Economic and geopolitical aspect of the EU-China bilateral relations

Abstract

The expected economic growth of the EU27 and China by 2025 will lead to a further increase in the share of the Chinese economy in world GDP and the overtaking of the EU economy in 2022. The main contribution of this paper is the presentation and analysis of IMF projected GDPs for China and the EU27 in the period 2020-25, and assessing the impact of divergent GDP growth trends of the two economic giants on the further development in their bilateral relations. Namely, since the change in the global economic position causes geopolitical consequences, it is clear that the very expectation of such trends influences the decisions of political and economic actors today - such as the signing of the investment agreement between Brussels and Beijing, despite Washington's opposition. The EU's response to China's growing influence could be an attempt to mitigate Beijing's strategic challenge by creating a stronger transatlantic partnership, but it is uncertain that Washington will be willing to offer significant concessions to Brussels. An alternative scenario could involve strengthening the EU's "strategic autonomy", which would imply an attempt at a more independent geopolitical positioning, which would enable better relations with China and easier access to the country's huge market. The EU, the world's largest trading bloc and the largest trading partner of as many as 80 countries, will find it difficult to come to terms with its subordinate role in Sino-US competition and will remain focused on exploring synergies with both powers.