Higher education systems need to increasingly transform in order to face new challenges of society in a modern and global context. Both Europe and China are facing challenges in restructuring their higher education systems and embracing the potential for higher education to deliver innovative teaching and learning as well as social and economic services for a changing society. This paper analyses the challenges to European and Chinese universities today and elaborates on the implications of these challenges for EU-China higher education collaboration. An analysis of challenges and relevant strategies in these two contexts can offer us insights into the strengths and weaknesses of each system. This can act as a solid basis for future collaborations or as potential barriers. Thus, this paper endeavors to fill in the gap regarding EU-China higher education cooperation by reducing the knowledge deficit and bringing mutual understanding, respect, trust, and ultimately benefit to both sides.