EU-China relations and the limits of economic diplomacy

This paper addresses a key problem in EU-China economic relations: the capacity of the EU to exert leverage through its economic diplomacy in the context of key economic trends, policy dilemmas, and processes of governance. The paper begins by identifying key elements of the EU’s economic diplomacy and their relationship to key functions: deliberation, representation, communication, and negotiation. It continues by reviewing key trends and challenges in EU-China economic relations, in terms of trade, finance/investment, and broader issues of economic performance, with special reference to the problems emanating from the current economic turbulence both in the EU and in the broader global political economy. It then identifies a number of key policy dilemmas for the EU in areas such as trade defense/trade promotion, environment/development, security/commercial priorities, investment/sovereignty, and explores these in terms of three key concepts: orientation, coordination, and effectiveness. In pursuing this analysis, the paper relates these trends and dilemmas to attempts to govern EU-China economic relations: public/private, bilateral/multilateral, and regulatory/political. In the final section of the paper, these efforts are evaluated in the context of the EU’s economic diplomacy, with relation to key actors, processes, and outcomes and to the key functions of deliberation, representation, communication, and negotiation.