Why the EU-China investment deal exposes European weakness
- The agreement has shown the European Union, ravaged by the pandemic, to be the weaker economic and geopolitical actor. It must now hold China to its pledge to conform to International Labour Organization rules
Despite the deal, the European Commission has in the past referred to China as a “systemic rival”, suggesting that some degree of trade and other tensions with China are to be expected.
Nevertheless, with Poland, Austria, Hungary and potentially Italy slowly swinging to the far right of the political spectrum, and Germany and France also hoping to have a good relationship with China, it does seem that China has key EU members on its side.
Around 2024, when the European Parliament elections are due to be held, the institution’s rhetoric is likely to be pro-left and anti-market. The optics then could be in sharp contrast to the friendly face the EU and China have presented on the trade front.
There is also the possibility of a split between the EU and China, as the EU expands further into Eastern Europe. Serbia and Montenegro could use China as leverage to get more EU aid.
By concluding its investment agreement, Beijing appears to be striking while the iron is hot, having just helped push the RCEP agreement through.
A day after the RCEP was signed, Chinese Premier Li Keqiang urged all countries to speed up their domestic approval procedures to allow the pact to take effect as quickly as possible.
Exact details of the EU-China investment agreement remain unclear. The quiet negotiations may have been the result of lessons learned from the World Trade Organization meetings in Seattle in 1999 and Hong Kong in 2005, which saw large-scale protests.
The agreement – sound as it may seem – has exposed the EU, ravaged by the pandemic, as a weaker economic and geopolitical actor.
Had the EU waited for US President-elect Joe Biden to consolidate his administration first, the strength of transatlantic relations would have served as a counterweight to the emergence of transpacific ties, which China seems to want to dominate and control.
However, having signed the agreement, the EU must now pressure China to comply with ILO provisions. This might lead to an EU-China confrontation or dialogue over the treatment of Tibetans, Uygurs and other Muslim minorities.
Phar Kim Beng is founder and CEO of Strategic Pan Indo-Pacific Arena (Strategicpipa.org). He is a former Harvard head tutor and Cambridge Commonwealth Scholar