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Within the context of the EU’s Common Foreign and Security Policy (CFSP), the great significance of the EU’s geo-economics is vividly visible where the application of geo-economic instruments such as economic integration agreements (EIA) and the financial sanctions to achieve geopo- litical objectives are among the most popular and tangible external actions of the EU. [...] 16   Geo-economics of the European Union and the China Challenge the biggest external financing instrument is the European Development Fund (EDF) which is outside of the Multi-financial framework (MFF) and the EU budget and is managed by the Commission. [...] While highlighting the effectiveness of sanctions, it is ar- gued that the detriment of sanctions on a domestic market of the state depend on the trade flow and market size.36 Though the financial sanc- tions have been imposed in the EU’s foreign policy since the 1980s, it is only a recent phenomenon that EU citizens have woken up to the imposition of sanctions in foreign policy of the EU. [...] The development and the international role of the Euro increases the strategic significance of the geopolitics of Euro- pean Financial Markets. [...] When Chinese President Xi Jinping visited the EU institutions in 2014 – the first ever visit to the EU institutions by any Chinese President – the relationship received a boost from a diplomatic point of view.53 One of the most important relationships of the 21st century is the relationship between the EU and China.