Page 7 - Azerbaijan State University of Economics

Fabio Massimo Parenti, Shi Chen: EU-China Relations in the Framework of the BRI a Critical
Analysis of EU Regulations on Trade and Investments

Looking at the infrastructures built, in construction and proposed it is clear that each
European region has different role, interest and potentiality in the BRI framework.
For example, whilst central Europe can benefit more directly and consistently from
railways connection, Italy, and in general Mediterranean region, can benefit more
from increase in trade volume by sea (Fardella and Prodi, 2017).

1.2. EUROPEAN CRITICS TOWARD CHINA AND THEIR
CONTRADICTIONS
According to Brugier (2017), a negative trend in the EU-China relations started in
2015 when Directorate General on Trade, led by Malmström, put TTIP with North
America a top priority (Before the TTIP was blocked: firstly, criticized by France, Germany and
an important part of EU’s public opinion; secondly, by president Trump, who withdrew from the
treaty’s negotiation), showing a will to redefine trade rules and standard outside the
WTO. Moreover, in 2016, the EU did not recognize the “market economy status” to
China and stressed weaknesses on human rights issues (European Parliament and
The Council, 2016). Not to mention the 2016 EU global security strategy, very
negligent on the China’s international role: on security and political issues, the EU
position towards China remains ambiguous and unclear. The renewed EU posture
towards China is eroding China’s confidence towards Europe, as previously
mentioned according to the Chang and Piecke’s survey. All of this, in net contrast
with a very promising reality, above all if we look at trade and investment data and

the China’s dynamism (Compared with the China-US trade relations, the exchange with Europe
is equally consistent but less unbalanced).

Market economy status (MES) and market principles
The main structural conditions of EU-China relations are clearly written in the
European Parliament Resolution on China’s market economy status (May 12 2016):
The Parliament rejected to grant the status to China in contrast with the European
Commission opinion. The final Resolution recognized the important relations with
China when it states: “the European Union and China are two of the biggest traders
in the world, with China being the EU’s second biggest trading partner and the EU
being China’s biggest trading partner, and with daily trade flows of well over EUR 1
billion between them. In 2015, investment from China into the EU exceeded for the
first time investment from the EU into China […] and the Chinese market has been
the main engine of profitability for a number of EU industries and brands”.
However, in spite of this important results, the resolutions states also: “given the
current level of State influence on the Chinese economy, firms’ decisions on prices,
costs, outputs and inputs do not respond to market signals reflecting supply and
demand […]. China’s overcapacity is already having strong social, economic and

7