Dashed hopes? The Chinese Communist Party has made a mistake…

Recently, the European Parliament voted overwhelmingly to freeze the China-EU Investment Agreement. The Chinese Communist Party had put in nearly seven years of negotiation efforts for this agreement. According to Japanese media, this move by the European Parliament has sent shock waves throughout China, and the event is considered the most important event of the Xi Jinping era.

In late May, the European Parliament voted 599 in favor, 30 against and 58 abstentions to freeze the discussion and approval of The Comprehensive Agreement on Investment (CAI) between China and Europe.

The CAI has been under negotiation for seven years and had been at an impasse for years. At the end of last year, the negotiations were finally completed under the EU presidency of German Chancellor Angela Merkel.

Xi Jinping intervened directly at the time, making major concessions in several key areas such as market access and fair competition, and the two sides announced the completion of the negotiations. Beijing at the time trumpeted the agreement as a huge victory for it on the international political stage.

The Nikkei Asian Review analysis said the European Parliament’s freezing of the China-EU Investment Agreement was seen as a setback for Xi Jinping, sending shock waves throughout China, and it happened just over a month before the Communist Party’s centennial and was seen as the most important event of the Xi Jinping era.

Some party members fear that the centennial atmosphere will be weakened by harsh diplomatic realities, the report said. Not only does the Communist Party have poor relations with the United States, but now relations with the European Union are also in trouble. Xi Jinping does not seem to have many cards to play to salvage the situation either.

On May 17, Chinese Premier Li Keqiang also held a phone conversation with the Italian prime minister, saying Both sides should work together to ensure the early signing and entry into force of the China-EU investment agreement.

But Li’s and others’ urging did not yield any results. The European Parliament still voted to freeze this agreement as scheduled.

German lawmakers: China’s Communist Party played the wrong game

International public opinion believes that the Chinese Communist Party wants to pull European countries together and isolate the United States through this agreement. At the same time, the agreement has been criticized for its lack of human rights norms.

Some analysts say the prospect of a comprehensive investment agreement between China and Europe is overshadowed by the deterioration of Sino-European relations at this crucial moment.

Reinhard Buetikofer, a member of the European Parliament from the German Green Party, said that the Chinese side would love to reach an EU-China investment agreement, but they have made a mistake and underestimated the European Parliament’s determination to defend European interests and values.

Lotte Leicht, director of Human Rights Watch’s EU branch, also said Beijing has retaliated and imposed sanctions on EU parliamentarians and organizations. But today the European Parliament said it had had enough of the bullying by the Chinese Communist Party and froze the EU-China investment agreement.

The EU announced sanctions against four Chinese Communist Party officials and one entity for human rights violations in Xinjiang on March 22. Later, the Chinese Communist Party announced sanctions against European parliamentarians, academics and think tanks. The move sparked strong discontent in the EU. At the time, some lawmakers said they wanted to block the China-EU investment agreement.

Lithuania’s withdrawal from the 17+1 threatens to trigger a domino effect

In addition to the freeze on the China-EU Investment Agreement, on May 22, Lithuania, a member of the European Union, announced its withdrawal from the 17+1 cooperation framework, dealing another blow to the Chinese Communist Party’s diplomatic efforts in Europe.

According to Nikkei’s analysis, Lithuania’s withdrawal from the 17+1 cooperation framework was based on the consideration that as an EU member state it could deal with the CCP more effectively, rather than allow itself to be trapped in the pro-communist 17+1 meetings. Thus, they have chosen to get rid of the influence of the Chinese Communist Party.

Lithuania’s move could affect Estonia, Latvia and other 17+1 members. On May 20, the Lithuanian parliament passed a resolution by a majority vote accusing the Chinese Communist Party of “genocide” against the Uighurs in Xinjiang.

Another Nikkei report said that the lack of progress on promised Chinese investments in many countries has added to the frustration of Central and Eastern European countries. Chinese Communist Party firm China Guangdong Nuclear Corporation had agreed to invest in and expand a nuclear power plant in Romania, but the plan was put on hold for several years, with Romania scrapping the deal in 2020 and signing an agreement with the United States.

The report said that enthusiasm for the Communist Party has now cooled in much of Central and Eastern Europe, with human rights issues and a stalled China-Europe investment agreement causing some countries to turn to the United States, which has alarmed Beijing.

The report also found that a new divide between the Communist Party and several countries is emerging, something the outside world has not seen before.

The United States, Japan, Britain and other G-7 members and the European Union, India, Australia and other countries are now watching the CCP and keeping a distance to observe. While all eyes are on China, meaningful direct dialogue with China has stalled in many respects.

The only response from the Chinese Communist Party seems to be to double down on “war-wolf diplomacy,” the report said. As Xi Jinping seeks a successful re-election, he will not bother to acknowledge diplomatic failures. As a result, no major reversal in relations between the CCP and the West is imminent. The current stalemate could become the “new normal” for Western diplomacy toward Beijing. Xi’s dilemma remains great.