This paper evaluates the European policy towards China. First, it is demonstrated that a common European vision exists with regard to four issues: economic liberalisation, democracy and human rights, the position China has to take on the international scene, and its respect for the environment. Second, it elucidates Europe’s conditional engagement policy, which is a strategy combining sticks and carrots in several dimensions. However, China is not living up to Europe’s expectations. Moreover, competition is mounting.