On December 29, 2025, the “Grandwin Trade & Business Roundtable (Session XII)” was successfully held, co-hosted by Beijing Grandwin Law Firm and the World Trade Organization Research Association of the China Law Society. Themed “EU Trade Policy: Rule of Law and Challenges – Reflections from the Time To Decide Europe Summit 2025,” the salon was moderated by Guan Jian, an attorney at Beijing Grandwin Law Firm. The session featured a keynote speech by Mr. Yang Kunhao, a Ph.D. candidate at the European University Institute (EUI) School of Law, and commentary by Mr. Ye Bin, a research fellow at the Institute of European Studies, Chinese Academy of Social Sciences, followed by an open discussion. The discussions focused on the EU’s strategic adjustments in response to multiple crises, the evolution of its rule-of-law tools, and their profound impact on EU-China relations.

I. Keynote: Analyzing the EU’s Deep-Seated Anxieties and Strategic Responses through a Core Summit

Yang Kunhao began by introducing the internal and external challenges facing the EU and its policy developments, using the “Time to Decide Europe Summit 2025” recently held in Vienna, Austria, as a starting point. He noted that the summit reflected a deep structural anxiety among European elites and decision-makers. While the summit focused on “European competitiveness,” the core discussions consistently circled back to European integration and constitutional reforms within the EU, reflecting widespread concern over the stagnation of the integration process, inefficiencies in decision-making, and excessive external dependencies. The summit concluded that the fundamental solution to enhancing European competitiveness lies in continuing the process of European integration. However, structural contradictions, such as the EU’s insufficient competencies and divergent positions among member states on strengthening the Union, have left reform efforts trapped in a situation where “knowing what to do is easier than doing it.”

In the economic and trade sphere, the EU is building an “external economic law” framework encompassing investment screening, subsidy regulation, international procurement, supply chain due diligence, and carbon emissions controls. By embedding non-trade objectives such as economic security and values into unilateral trade rules, the EU is enhancing the “instrumentalization” and extraterritorial effects of these laws. Yang noted that although these legislative instruments appear neutral on the surface, their legislative and enforcement processes have clear China-related implications, suggesting that Chinese enterprises operating in Europe will face increasing legal risks in the future.

Regarding the EU’s policy toward China, Yang observed that the summit revealed a divide within the EU. On one hand, pragmatists hope to explore cooperation with China in specific areas such as environmental protection, climate change, and WTO reform. On the other hand, hardliners tend to push for “de-sinicization,” attempting to politicize and securitize economic and trade issues. He argued that while the EU will continue to implement restrictive trade measures, the uncertain security situation in Europe and widening U.S.-EU differences may create conditions for the EU to show a willingness to engage and negotiate with China in the short term, potentially opening opportunities for cooperation at the bilateral, regional, and multilateral (or plurilateral) levels.

II. Commentary: Unpacking the EU’s Governance Logic and Exploring Pragmatic Paths for EU-China Relations

Drawing on Yang’s presentation, Research Fellow Ye Bin offered a deeper analysis of the EU’s governance logic, current crises, and bilateral dynamics.

He began by emphasizing the central role of the rule of law in European integration, noting that while the EU’s actions are strictly governed by treaty-based mandates, its power-sharing and decentralized mechanisms also result in complex and inefficient decision-making, presenting a challenge to human governance capabilities. He argued that the EU is currently undergoing a policy shift amid multiple overlapping crises: an internal rule-of-law crisis (e.g., Hungary, Poland), security dependence on the United States, and technological competition with China and the United States. Against this backdrop, EU trade policy is shifting from a traditionally open stance to protectionism, with a proliferation of unilateral trade tools that essentially seek to advance the former WTO “Singapore issues” through unilateral measures, reflecting a more interventionist approach.

Regarding EU-China relations, Ye Bin offered several insights. He criticized the “condescending” attitude still held by some European political figures and their tendency to draw simplistic parallels between China and Russia. He also acknowledged that China’s understanding of Europe often lacks a legal and rule-of-law perspective. He suggested that this mutual lack of understanding is deepening the trust deficit.

In terms of cooperation pathways, Ye argued that working with partners committed to the rule of law offers greater stability than relying on power-based relationships. He stressed the importance of China learning from the EU in the field of international trade rules and noted that the space for bilateral EU-China negotiations is limited, with subsidies and state-owned enterprises serving as key obstacles. He suggested that multilateral cooperation may offer a way forward, with think tanks and academic institutions serving as crucial channels for breakthroughs. He proposed exploring the possibility of EU-China interaction within the CPTPP framework or enhancing the China-led RCEP mechanism to build a bridge with Europe.

III. Discussion: Focus on Rule-of-Law Practices and Perception Gaps

During the discussion, participants engaged in in-depth exchanges on the question of “how current changes in the European political landscape will shape the EU’s future economic and trade policy toward China.”

In response, Yang Kunhao noted that the summit expressed concern over the rise of far-right forces in Europe, predicting that internal divisions within the EU may further intensify. He also mentioned that the European Commission’s recent rapid push for an omnibus simplification package on corporate due diligence and financial reporting rules has raised questions about the legality of the legislative process, potentially undermining the EU’s rule-of-law foundations. However, he noted that this could also provide Chinese enterprises seeking to expand in Europe with additional preparation time, reducing short-term legal risks arising from incomplete compliance systems.

Ye Bin added that EU-China economic and trade relations are undergoing a structural transformation, with Europe now explicitly viewing China as a competitor in high-tech sectors. For EU legislation that may violate WTO rules, such as the proposed U.S.-EU seafood tariff legislation, he suggested exploring the possibility of judicial review before the Court of Justice of the European Union as a potential avenue of recourse under EU rule-of-law procedures.

Professor Yang Guohua praised the depth of the discussion, noting that it represented the beginning, not the end, of knowledge exploration. Using the proposed U.S.-EU seafood tariff legislation as an example, he emphasized that the rule of law must be supported by concrete institutional safeguards, not merely rhetorical ideals. He noted that international trade rules are facing severe challenges, and if the European Parliament passes legislation that clearly violates WTO rules, it would expose vulnerabilities in the EU’s rule-of-law system.

Attorney Guan Jian shared his observation that a significant “two-way perception gap” exists between China and the EU. On one hand, Europe holds serious misunderstandings about China based on outdated stereotypes. On the other, China’s understanding of Europe often overlooks Europe’s internal security anxieties and complexities. He stressed that candid, in-depth dialogue is essential to bridging this gap.

IV. Conclusion and Outlook: Finding a Stable Foundation for Cooperation Amid Rule-Based Rivalry

In his concluding remarks, Moderator Guan Jian summarized the key takeaways from the salon. The discussion provided a deep analysis of the EU in a period of strategic restructuring: an EU attempting to transform rule-of-law tools into core instruments for addressing internal and external challenges, yet constrained by internal divisions and the inherent limits of rule-of-law principles. For China, engaging with an increasingly sophisticated partner—and competitor—that wields rules in institutional competition requires a deepened understanding of the EU’s complex governance logic and a proactive exploration of pragmatic cooperation through multilateral frameworks such as the CPTPP and RCEP, as well as in specific areas such as legal collaboration and green technology. The future stability of EU-China relations will depend on the ability of both sides to build a strategic dialogue framework grounded in rules and mutual respect, while acknowledging their differences.