China, the European Union (EU) and the United States (US) are three major markets at global level, that exchange goods and services in an ever faster and more complex economic development. This triangle is not necessarily the fundamental paradigm in trade and finance, but in various forms, it represents a coordinate that every major or aspiring trade power needs to take into consideration when analyzing options. Taking into consideration that post-Perestroika global order does not represent anymore a constant at international relations level, this article analyzes the evolution of trade routes between China and the EU, considering the rapid rise of Chinese economic model, Europe’s strive to maintain its position as a key global player and America’s relatively reactive posture to post-oil era economic competition.

China, the EU, trade, and routes

Neither nominal GDP (Gross Domestic Product), nor GDP PPP (Purchase Power Parity) directly reflect the precise dimension of an economy, but considering that China and the US have a trade to GDP ratio less than 50 % (macrotrends, 2024) and intra-EU trade surpasses trade with third-party countries (McEvoy, 2024), GDP PPP will be considered in the following section. According to World Bank database, China was the largest economy in the world with a 2023 GDP PPP standing at $ 34.64 trillion. US GDP PPP economy was estimated at $ 27.36 trillion and EU economy at $ 27.13 trillion for the same year ( World Bank , 2024).

The EU trade with China (EUR 739 bln) in 2023 identified China as the most important trading partner for the Union with a 15 % share in goods trade. Despite US share of 17 % in EU’s trade, the dynamics are also underlining China’s growing importance: while US share in EU trade decreased from year 2000 to 2023, China’s share increased from 5 % to 15 % in the same period (Statistisches Bundesamt, 2024). The US runs a trade deficit with the EU and China, and the EU runs a trade deficit with China. Hence, China’s trade balance with both major markets from Europe and America is positive.

According to Eurostat (Eurostat, 2024), most imported goods in the EU from China were in 2022 and 2023 telecommunication equipment, electrical machinery and apparatus, automatic data processing machines, electronic tubes, waves and related articles, electric power machinery and parts, motor cars and motor vehicles, household D-type equipment and electrical apparatus for electrical circuits. The import of these goods suggests that core EU trade interests include the development of telecom industry, electrification, and thus environmental transformation, as well as competitiveness increase through manufacturing cost reduction for certain machinery and apparatus.

The busiest trade routes in the world are reportedly the English Channel/Dover Strait, Malacca Strait, Strait of Hormuz, Suez Canal, and Panama Canal (Frightfy, 2024). From this perspective, EU’s trade with the US and the UK is conditioned by the security of Dover Strait, while trade with China and Asia in general by the security of Suez Canal and Malacca Strait. Acknowledging the importance existing trade routes, from the perspective on China’s bid to expand its connectivity with the rest of the world, new trade infrastructure is being built within the Belt and Road Initiative (BRI) framework, while regional connectivity projects like Iraq’s (New) Development Road, or International North-South Transport Corridor (INSTC) are being developed.

The definition of new trade routes and investments in supporting infrastructure has multiple political implications but did not appear to emerge as a challenge to the existing trade system. However, given its expected outcomes, it will probably create fundamental new challenges for existing and emerging trade powers. Should the global trade system continue to essentially focus on economic efficiency and a relative free competition rather than political goals, the challenges raised by new trade routes may refer to prices, economic development and efficiency, and availability.

Fundamental dynamics in trade and logistics

Considering the essential role of trade in the development of societies and cultures for millennia, a potential scenario of deglobalization in terms of trade or finances is highly unlikely. Assuming that traditional economic and trade powers may desire changes to the existing trade system, and mention regionalization as a potential alternative for the future while probably betting on financial deployment and other tools to advance interests and regionalize economic supply chains, China’s bid for consolidation and expansion of large trade infrastructure can be considered a potential re-globalization.

The appetite for rethinking global trade has apparently been ignited by the Chinese Belt and Road Initiative (which represent the main core of Chinese foreign policy). This project took off separately from BRICS, and focused on deploying capital and resources in order to expand trading routes and infrastructure that would allow China and partners to optimize trade volume and efficiency. Literature specifically mentions that BRI and BRICS are different projects, and that BRI involves five connectivity aspects: policy, infrastructure, trade, finance, and people-to-people (Singh, 2022, p. 4). BRI investments and infrastructure development have, thus a strategic political component, which has been identified as “strategic alignment” (Singh, 2022, p. 4), (Krishna Chaitanya Vadlamannati, 2023). This can also be equated to a realignment, considering the already existing trade patterns and the potential to redefine global trade.

While trade between the EU and China develops on existing and new trading routes, it can be acknowledged that BRI emerges as an addition to existing infrastructure. Hence, from this perspective, the role of BRI is to augment, diversify, increase efficiency, and secure existing trade between the two markets. BRI is a combined sea, land and air connectivity project that essentially connects China to major trade partners like neighboring economies (India, Pakistan, etc.) the EU and African countries. At present, no official BRI routes to the Americas were disclosed. The maritime nodes of the project are Mediterranean ports in Greece and Italy, which are supposed to forward the goods to hubs like Rotterdam on land.

A major alternative to sea transportation appears to be the BRI train routes from China to Europe. The growth in trade volume shipped by train appears to be significant. On May 26^th, 2024, Global Times China was reporting that 90,000^th train runs, with X8157 train departing from Xi’an International Port Station (China) to Malaszewicze (Poland) (Yang & Weilan, 2024). The volume of goods shipped surpassed 8.7 million TEUs (20-foot Equivalent Units) and value $ 380 billion. The article reports that train shipments require 15-20 days to reach destination when compared to 45 days by sea and the cost is lower according to Chen Zhao, manager of Shaanxi Konka Intelligent Home Appliances Co (Yang & Weilan, 2024).

BRI as a concept expands the view on trade routes and inspired other countries to reconsider the importance of infrastructure in advancing trade and economic development. On the one hand, this may rescale competition and on the other, it may face new types of risks in the competition for global dominance.

Determinants and risk categories for China – EU trade and routes

As of August 2024, there was no significant BRI competitor, although the European Parliament was mentioning the Global Gateway project as response in a 2023 report (European Parliament, 2024), with Team Europa investments expected to surpass EUR 300 bln. by 2027 (Die EU-Kommission, 2024). While Chinese investments in European trade infrastructure have been catalogues as potentially in conflict with EU or NATO security, it must be emphasized that the expansion of trade volume and investments continue. Nevertheless, political risks of EU-China trade remain and the cooperation paradigms become more complex.

          A. From a political perspective, the EU trade with the US is stagnating or decreasing, while with China the trend is opposite. The dichotomy between security-based cooperation between the EU and the US on one hand, and the increasing trade ties between the EU and China stretch EU international policy to highest levels, as China is increasingly perceived by the US as a competitor to global hegemony. The 2020 Comprehensive Agreement on Investment (CAI) between the EU and China is yet to be ratified(European Comission, 2024), but the willingness to increase trade cooperation between the two parties appears to be increasing.

As the US strives to outcompete China by imposing tariffs and export bans on key technologies to China, the EU is expected to rather chose between the two markets than accessing both in full pursuit of its interests. In this sense, companies that are involved in semiconductor manufacturing, for example, like ASML, that either work with suppliers from the US or have a large market share depending on US political decisions, must choose a single business development direction.

Another political determinant of EU – China trade is the common understanding on key trade areas like electric vehicles and solar panels. Acknowledging that China exerts a systematic control on supply chains and resources related to new energies, it becomes obvious that other factors like cost of manufacturing introduce a significant competitive advantage for China in trade relations with the EU and other partners. This resulted in both European and American tariffs on Chinese electric vehicles, and China reacted by building electric vehicle or battery plants in Hungary, Türkiye, and Morocco. After exchanging trade-limiting measures, China and EU announced in June 2024 that consultations related to electric vehicle subsidies will start (Cater, 2024).

As Europe makes significant efforts to transition towards clean energy, an advantage that was supposed to make it more competitive on long term, another discussion point appeared between China and its economic competitors, the US, and the EU: the so-called overcapacity in the field of renewable energy generation, besides that in electric vehicles. As of 2022, China has reportedly reached 393 GW installed solar power, while the second-place contender, USA, only 113 GW (World Population Review, 2024). China is said to build two thirds of world’s wind and solar projects (Hawkins, 2024), aiming for 1200 GW installed power by the end of 2024, and help other nations to transit faster at reduced costs (Black & Yang, 2024).

While China is outcompeting traditional energy players, the narrative of Chinese “overcapacity” has at least two political implications: it aims to assign a certain perception to this industrial capacity and its possible role in transforming economies and it implies that WTO is still functioning based on apolitical market opening and equality of (economic) chances. As the number and sanctions and embargoes appears to surpass any imagination recently, and limits of corporations to successfully implement privatization in key sectors become visible in Europe (Demuth, Friederiszick, & Reinhold, 2022), (Hancox, 2020), (Corporate Europe Observatory, 2013), the price level and availability remain fundamental market and trade coordinates. Hence, China’s economic and trade proposals arrive in Europe and the US simultaneous to the development of large economic blocks like BRICS and ASEAN, that will probably allow the Chinese economy to sustain development on short and middle term should a trade war erupt. Furthermore, the trade tariffs introduced by former President Trump to certain EU goods and the lack of a Free Trade Agreement (FTA) between the two security partners hints at a potential larger rift that may endanger the WTO foundation of international trade on long term.

          B. Another category of risks for EU – China trade is represented by third party interests and developments. As any hegemonic power would do, the US may seek to “contain” China’s growing economic and trade growth, at multiple levels. The 20^th century American domination based on oil and energy abundance continues, but the speed of industrial development appears to become higher in China, and the financial and trade hegemony appears to be challenged by the multipolar aspiration of large emerging economies. The American negative perception on China’s expansion is reflected besides political declarations by propagandistic messages attempting to underestimate or question the latter. For example, an October 2023 article by Voice of America(Ridgwell, 2023) claims that BRI is” losing allure in Europe”. While some steps may have been recalibrated in Europe, the numbers presented above hint at growing and diversified trade between the EU and China, irrespective of BRI investments. The Economist also claimed in June 2024, that “China’s giant solar industry is in turmoil”, as prices and profits tumble due to “overcapacity”(Shaanxi, 2024). While fierce competition does indeed limit profits and decrease price, this is fully in line with how a market operates: when supply outpaces demand, prices decrease and profits as well. The fact that major Chinese manufacturers dominate this market is thus not necessarily a market problem, it represents an international trade challenge determined by bets on different economic development directions and markets growth.

Other third-party interests are competition from local connectivity projects and potentially equivalent projects. The India-Middle East-Europe Economic Corridor (IMEC), which implies enlargement of ports in Mumbai, United Arab Emirates (UAE), Haifa in Israel and Piraeus (Greece), as well as a land connection from UAE to Israel through Saudi Arabia and Jordan, has been reportedly supported by the US and presented as a competitor to BRI in connecting Europe to Asia. Whether this project will be completed or not, when, how and whether it will indeed compete BRI are still open topics. Although China and India may have competing interests, the narrative of India competing China with a similar project would imply that China will not grant access to BRI infrastructure for India, which is not a proven assumption. A Chinese author suggested in 2018 a potential alignment of BRI with Saudi Arabia’s Vision 2030 (Chen, S.Meng, & Shaobiao, 2018), hinted at flexibility in China’s approach to connectivity projects. Likewise, while India and China may compete for certain exports, the two economies do not appear to output very similar trade goods in the near future, hence an “alignment” that allows them to share trade resources cannot be completely ruled out.

In terms of approach, IMEC can be perceived as an old British trade route development, modified to avoid the Egyptian Suez Canal. Whether this can compete the efficiency of BRI, assuming the latter’s continued usage of the Suez Canal, is another question. While India and Europe could manage the political implications of replacing Egypt with Saudi Arabia, Jordan, and Israel as transit route, benefiting the economies of these countries, and accessing their markets easier, how the trade volumes will evolve requires further analysis. Acknowledging Foreign Development Investment (FDI) growth in India (Business Standard, 2024), the US, among other third parties, may be able to secure indirectly a portion of European market, and exert control over this trade route at least from the perspective of its alliance with Israel. But this project is not in the BRI class: it does not have alternative, faster, land routes, it does not offer access to so many markets as BRI does for both China and the EU, it connects Mumbai and Piraeus only, without addressing similarly connectivity within India and between Piraeus and among major European trade hubs. It also does not consider as many emerging economies as the BRI and does not advance faster infrastructure development as China does within the BRI framework. Combined with China’s rising renewable energy production and expansion of technologies like hydrogen production (Blasio & Pflugmann, 2021), BRI represents a platform that can significantly improve trade efficiency at least on short and medium term. On long term, should breakthroughs be achieved in electric long-distance drones, trade routes may redefine once again. However, although presented as a competitor to BRI by certain supporters, IMEC is another type of project, apparently much more limited in scope and scale.

           C. Another category of risks for China – EU trade is, irrespective of BRI participation, the security of trade routes and infrastructure. At the beginning of August 2024, news broke out that a major explosion occurred at Ningbo-Zhoushan Port(BBC, 2024), one of the busiest ports in China along Port of Shanghai, Shenzhen, Guangzhou, Hong Kong, Qingdao, Tianjin, Dalian, and Xiamen(GoComet, 2024). In terms or route between China and the EU, Suez Canal and Malacca Strait represent potential short-term risks should sabotage occur. In this sense, China built a logistical military base in Djibouti, but the Malacca Strait region is highly contested: India reportedly began building a military base on the Great Nicobar Island (Menon, 2023), and the US and its allies attempt to rally opposition against China in the South China Sea region and expands its presence in the Philippines (Geographical Magazine, 2023). These relatively predictable positions of competitors will become more relevant in case of an all-out conflict, and disruptions will probably be replied to with reciprocal measures. But in case of a subversive confrontation instead of an all-out war, various security risks may arise for EU – China trade. While European defense is closely connected to the American military presence on its continent, in the aftermath of Nord Stream Pipeline destruction Europe resembled a weak security actor. The US also failed to help the EU in upholding its energy security, the development of European energy-dependent industries and their existence being threatened.

The failure to deliver comprehensive and predictable outcomes in War on Terror (WoT) by the US and its (European) allies, as well as the subversion and coup attempts in countries like Venezuela and Central Asia by various power groups from the West, may determine third party trade partners to rely on Chinese security guarantees rather than European ones. The Chinese security guarantees are not comprehensive at this point in history, but, as in the case of recent Bangladesh revolt, China appears to uphold its non-interference policy with respect to internal matters. On short term, this appears as a complicated stance, but on long term, China bets on partners able to manage their internal political landscape instead of having to invest resources in advancing own proposals. Hence, the non-interference principle combined with the new-era economic speed turn China into a relatively predictable challenge for its partners rather than a threat, allowing it to develop cooperation with relatively low political and economic costs.

The EU has also pursued a relatively peaceful approach to international relations. However, the relatively unpredictable approach to certain foreign financial assets in connection with the war from Ukraine may have prompted other third-party economic partners to reconsider trust in EU’s financial system on long term, with potential consequences on cost of doing business and trade guarantees.

Last but not least, EU economies managed to deliver high value goods at competitive prices. The recent energy supply disruption, security concerns and potential new trade barriers on electric vehicles and solar panels may impact block’s competitiveness on the global stage. This challenge comes at a time when the competition for raw materials increases due to faster-growing emerging economies. From a security perspective, two distinct scenarios may apply EU – China trade: in case the global community manages to agree on fundamental trade rules that take into account emerging economies and interests as part of the existing international system, the EU, China and other important global players will have to make concessions, but in case the multipolar world strive will be perceived as another attempt to gain concessions from uncontested powers without justification, this can result in a further escalation and wider conflicts. Particularly Central Asia, that hosts the (BRI) Middle Corridor may be caught between a competition between the US and Europe on one hand, that seek to expand influence in the former Soviet space and the Russian Federation on the other, that continues to support its claim a buffer zone, a condition it set at the disintegration of USSR.

Conclusively, security strains related to EU – China trade are multiple and not necessarily connected to economic competitiveness or trade barriers. The more the Global South attempts to claim a role in global relations, the more pushback can be noticed in certain contexts. If the reform of the United Nations Security Council was gaining prominence in discourse in the early 2010s, this subject appears to have been either paused or stopped, and replaced by a less deterministic but extensive paradigm in which especially BRICS economic powers join resources and advance large-scale economic and trade interests in an unprecedented manner. Furthermore, Türkiye’s inclusion in the Middle Corridor, that promises not only faster and more efficient trade between Europe and China, but also potential alternative energy routes to the Suez Canal and IMEC, reveals another aspect of competition for winning European market share: while Türkiye may have considered China a competitor in the EU, India’s potential expansion may have tipped the balance in Turkish strategic planning. The unintentional or intentional exclusion of Türkiye from IMEC prompted the latter to consider options in business with the EU, and the combination of Chinese trade and energy resources available in Central Asia may represent an alternative difficult to refuse for Europe. Hence, the Middle Corridor is not just an EU – China trade route, as Türkiye’s participation along Central Asian countries adds a major incentive for Europe to consider this business proposal. At the same time, the Middle Corridor adds pressure on IMEC to deliver even more efficient results, in the context of competition from BRI, Egypt’s Suez Canal, Iraq’s Development Road and its potential future ramifications in Iran or Syria, should Türkiye manage to contribute more to regional pacification in the near future.

Final Remarks

This article analyzed EU – China trade evolution and risks from multiple perspectives. In absolute trade terms, the EU – China cooperation expands, whereas EU – US trade does not grow at the same pace. This is in line with China’s trade growth not only with EU, but in general. China’s BRI initiative has been identified as a complex, large, relatively flexible, and future-oriented project that, although connects China to the EU and Africa, delivers many other opportunities for countries hosting especially land routes. The attempts to outcompete BRI are at the time of this article insignificant, i.e. reduced in scale and scope, and subject to a series of relatively difficult questions. In comparison to BRI, IMEC proposal appears very limited, does not consider the interests of major regional actors like Türkiye or Egypt.

Three types of risks have been identified for EU – China trade: political, third-party interests (strategic, political, economic) and security risks. The security risks depend on the approach international relations will adopt as a consequence of rising multipolarism bids: should the economic realities from 2024 be met with further denial and attempts to maintain a “rules-based order” instead of an order “based on international law” and cooperation despite differences, the unsymmetrical confrontations may result in further coups, sabotage and unfair competition accompanied by justificative propaganda. Should cooperation prevail, then all major and emerging trade stakeholders will have to make concessions and accept challenges instead of confrontation for the benefit of the entire international community.

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