Urbanisation is on the rise, and the conditions under which it takes place have profound consequences on the outcomes of millions, if not billions, of people. This report analyses the current smart cities initiatives in Europe and China, and it examines the state of the EU-China Partnership on smart and sustainable urbanisation. The report discusses the current developments in Europe and China and provides an evaluation of the first results of the recent EU-China Dialogue on Smart Cities, as well as other initiatives conducted by the two actors.Of particular importance is the achievements and the challenges in improving the quality of Urban Environment in the context of the EU-China bilateral cooperation, and the report extends this analysis into to the current business engagement in smart city projects carried out by EU and Chinese companies in each other’s economies.