The European Union and The Communist Party of China (CPC) on Wednesday announced the conclusion of a comprehensive bilateral investment treaty, ending seven years of bitter negotiations. But observers say it is doubtful that the deal will materialize as Mr Xi is forced to compromise in order to unravel the ALLIANCE and respond to US pressure.
From the EU’s point of view, the pact has helped the BLOC make some major progress. The agreement aims to remove barriers to Chinese investment in some EU industries, including new energy vehicles, cloud computing services, financial services and healthcare.
The Wall Street Journal said Wednesday that Europe has long pushed for greater access to the Chinese market, allowing European companies to compete on a more level playing field with Their Chinese counterparts. At the very least, document the requirements in the form of a contract. It also forced Beijing to pledge that EU companies would no longer be forced to trade technology for markets and that Chinese companies would be more transparent about the subsidies they receive.
‘For the first time, the INVESTMENT treaty will require state-owned enterprises to meet their obligations and increase the full transparency of subsidies,’ the European Commission said in a statement. In addition, China agrees to continue its efforts to ratify the Basic convention of the International Labour Organization on forced Labour.
The EU-china investment agreement still needs formal approval from all 27 EU member states and the EU parliament before it can come into force. The approval process could take months. The EU argues that the benefits to the EU would be comparable to those offered to the US under the US-China phased trade agreement. The U.S.-China trade agreement enters into force in early 2020.
But critics point out that even if the EU can reap short-term commercial benefits from the deal, the eu and China’s two largest economies will be linked by the agreement, which will help the authoritarian Chinese state play an increasingly important role in developing its economic power.
U.S. officials have expressed concern that the agreement could help Beijing defuse western pressure on China to change its state-dominated economic model. Critics say Beijing is giving in to the EU in part because it wants to divide the relationship between Brussels and Washington.
U.S. President-elect Joe Biden has said one of his top priorities as president will be to strengthen The United States’ alliances and coordinate efforts against China. Jake Sullivan, Mr Biden’s choice for national security adviser, said last week that he hoped the EU would not rush to sign the investment deal with China.
Eu officials say the agreement will not weaken Western unity.
“The China-Eu Investment agreement demonstrates China’s determination and confidence to advance high-level opening-up, and will provide greater market access, a higher level of business environment, stronger institutional guarantee and brighter cooperation prospects for mutual investment between China and the EU,” Said Xi Jinping, president of the Communist Party of China, after the agreement was reached.
More recently, talks have been deadlocked over Chinese demands for access to European nuclear power, forced labor and human rights. The Wall Street Journal says German Chancellor Angela Merkel, who holds the rotating presidency of the European Council, is the biggest contributor to breaking the deadlock.
On the Chinese side, Xi Jinping and other top Chinese leaders have intervened to give ground on market access. German and Chinese officials want to complete the talks before the new Biden administration takes office.
The Financial Times said that while it was unclear exactly what kind of compromise had been reached on human rights and Xinjiang, human rights activists were deeply disturbed.
Reinhard Butikofer, head of the European Parliament’s delegation on Relations with China, was quoted as saying in comments published late Tuesday that a “strategic mistake” had been made. In a tweet, Mr. Bitikofer said it was “ridiculous” for the EU to try to portray Beijing’s promises on workers’ rights as “a success.”
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