China-EU trade relations : The period after 1975

Abstract: The aim of this thesis is to analyze China-EU trade relations with focus on the period after 1975, when the diplomatic relations between China and EU developed. The research questions are (i) what is the driver in the development of China-EU trade relations? This question is subdivided into two questions: how do economic factors impact on China-EU trade relations and how do political factors influence China-EU trade relations? (ii) what are the existing problems in the current China-EU relations? (iii) what are the future prospects? To carry out the research questions and fulfill the aim of the paper, a qualitative and quantitative method has been chosen in order to interpret and understand China-EU traderelations. The theoretical framework of this study is neo-realism and neo-liberalism with particular attention focusing on political issues and economic issues respectively. A number of conclusions can be drawn from research. First, China-EU trade has developed very rapidly. Trade relations between the two sides are good. They are the third largest traders with each other. Secondly, the momentum for the development of China-EU trade relations is rooted in their common interests in both the political and economic fields. Thirdly, the prospect of China-EU trade relations is promising. These factors include (i) the establishment of a foundation to promote the healthy development of China-EU trade (for example, a set of legal framework provides both sides with the legal basis for their economic relations); and (ii) the prediction of future political and economic environment as favorable to the development of China-EU trade relations. All factors show optimistically that China-EU trade will continue to prosper. The China-EU trade relationship is not without friction and the author theorizes that there are some potential danger factors; such as the Taiwan issue and trade disputes that may shadow the future development of China-EU trade relations and cannot be overlooked. At the end the author puts forward four suggestions to promote the further development of China-EU trade relations: (i) maintain the existing high-level of exchanges such as the annual EU-China summit; (ii) set up a warning mechanism to prevent trade disputes escalating; (iii) provide a method for establishing negotiations; (iv) prevent the politicizing of trade relations, for example, do not connect human right issue with trade relations. Unrelated issues should be addressed separately.