This article argues that relations between Asia and the European Union, and its member states, have been marked by rising tension, because the end of the cold war has fundamentally changed the basis of the relationship. Neither side has yet adapted to these changes and both sides are still in the process of finding a new 'balance of power'. While European countries want to maintain the old status quo, with Asia as a subordinate partner, Asian leaders want to finally free themselves from 'political colonization' in order to transform the relationship into an equal partnership. In this article, contradictory perceptions are examined together with some of the reasons for rising tensions, within the parameters of the three main points at issue: a) economic interests, b) values, and c) new world order. The article concludes that none of these issues need lead to conflict, if both sides are willing to seek a way to work together on equal terms and thus reach a new 'balance of power'. But conflict could well be the result, if the emerging powers of Asia are not given their rightful place in the relationship.