Since 2003 the EU and China have acknowledged their strategic partnership, and have slowly but steadily built on it to develop one of the most structured relationships between two global powers in the world today. The re-emergence of China is a major driver of change in the ongoing transformation of the international system, and the EU–China strategic partnership is an important dimension in both Chinese and European foreign policies. As major trading entities, China and Europe have a significant effect on each other. China’s re-emergence and growing influence are, however, affecting Europe’s relative position in the global distribution of capabilities, and also pose a challenge to Europe’s governance outlook and to its very identity. In the wake of the great recession, friction has increased in the economic and trade relationship of China and the EU, which is the fundamental link between them. While they have many common interests, they are also competitors – and increasingly so. The future relationship between the EU and China is bound to be a difficult balancing act between competition and co-operation – at best an enlightened calibrating of national interests and global governance ambitions within a complex and transforming international environment.