According to the German newspaper “Handelsblatt”, the German economic community has increasingly strong reservations about the European-China investment agreement. The Federation of German Industries fears that its China representative office will have to be headed by a Chinese person in the future.
The EU-China investment agreement is a prestige project for German Chancellor Angela Merkel. According to Merkel, the agreement will create a cornerstone of European-Chinese economic relations and bring huge gains to Europe, especially to the German economy, because of the strong participation of the German economy in the Chinese market.
But German industry federations are increasingly skeptical of the agreement because of a clause in the agreement that says the Chinese reserve the right to issue regulations that non-profit organizations will have to be headed by Chinese citizens. The German industry federations fear that their missions abroad may be affected by this. In particular, the German Federation of Mechanical and Plant Engineering is going on the offensive.
The job of the Federation of Mechanical and Plant Engineering’s office in China is to look after our member companies,” said Brodmann to the German newspaper “Handelsblatt”. I can’t imagine how trust protection can be achieved if the outside world allows a Chinese person to lead us.” In a letter to the European Commission, the federation asked for more information about the non-profit clause. The letter said, “We would like to know how this will affect the representative offices of the German Federation of Mechanical and Plant Engineering in Beijing and Shanghai.”
The European Commission has previously noted that the agreement does not create any new obligations for nonprofit organizations. This is because NGOs are engaged in “activities that promote social or political change” and not “economic activities”.
However, this does not guarantee the safety of industrial associations. Their representative offices in foreign countries, although non-profit organizations, are in fact economically active.
The European Commission is trying to address this issue in a targeted manner, with a spokesperson stressing that “the EU-China investment agreement does not stipulate that European trade federations, NGOs and chambers of commerce in China must be headed by Chinese. The EU-China investment agreement does not regulate this type of organization, it only covers the economic activities of companies and investors.” Brussels cannot exclude the possibility that Beijing will stipulate in the future that management positions will be given to Chinese people. If this happens, it will have nothing to do with the EU-China Investment Agreement.
The future of the EU-China investment agreement is increasingly being shaken. The EU Parliament must approve it for the agreement to enter into force. But since China imposed an entry ban on several EU parliamentarians, there has been resistance to the agreement in Europe. Discussions about the NPO clause have increased European resistance to the deal. The EU Parliament will decide Thursday to put the approval of the investment agreement aside for now.
The German government is sticking to the deal despite growing tensions between China and Europe. Although the agreement still has a long way to go before it is ratified, Germany still supports it in principle, according to the German Foreign Ministry. It is important to emphasize that the agreement strengthens China’s international obligations. However, China’s sanctions against European parliamentarians make the EU ratification process difficult.
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