China must be seen to be a trustworthy partner to ensure success of its investment deal with the EU

China should abandon attempts to ‘divide and rule’ Europe, rein in boastful diplomats and seek collaboration by taking minority, rather than controlling, stakes

Though dismissed by some as underwhelming, the investment agreement will open a door for a more collaborative, mutually beneficial relationship

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A China-Europe goods train bound for Helsinki, Finland, departs from Putian Station in Zhengzhou, central China’s Henan province. There will be attempts to derail the EU-China investment agreement on its path to ratification, and China must tread carefully. Photo: Xinhua

Winston Mok, a private investor, was previously a private equity investor.

Published: 12:30am, 13 Jan 2021Updated: 1:52am, 13 Jan 2021

In light of events at the US Capitol last week, the EU’s decision to agree on an investment deal with China at the end of 2020 seemed prescient. Can a “post-truth” ally be trusted when democracy’s most fundamental institution – the peaceful transfer of power – is undermined from the top?

Among President Donald Trump’s more constructive legacies was perhaps the impetus he provided to the EU-China investment deal, so long in the making.

The agreement will not suddenly transform China into the West’s ideal. But at least it is more principled than America’s phase-one deal with China, reached early last year, which blatantly predetermined trade outcomes at the expense of US allies. So what’s wrong if Europeans can compete on a more equal footing with domestic firms in China, perhaps with an edge over American companies?

The damage has been done even if President-elect Joe Biden were to reverse the tariffs Trump imposed on European countries. Did the US consult the EU substantively before reaching its phase-one deal with China? Can the EU reasonably expect to significantly shape the renegotiation of any US-China deal so Europe is not disadvantaged?

While some may see the EU-China deal as somewhat underwhelming in substance, it perhaps portends a new era in international relations. Just as the European Union saws off a former world power, it has astutely deepened its economic ties with the next world economic power.