The trajectory of Sino-European relations: The political and economic impact of the Covid-19 Pandemic

In the recent years, the power dynamics of Sino-European relations has shifted with the People’s Republic of China (PRC) becoming more assertive and strategic. However, with disruption and uncertainty in Europe due to the former US Trump administration, Brexit, and the Ukrainian war, the EU needs PRC’s international engagement to build a resilient international political community. PRC also needs the European market to expand outwardly, via the Belt and Road Initiative (BRI), to overcome its stagnation of domestic economy. Amidst this sensitive phase of the developing Sino-European relationship, the pandemic of Covid-19 hit the world.

According to complex interdependence theory, the social and economic interconnectedness of the world transcends intergovernmental relationship. The pandemic brought a negative impact and weakened political resilience and European countries began to re-examine negative effects of complex interdependence, especially with PRC. The objective of this paper is to examine if this unique phenomenon of the pandemic has altered the trajectory of the Sino-European relationship. This literature is significant as few scholars in the field of Social Science have analysed Sino-European relations, specifically in light of the Covid-19 pandemic.

Relevant organisations, or actors, include PRC, the EU and EU member state governments, ambassadors, State Owned Enterprises (SOEs), and private firms. There is no clear theory on how these actors react to pandemics in the complex interdependent modern era. Hence, this study takes an inductive approach by gathering relevant evidence for analysis. The main conclusion and implication of this study is that the actual data appears to show a decline of Chinese FDIs (Foreign Direct Investments) in Europe after the pandemic. However, the EU increasingly recognizes PRC as a systematic rival and involved parties are raising concern on PRC’s influence over Europe.