China pledges expanded trade with EU but stops short on market access concessions
- Virtual summit between Chinese President Xi Jinping and leaders of European trading bloc leaves much work still to do
- Focus on investment treaty derailed by exchange on human rights record including Hong Kong and Xinjiang
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But, in a press conference after the virtual meeting, European Commission President Ursula von der Leyen could hardly conceal her disappointment – mirroring the bloc’s harder stance towards China on a range of issues. “I want to caution that a lot – a lot – still remains to be done,” she said, citing market access and sustainability.
“With market access, it is not a question of meeting halfway, it is a question of rebalancing the asymmetry and a question of openness of our respective markets,” she said. “China has to convince us that it is worth having an investment agreement.”
An agreement between the EU and China aimed at creating a level playing field and removing market access barriers for European investors in China is supposed to be concluded this year. Xi agreed to “expedite” treaty talks to get a deal completed on time and Von der Leyen confirmed that progress had been made on several other fronts, including state subsidies and state-owned enterprises.
“Progress on the comprehensive investment agreement – even though there are still major obstacles to reaching a deal – is one of the only tangibly constructive developments between the two sides in the last couple of years,” Andrew Small, an EU-China expert with the US-based German Marshall Fund, said.
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China’s most-senior diplomats, Wang and Yang, conclude back-to-back visits to Europe
But he noted: “It feels less and less significant in the context of the wider shifts in the political dynamics between the two sides. The language and tone from the European side is continuing its shift into the new era, in which competition and rivalry are coming to the fore, and the areas of partnership look limited and difficult.”
The exception, Small said, was Angela Merkel, the German chancellor who also attended the summit, “holding out hopes for progress”.
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Mikko Huotari, executive director of the Mercator Institute for China Studies, a Berlin-based think tank, warned European officials against focusing entirely on trade and investment while handling relations with China.
“I don’t think it’s enough to be proud of the fact that the EU is speaking out loud about what they want from China. What they lack is the action plans,” he said. “The structural focus on trade and investment is not enough – the EU needs to wake up from this.”
Without mentioning the US, Xi urged the EU, which refers to China as a “systemic rival”, to respect China’s “peaceful coexistence” with the rest of the world – the first of his four principles for the EU.
“There are no two identical political systems in the world,” Xi told the summit, according to state news agency Xinhua.
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Besides calling for multilateralism and dialogue, Xi also asked the EU to uphold openness when dealing with China, noting the bloc’s recent policies on foreign investment screening, next-mobile 5G technology and “competition policies” – a reference to the proposed restrictions on state-sponsored takeovers of EU assets and businesses.
Xi hit back, saying “every country should first and foremost care about their own business”, according to Xinhua. “We believe the EU can properly resolve its own human rights problems. China does not accept ‘lectures’ on human rights and is opposed to double standards.”
The Wall Street Journal reported that Xi, at this point, began pointing out human rights issues in Europe, including anti-Semitism. EU leaders reportedly pushed back, saying China’s issues were “systemic”.
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European Council President Charles Michel, who was also part of the summit, highlighted those issues during the press conference.
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Noah Barkin, an EU-China specialist at Rhodium Group, said: “The focus on Hong Kong and Xinjiang shows that values are playing an ever greater role in the relationship. European leaders face growing pressure to call Beijing out.
“In the past, human rights issues like these were discussed behind closed doors. Europe’s line on China is hardening.”