Relations between the European Union (EU) and China began in 1975. Their trade relations were officially established during this time. These trade relations were also referred to as Sino European relations. The relations intended to improve issues such as prosperity, peace, sustainable development and trade. Trade has developed efficiently between China and the EU. This aspect is visible with the EU being China’s largest trade partner. Subsequently, China is the second main trade partner of the EU(Laursen). Increased trade interrelatedness between the EU and China has brought about the evolvement of certain policies and reforms. Three notable policies made include the anti-dumping policy and arms embargo policy by the EU, and the domestic open door policy by China. The three economic policies have shaped the trade interrelatedness between the EU and China.
The EU put the anti-dumping policy in placeto be a defense mechanism and to protect trade in the EU. Reforms on anti-dumping were agreed upon on 11 October this year. EU ambassadors encouraged and endorsed this measure reached between the European Parliament and the presidency. The anti-dumping policy would be used to assess market distortion. Thus, the new rules would help to maintain the capacity of the EU in protecting its producers against trade practices that seemed to be unfair. The EU’s aim in putting up this policy was mainly to detect and redress the cases in which imported product prices were found to be artificially lowered(Laursen).
How has the anti-dumping policy been affected by trade interrelatedness between the EU and China? Some companies in the EU have at times complained of dumping by some Chinese companies. These complains are mainly from companies that deal with steel products. It is important to note that a company is said to be dumping if the prices of a product that it is exporting to the EU are lower than the product’s normal value (Laursen). Due to the anti-dumping policy, the steel products from China to the EU are currently being taxed 28.5% anti-dumping duties (Groombridge). The tax increment was after an investigation by the European Commission that took around eight months.
With China’s improvements on its trade and exports to the EU, these reforms made on the anti-dumping policy will reduce pressure on the European industry. Additionally, it will ensure that there is a level playing field for EU products like steel. The EU currently has various measures for trade defense. There are around 43 anti-dumping measures in which 20 are on products that come from China (Groombridge).
Arms embargo policy
One of the products that were heavily traded by China from the EU was weaponry. The Arms embargo policy was more of a conduct kind of reform. However, the EU-China trade relations has led to the EU promising of the removal of this policy and have some kind of a structured written agreement.
Trade has made China rise fast to be a recognized powerhouse. The country now has a thriving economy. The European Union has been a major contributor to this growth because it provides a large market for China. China’s economic strength has enabled it to have the capability to purchase weapons, which has been viewed as a threat by the EU and other nations such as the United States. Thus, the arms embargo policy was imposed by the EU on China in order to suppress China’s military capability. The EU saw this necessary after China’s stand on the protest of Tiananmen Square in 1989 (Farnell).
The EU-China interrelatedness in trade has largely contributed to China’s strength. The arms embargo policy was seen by China as political discrimination and requested, for the second time in January 2010, for the policy to be removed. There have been rumors that this policy has caused internal division among some EU members. The United States’ influence has also enabled the maintenance of the arms embargo policy on China. As far as trade is concerned, whilst the policy remains, China purchases most of its weaponry from Russia (Farnell). Despite the policy, there have been leaked data of approval of defense exports from the EU to China. Such data may be true due to the EU-China trade relations.
Domestic open door policy
The open door policy in China only allowed foreign businesses from the EU to partially operate in China. The EU-China trade relations impacted on this policy in that it was adjusted to allow more EU business operations in China. China’s open door policy and domestic reforms were initially introduced to China to induce technology and capital from foreign nations. The policy was needed to speed up the China’s modernization drive. However, the reforms had no intentions of restructuring the social economic system of China. EU-China trade interrelations encouraged the formulation of these reforms. In the past, China only opened its doors partially for the EU and other foreign entities. However, with China’s increased trade relations with the EU, China will let in more businesses cooperation. These will include financial institutions like bank, insurance companies, security firms, insurance brokers, architectural design companies, among others. Other sectors that will benefit from the domestic open door policy will include, internet, telecommunication, transport, and education. Mining and other basic industries are also on the list (Edmonds).
These policies have improved trade relations between China and the EU. It is an important policy considering that the EU offers one of the largest markets for China. However, these reforms have opened China to other foreign markets including Africa. The reforms have enabled China’s open doors policy to get the same reception when doing business with other foreign nations.
The EU-China trade interrelatedness has seen the evolvement of different reforms and policies mainly from the lessons learnt from the two entities trade relations, trade interest protection of each entity, and better trade progressions for both entities. The reasons have seen the formulations of policies like the anti-dumping policy and arms embargo policy by the EU, and the domestic open door policy by China.
- Edmonds, Richard L. China and Europe since 1978: a European Perspective. Cambridge: Cambridge Univ. Press, 2002. Print.
- Farnell, John, and Paul C. I. Crookes. The Politics of EU – China Economic Relations: An Uneasy Partnership. London: Palgrave Macmillan, 2016. Print.
- Groombridge, M. A., & Barfield, C. E. (1999). Tiger by the tail: China and the World Trade Organization. Washington, D.C: AEI Press.
- Laursen, Finn. The Eu in the Global Political Economy. Brussels: P.I.E. Peter Lang, 2009. Print.