For many years European Union has been one of the largest importers of the goods produced in China. On the other hand China today has become the second largest export market for European Union after United States. However Sino-European relationship has never been at same level as compared to Sino-American relationship. It can be said that Europe as compared to America has lagged in developing a proactive and beneficial economic ties. However at present focus on economic relationship between Europe and China is the most important aspect of entire engagement (Dent 1999). Since 2004, European Union has been one of the largest trading partners of China with rapid expansion in the overall economic ties between the two. Importance of this economic alliance can be judged by the fact that, European Union’s foreign direct investment peaked at an all-time high of €17 billion in 2011.
At the same time, Chinese are also not lagging behind in terms of their investment in Europe. This can be easily judged by the fact that Chinese investment has increased three times to €7.4 billion for the period ranging between 2009 and 2011. It is important to note that this investment which has been consistently taking place between Europe and China is not in some specific sectors, but is spread across various important sectors. In fact because of the sovereign debt crisis, China has been investing in European bonds. Though there are political reasons also behind such investment.