On December 31, 2020 (Beijing Time), Xi Jinping, general secretary of the Communist Party of China (CPC), announced the completion of the agreement with European leaders including European Commission President Michel von der Leyen, German Chancellor Angela Merkel, French President Emmanuel Macron and European Council President Charles Michel by video link.
The Hong Kong-based South China Morning Post reported on Friday (January 8) that 11 hours before the EU-China investment agreement was agreed, Chinese Communist Party authorities wanted to insert penalties for a ban on huawei from EU countries that would restrict access for Huawei and other Chinese telecom companies to certain interests in the bloc. But it was rejected by EU representatives.
According to a draft text of the EU-China investment agreement obtained by the media, Beijing does not want to offer telecoms benefits to companies in EU countries that restrict Chinese telecoms firms.
That clause was eventually removed by EU negotiators, in what senior EU officials said was a “classic” tactic used by the Chinese in negotiations.
The article appeared in a draft negotiating text on December 11 but was struck out by EU negotiators, the report said. A comparison with the bilateral investment treaty that the two sides finalized a few weeks later suggests that this provision did not make it into a final deal.
The EU-China investment agreement, which took seven years to negotiate, aims to provide better market access and trade terms for European companies in China.
Xi Jinping, general secretary of the Communist Party of China (CPC), announced the completion of the agreement by video link with European leaders including European Commission President Michel von der Leyen, German Chancellor Angela Merkel, French President Emmanuel Macron and European Council President Charles Michel.
German Chancellor Angela Merkel has been the main promoter of the pact, pushing EU countries to finalize the years-long EU-China investment treaty despite criticism from many quarters. Germany currently holds the rotating presidency of the European Council.
The agreement is expected to give European companies better access to the Chinese market and improve competition conditions. Companies such as Germany’s big carmakers would benefit more.
But the deal has drawn criticism not only from the United States, but also from the extent to which it will benefit European companies and its disregard for human rights in China.
As an example, the investment agreement offers European companies 50 percent ownership of Internet data centers, provided they have a license to host cloud computing in China, the report said.
That means European companies will still not be able to acquire 50 per cent ownership of Internet data centres in China if the Communist authorities do not approve the licences. Permits have long been one of the Communist Party authorities’ main tools for limiting foreign companies’ access to the Chinese market.
And a footnote to the clause says: “China reserves the right not to open the service to state investors who, by law or policy, obstruct or discriminate against Chinese telecommunications companies.”
The footnote was highlighted in yellow and underlined with a blue line after sources said the abrupt change was completely unacceptable to the EU.
The provision has been interpreted to mean that the Communist Party authorities will freeze cloud computing access for companies from European countries if they do not allow party-controlled companies like Huawei to access their 5G networks.
The draft document is not a final agreement, and sources close to the talks said a final text confirmed by Xi and the EU leaders could be released early next week.
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