EU-China investment deal unlikely by year’s end, business group says
- Failure to agree on key issues at Monday’s talks suggests deadline will be missed, head of EU Chamber of Commerce in China Joerg Wuttke says
- Problem is that ‘on the Chinese side there is the anticipation that we are going to meet halfway, but it’s impossible for Europe to agree to this’, he says
“The summit yesterday is an indicator that maybe we won’t see an investment agreement this year”, Joerg Wuttke, president of the European Union Chamber of Commerce in China, said on Tuesday.
The meeting failed to make any breakthroughs on key issues, such as the EU’s grievances over Beijing subsidising state firms and China’s concerns about EU levels of scrutiny of its investments.
EU officials and business communities have repeatedly said that the substance of the deal, which has been under negotiation since 2013, is more important than meeting the deadline to complete it by the end of 2020.
The Chinese government said in a statement that leaders from both sides agreed to take efforts to reach consensus on the rules of fair competition.
“The problem is that on the Chinese side there is the anticipation that we are going to meet halfway, but it’s impossible for Europe to agree to this,” Wuttke said, adding that the EU was unlikely to compromise on its key demands on subsidies and unfair competition, and that China needed to be more flexible and make more changes.
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But the chamber played down the imminent prospects of such cooperation as the two economies are moving in different directions.
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Jacob Gunter, senior policy and communications manager at the chamber, said nearly half of its members thought that over the next couple of years China’s state firms would benefit to the detriment of the private sector.
“The ‘dual engines’ is a good idea but only if we work out the unsynchronised bits and can choose a common direction,” he said.
Wuttke said the border controls imposed because of the coronavirus pandemic had restricted exchanges of trade, people and information, and the EU was struggling to get its economy up to speed.
“It’s going to take a while,” he said.
He also urged the Chinese government to take steps to stem the recent resurgence in xenophobia in the country in the wake of the new Covid-19 cluster in Beijing.
Towards the end of March and in April, foreigners started experiencing discrimination in restaurants, fitness clubs and hotels, he said.
At that time, most of the new Covid-19 cases in China were described as being “imported”, though that mostly meant infected Chinese nationals returning home from abroad, Wuttke said.
“It faded away a little bit, but now it’s come back at full blast,” he said. “That’s the problem we have since the famous Norwegian salmon popped up.”
Unlike the genuine efforts made to tackle xenophobia in European countries, Beijing offered little but “warm words”, Wuttke said.
“Here it is, basically, pretend it doesn’t exist,” he said.
“The wave [of xenophobia] is back again. I hope it fades away because we feel at home here, we want to work here, we have friends here. We may be foreigners but we are not outsiders.”