A troubled relationship

Whenever top politicians from the European Union and China meet in public they beam into the cameras. Those smiles, however, cannot solve their differences. In their positions on democracy and human rights, for example, they are worlds apart.

Yet there is some hope that there might be more rapprochement when Xi Jingping takes over from Hu Jintao as party leader and president in March, 2013.

"It doesn't necessarily mean that China is going to become a market economy over night," Horst Löchel from the Frankfurt School of Finance told DW. "But I think at least it will speed up the liberalization of China's markets."

Mutual dependency

Chinaand Europe are dependent on each other because they both profit from close trade ties. Europe is China's number-one trade partner and Chinese investments in Europe have helped mitigate the impact of the euro crisis.

"We're the biggest market for Chinese goods; EU firms are the biggest suppliers of high technology to China," points out the EU's ambassador to China Markus Ederer.

"And China has a massive interest in keeping the euro alive" because the existence of a further main global currency alongside the US dollar would help China eventually turn its yuan into a global reserve currency, he explained. In other words, it was mostly trade that held China-EU ties together.

However, there has been a growing lack of trust on Europe's part since China started shopping around in Europe. Critics fear China is trying to make financially weakened countries dependent on it. Chinese companies, for example, now own part of the port in Piraeus, Greece. It is the biggest passenger port in Europe and the third busiest in the world and thus extremely important for China's economic expansion.

Chinese plans for Europe

Experts presume that China already has future plans for Europe. Elmar Brok, a Christian Democrat MEP (Member of the European Parliament), recently told the German newspaper Die Welt that China had a "comprehensive strategic concept for Europe that Chinese companies are obliged to adhere to."

The EU, on the other hand, only had an outdated strategy for the Asian superpower, according to Ronja Kempin from the German Institute for International and Security Affairs.

"Critics would even say that the EU has no China strategy at all," she told DW. “No strategy that puts us in a position to deal with China as a booming economic power and a country that is becoming increasingly significant in geopolitical and geostrategic terms.”

She explained the reason for that was in the nature of the EU: On the one hand, it had to conduct foreign policy on behalf of 27 member states; On the other hand, each state had its own interest in maintaining independent ties with China, especially with regard to profitable economic agreements.

"The member states do not want the EU to conduct politics on their behalf; they want to make policies on their own and thus are muffling the common voice of the EU, which with regard to China could take a stronger political position."

Ederer, however, did not believe this was weakening the EU. He agreed that it made economic sense for EU countries to promote their interests abroad. "However, when it comes to trade relations their conditions, the EU alone is responsible. The EU negotiates trade agreements; soon it will sign an investment treaty with China."

And this is the crux of the matter - whereas EU markets are largely open to foreign investment, China's are not. Western companies wanting to work with China are often forced to produce in China, which causes a loss of jobs in Europe and leads to the breaching of patents.

Ederer was, however, hopeful that China's leadership would "take on the global political responsibility that matches its economic weight." Only then would China's leaders and their counterparts in the EU be able to flash real, heartfelt smiles at their upcoming summits.