Photo taken on late Sept. 28, 2013 shows a general view of the Waigaoqiao Bonded Area (L) and the Waigaoqiao Bonded Logistics Park of the China (Shanghai) Pilot Free Trade Zone in Shanghai, east China. The China (Shanghai) Pilot Free Trade Zone started operation on Sept. 29, launching a test bed for the Chinese leadership's drive of deepening market-oriented reforms and boosting economic vigor. [Xinhua photo]

The reformers seek to make the renminbi fully convertible and into a major international and a reserve currency within a decade. In Europe, the most pro-active financial centres, particularly the City of London, have moved aggressively ahead, hoping to ensure early-mover advantages in joint co-operation.

While both China and Europe are coping with challenges in energy, resources and climate change, both are supporting global efforts on green energy and sustainable technologies. In these areas, there is immense potential for co-operation as well.

While many observers like to focus on bilateral opportunities in Euro-Chinese relations, that approach is too narrow and simple.

China’s economic reforms come along with new regional integration, which also holds great potential for European interests, due to the broad, inherent potential of the emerging Asia.

Europe lagging behind China’s regional rebalancing

As the momentum of economic growth is shifting from the transatlantic axis to Asia, Washington and Beijing are rebalancing their foreign policies in the region.

While the build-up of US forces in Asia has intensified since 2011, China’s pivot concentrates on trade and development across Asia.

In the past, Chinese foreign ministers were US or Russia experts. Now the emphasis is back in Asia.

State councillor Yang Jiechi is focusing on China’s grand strategy in the region. Asia expert Wang Yi serves as chief of foreign ministry, while Washington ambassador Cui Tiankai, is also an Asia specialist.

Unfortunately, the Chinese pivot is still poorly understood and often misunderstood in Europe - particularly the nature of the “spillovers” of Chinese trade and investment in the region.

A few weeks ago, President Xi Jinping proposed joint efforts with the 10 Association of Southeast Asian Nations (Asean) member states to develop a ”Maritime Silk Road.”

In Brunei, Premier Li Keqiang outlined China’s 10-point Asean initiative for friendship and co-operation, security exchanges, bilateral trade to $1 trillion by 2020, an Asian infrastructure investment bank, and co-operation in maritime and regional finance.

In China and broader Asia, much of the GDP is generated by foreign multinationals operating in the region. As a result, Chinese investment and trade offer great opportunities to these companies, including European firms.

Washington is in a hurry to complete a Trans-Pacific Partnership (TPP), which includes advanced economies in Oceania, all North American Free Trade Agreement, or Nafta, partners, advanced Asean states, two Pacific nations and East Asia, minus China.

The TPP, in turn, has intensified Asian-Pacific co-operation in which China does have a role, particularly through free trade talks among the 10 Asean member states, and their free trade partners.

These talks aim at a Regional Comprehensive Economic Partnership (RCEP), which excludes the United States.

In brief, there is a massive trade bloc rush across Asia. And yet, in this race Europe is participating only indirectly, belatedly and inadequately. This is even clearer in view of Chinese rebalancing in South and Central Asia.