Since the start of the economic reforms in the People's Republic of China four decades ago, relations with the European Union have evolved from nothing to a complex structure of interest and conflicts, that requires a multi-faced approach from the European site. Both challenges and opportunities that have emerged from the rise of China led the EU to name it as a strategic rival, economic competitor, and cooperation partner back in 2019. From the beginning of the new strategy, it was clear that such a trichotomic policy will not be easy to conduct coherently. To complicate the relations, even more, the growing rivalry between the United States of America and China has urged the European Union to aim for Strategic Autonomy, which would enable it to decide upon its vital issues alone, without unwanted geopolitical choices. Comprehensive Agreement on Investment concluded at the end of 2020 is the first serious decision of the EU in these new circumstances and controversies over the deal reflect skepticism towards the new strategy of the EU on China. Although the agreement's primary focus is materialistic and can be well explained by liberalism and realism, the two leading theories of International Relations have some shortcomings when it comes to political circumstances of the conclusion of the deal and provisions on non-material aspects. To fill that gap, the theory of Social Constructivism can be applied. Its inclusion of values and identity, without neglecting economic aspects, can help to understand why does the Comprehensive Agreement on Investment fits into the European Union trichotomous strategy towards China, when both parties are facing the complexities of their bilateral relations. Although the agreement is probably far from being perfect it can be easily argued that nothing more could be achieved, especially considering the issue of timing. However, negotiated provisions are promising and the deal can be defended as a move in the right direction and worth giving a try. It also addresses the idea of Strategic Autonomy the European Union should aim for. However, the political fate of the agreement is uncertain, since the ratification of the deal will face serious obstacles and whether it will come into force could redefine the future of the EU’s policy towards China. Next years and the future of the agreement will decide whether they will lead to further engagement, disappointment, or decoupling.