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From left, European Commission President Jean-Claude Juncker, Chinese Premier Li Keqiang and European Council President Donald Tusk at the EU-China summit on Tuesday. Photo: EPA-EFE

Before a joint statement, a threat: EU diplomats nearly walked out of talks with China

  • A rare show of EU hostility, diplomats said, reflected its impatience with China’s lack of follow-through on market reforms
  • The EU representatives seemed to take a lesson from how US President Donald Trump and his team pressured China, analysts said

Two days before Chinese Premier Li Keqiang boarded the flight from Beijing for Brussels to attend Tuesday’s annual summit with European Union leaders, his team of diplomats was desperate.

They were struggling to get their EU counterparts back to the table to agree on a joint statement to be released at the end of the meeting between Li and the two EU leaders: European Commission President Jean-Claude Juncker and European Council President Donald Tusk.

The two sides were able to draft a joint statement at the last minute, but not before European negotiators initially threatened to walk out from the discussions about it without knowing what reforms and, crucially, what timetables for their implementation Li would present.

The rare show of EU hostility, diplomats said, reflected its impatience with China’s lack of solid promises or follow-through on when and how it would deliver the market reforms the EU had been waiting for years to see.

The EU representatives also showed signs of being emboldened by the behaviour of US President Donald Trump and his team in pressuring China to secure better trading terms, according to analysts.

A more-assertive-than-before Europe began to show its face weeks before the summit.

Chinese Premier Li Keqiang and European Council President Donald Tusk attend a joint news conference after the EU-China summit in Brussels on April 9, 2019. Photo: Reuters

Once an advocate for closer ties with China, the EU published “EU-China: A Strategic Outlook” on March 12, unprecedentedly slamming Beijing as a “systemic rival” along with 10 proposals for dealing with Beijing.

The report was out just ahead of Chinese President Xi Jinping’s European tour, which China hoped would be highlighted by Italy’s decision to join Xi’s signature “Belt and Road Initiative”, the first Group of Seven nation to do so.

While that was achieved, China got a dressing-down from the leader of the other country Xi was visiting: the French President Emmanuel Macron.

“The period of European naivety is over” when it came to how to handle China, Macron said just a few days before hosting Xi in the Elysee Palace for a state visit.

In a sign that Berlin is also strongly influencing the EU strategy, Germany’s main business lobby, the BDI, has also recently started describing Beijing as a “systemic competitor”.

“The east wind has been blowing quite strongly, and more recently, it’s been smelling a bit foul too. Now we need a stronger west wind. This is what you will hear all around Europe these days,” said Reinhard Bütikofer, a member of the European Parliament who serves as a deputy chair of the European Parliament delegation for relations with China.

The Chinese delegation to the EU, meanwhile, tried to fight back. Zhang Ming, the ambassador representing the mission, said in an interview with Politico that he disagreed with the label of “systemic rival” the EU had adopted, saying: “In Chinese culture, rivals are bound to seek superiority over the other side.”

At summit, Li Keqiang vows reforms: ‘When we say it, we have got to do it’

This is not to say that China has no EU allies. For instance, the Greek deputy prime minister Yannis Dragasakis told the South China Morning Post he hoped that the EU would build a better relationship with China.

Still, the China team in the foreign affairs arms of the European Council was determined to stay firm this time, at one point threatening to pull out of the negotiations.

“The Chinese side, as I understood, was really keen on having this statement,” Mikko Huotari, deputy director of the Germany-based Mercator Institute for China Studies, said.

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With some European diplomats lobbying in favour of producing a joint statement, the EU decided to keep negotiations going, upon pressing the Chinese delegation further.

The Chinese team came back with revised editions on Friday, Saturday and Sunday, the Post has learned.

“If we can get a joint statement, why not?” a diplomat told the Post. “For the Chinese, having a joint statement is an important thing.

“For Europe, it doesn’t matter to us as much as to them, but it would be a good opportunity to cover the topics we’d like to.”

Li Keqiang, Donald Tusk and Jean-Claude Juncker give a press conference at the EU-China Summit in Brussels. Photo: EPA-EFE

Another diplomat with knowledge of the negotiations said that the EU side insisted their Chinese counterparts secure approval from Beijing’s top leadership on revisions Europe would deem acceptable.

“The ability to get a deal has a lot of symbolism for China, especially at a time when China hopes to show partnership with the EU amid a trade war with the US,” Huotari said.

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While China gained the symbolism it wanted, Huotari said, Europe secured concrete timelines on Chinese reforms – timelines that Beijing for years had refused to offer.

When Li walked to the podium and spoke to the press corps at the heart of the European Union on Tuesday, accompanied by Tusk and Juncker, he disclosed China’s timetables for reforms for the first time.

By the end of this year, China and the EU would agree on a list of geographical indications, a scheme by which the EU seeks to protect its farmers by giving labels to products whose qualities are linked to their specific geographical origin, for example Champagne or Parmesan.

More important to the EU, though, is China’s agreement to sign a long-overdue investment deal with it “by the end of next year, or earlier”.

Jo Leinen, chair of the European Parliament’s delegation for relations with the China, regarded these promises as a consequence of the EU’s tougher stance.

“We see much clearer that the former win-win situation is turning into a win-lose situation,” he said. “China moved, in a few areas, and again made promises in other areas.

“So it’s a mixture of taking a step forward, and giving us the hope that other steps will follow,” Leinen said.

If the investment deal is implemented, according to the joint statement, “the high level of ambition will be reflected in substantially improved market access [and] the elimination of discriminatory requirements and practices affecting foreign investors”.

Guarantees aside, EU diplomats remained sceptical. “Whether it’s too good to be true – only time will tell,” one said.

This article appeared in the South China Morning Post print edition as: How Europe’s walkout threat sealed China deal
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