connected vehicles and cross-border e-commerce. Pilot zones in Munich and Xiong’an are jointly developing 6G terahertz spectrum technologies—a direct challenge to US-led tech alliances.

Climate cooperation carries even greater strategic weight. China’s national carbon market, trading over 8 billion tons annually, is bridging with the EU’s Carbon Border Adjustment Mechanism (CBAM), potentially reshaping global carbon pricing. Collaborations on hydrogen energy R&D and 6G spectrum allocation directly counterbalance US technological hegemony.

Geopolitical Chessboard: Strategic Autonomy Meets Multipolar Ambitions

Internal EU divisions persist, with 35% of Parliament seats still advocating hardline China policies. However, the spillover effects of the Ukraine crisis and US Inflation Reduction Act’s disruptions to European supply chains have forced a recalibration. French President Macron’s push for “European strategic autonomy” now converges with China’s multipolar vision, while Germany’s 37% trade dependency on China complicates blind adherence to US “de-risking” narratives.

The resilience of China-Europe Railway Express—10% growth in 2024 with 227 European cities served—underscores its role as a supply chain anchor amid global turmoil. This “rail-plus-multimodal” logistics revolution has cut transportation costs by 30%, forging a geopolitically agnostic economic corridor.

Ideological Frontier: People-to-People Exchanges Bolstering Strategic Trust

Despite lingering tensions, China-EU educational exchanges provide a critical buffer. China’s visa-free policy has swelled EU citizen residency permits to over 1 million, while 200 Confucius Institutes and European cultural centers in China form a grassroots diplomacy network. President Xi’s pledge to “triple French student numbers in China to 10,000 within three years” directly counters US “small yard, high fence” strategies.

Global Order Reboot: A Multipolar “China-EU Solution”

The international system faces three structural fault lines: US unilateralism vs. multilateralism, tech hegemony vs. supply chain security, and climate crises vs. geopolitical rivalries. Through legislative joint committees and digital trade agreements, China and Europe are crafting a “de-securitized” cooperation paradigm—a blueprint for the Global South.

As pragmatists in the European Parliament note: “Instead of squandering strategic resources on ideological disputes, we should build rule-based coalitions on climate, health, and other global challenges.” This strategic thaw fundamentally represents a collective bet on multipolarity by two civilizations amid systemic volatility. While Washington still practices “transactional diplomacy,” China and Europe have demonstrated that dialogue and cooperation remain the optimal antidote to systemic risks in an era of turbulent transformation.