Beijing’s top diplomat in Brussels on Monday accused the European Union of creating a regulatory environment that is hostile to Chinese companies, even as China and the EU try to finalise a major investment deal by the year’s end. EU representatives hit back, defending a new “realist” approach towards China, saying defensive measures were necessary to combat China’s perceived flouting of World Trade Organization (WTO) rules. Zhang Ming, China’s ambassador to the EU, who joined a parliamentary exchange via teleconference, repeated Beijing’s promise that its “resolve to promote reform remains unchanged”. “The EU policy measures on 5G, foreign direct investment screening, government procurement and competition rules have already dampened the confidence of Chinese companies,” Zhang said. He also said that the EU was becoming more insular as China was successfully working to open its economy. “Some are saying that Europe is already quite open, and the ball is in China’s court to rebalance the economic and trade relations. Yet, to forge an open just and non-discriminatory regulatory environment, both sides need to move in the same direction, and neither should stop or even backslide,” he said. As an example, Zhang questioned restrictions on Chinese companies that receive state subsidies. The EU officials said it was merely an extension of rules already applied to all companies inside the EU single market. His comments encountered EU officials who complained about “promise fatigue” after seven years of investment talks. The potential EU-China deal, which has a self-imposed deadline of the end of this year, aims to make it easier for European companies to get access to the Chinese market. EU officials have insisted that its protective measures are a response to China’s long-standing non-compliance of WTO rules. Most notable are the barriers to market access, such as forcing most foreign businesses to form joint ventures to operate in China. Gunnar Wiegand, Asia managing director at the European External Action Service, the EU’s diplomatic service, said: “How many companies can operate in China outside a joint venture? How many European researchers can access China’s top research programmes?” Wiegand said Europe had taken a more “realist” approach to China after the coronavirus and its imposition of a controversial national security law in Hong Kong. Ursula von der Leyen, head of the European Commission, complained about a lack of Chinese commitment on market access after a virtual summit with Chinese President Xi Jinping last week . But German Chancellor Angela Merkel said after the same summit that China had shown a “political will” to resolve the differences at the highest level. She had previously said she would “continue to seek dialogue and conversation” with China and that ties relations with Beijing were important to the European Union. Wiegand, however, said that just because Europe was forging its own path amid the US-China rivalry it did not mean the EU treated China the same as the US . “For the EU, while we maintain close relations with China and the US, we are unequivocally not equidistant,” Wiegand told lawmakers and Zhang. “The transatlantic relationship runs close and deep – whatever the policy differences may be.” Pompeo and top EU diplomat to discuss ‘shared concerns about China’ Wiegand also responded to a question from a lawmaker on whether the EU would have to change its “one-China policy” if mainland China invaded Taiwan. “Under the EU’s one-China policy, we recognise the People’s Republic of China as the sole legal government of China,” Wiegand said. “But we also pursue friendly relations and close cooperation with Taiwan in a wide range of areas.” “The EU-Taiwan relations remain excellent,” he added. Zhang went on the offensive after receiving a barrage of questions on Xinjiang, Hong Kong and Taiwan, saying: “Some MEPs [members of the European Parliament] have little knowledge about China.” A less tense moment came as Zhang answered a question on Wolf Warrior diplomacy, a reference to the strategy by some Chinese diplomats to defend Beijing’s national interests aggressively and antagonise their counterparts abroad. “Do you regard me as a wolf or as a Chinese panda?” he said.