China Briefing | China-EU trade deal strengthens Beijing’s hand in power game with the US

Concluding the talks while its reputation is taking a battering in the West, and before President-elect Biden takes office, is a clear diplomatic win for China

Beijing’s membership in trade blocs such as the RCEP, which excludes Washington, also puts it in a position to exert economic influence in Asia

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The China-EU deal was nearly seven years in the making. Photo: AFP

Published: 9:30am, 2 Jan 2021Updated: 10:31am, 3 Jan 2021

The landmark investment treaty China and the European Union struck on Wednesday was nearly seven years in the making, giving the distinct impression of long, drawn-out negotiations.

Indeed, for much of the previous six years, Beijing had dragged its feet and instead focused on satisfying Washington’s demands, leaving Brussels increasingly weary and frustrated.

But dynamics have changed since the beginning of last year, when Beijing finally began substantive discussions in earnest, and from July it accelerated the pace of talks. Over the past five months, Chinese negotiators reportedly underwent a role reversal, aggressively pursuing their European counterparts for breakthroughs so both sides could clinch the deal by a year-end deadline mutually agreed in 2019.

The fact that Beijing was able to make enough concessions and wrap up the talks in a mere 10 months, after years of procrastination, says a lot about China’s reimagined diplomatic priorities for a post-Covid-19 world.

European Commission President Ursula von der Leyen, European Council President Charles Michel, German Chancellor Angela Merkel, French President Emmanuel Macron and Chinese President Xi Jinping approve an investment pact between China and the European Union on December 30. Photo: AFP

President Xi Jinping certainly had Washington in mind on Wednesday when he said that in the new year, China and Europe – as two major global forces, markets, and civilisations – should demonstrate a sense of responsibility and take active steps to contribute to world peace and progress. Xi confirmed the deal over video links with EU leaders including German Chancellor Angela Merkel, French President Emmanuel Macron, President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen.