No breakthrough at China-EU summit

September 16, 2020 06:00
Photo: Reuters

There were no breakthroughs at Monday’s China-European Union summit and the two sides will not sign this year an investment treaty they have been negotiating since 2013.

The virtual summit brought together President Xi Jinping and Prime Minister Li Keqiang with Charles Michel, European Council President, European Commission President Ursula von der Leyden and German Chancellor Angela Merkel. They discussed climate change: economic and trade issues: international affairs and human rights: and COVID-19 and economic recovery.

Von der Leyden described the talks as “frank and open … constructive and intense”, a diplomatic way of saying conflict. “Europe needs to be a player, not a playing field,” said Michel.

China’s Foreign Ministry said that the meeting “enhanced mutual understanding and trust and injected new impetus into the further growth of China-EU comprehensive strategic partnership.” Xi said that China was a “partner, not a rival” of the EU. “Co-operation far outweighs competition and consensus far outweighs disagreement,” Xi said.

Behind these polite words is a relationship which has deteriorated this year, over trade, human rights and China’s “Wolf Diplomacy”, which has angered many European governments and people.

In the latest example, on Saturday, China announced a ban on pork imports from Germany, after it reported its first case of African swine fever. Germany is China’s third-biggest supplier of pork products, after the US and Spain. Germany’s Ministry of Agriculture said that it had asked Beijing to impose the ban only on regions affected by swine fever, as is the case in the EU.

It was an astonishing decision, just two days before the summit. Germany holds the chair of the EU until the end of 2020, is China’s most important economic partner in Europe and Angela Merkel the European leader most engaged in China.

Since 2013, China and EU have held 30 negotiations over the Comprehensive Agreement on Investment (CAI). On this, von der Leyen said that important progress had been made. “A lot still remains to be done, especially on market access issues. The EU would not be willing to meet halfway on market access. China has to convince us that it is worth having an investment agreement.”

Jorg Wuttke, president of the European Chamber of Commerce in China, said that there had to be an agreement this year. “China is facing more and more political headwind in EU states, not least because of human rights violations. This makes an agreement more and more difficult.

“Fair conditions of competition are already in place in Europe, both domestic and Chinese companies. This is still not the case in China,” he said. “We are an open market economy, but China is closed. It is up to Beijing to close the gap. I still see a pretty big gap. If it is not a robust, comprehensive agreement, then we better not have one.”

Human rights have forced their way onto the bilateral agenda. Before the summit, 63 members of the European Parliament wrote an open letter to Michel, von der Leyen and Merkel, asking them to “substantially” address “widespread serious and ongoing human rights violations occurring in the PRC, including Xinjiang and Hong Kong.” They were discussed at the summit.

In another sign of how human rights has entered the corporate agenda, Joe Kaeser, CEO of the Siemens Group, said that his firm was watching the current developments in Hong Kong and Xinjiang carefully and with concern. “As long as Beijing adheres to the one country, two systems agreement, German business can handle it,” he said in an interview with the Die Zeit newspaper. “But it is indeed unusual that this understanding has not been clearly confirmed by China for some time.”

On Xinjiang, he said; “we categorically reject any form of oppression, forced labour and involvement in human rights violations.”

It is extremely rare for a foreign CEO to speak publicly on China’s human rights. Normally they avoid politically sensitive topics. Siemens has been doing business in China for more than 140 years and employs 35,000 people there. It is the company’s second largest foreign market.

His decision to speak publicly reflects pressure from German politicians, the public and company shareholders.

Josep Borrell, EU High Representative for Foreign Affairs and Security Policies and Vice-President of the European Commission, said: “The relationship with China is more difficult today than after the decision they took in Hong Kong (the National Security Law). It has consequences. Our relations will be difficult until we reach a level playing field and the principle of reciprocity on market access.”

In its annual report issued last week, the European Chamber of Commerce in China said European companies in the country were increasingly afraid of “arbitrary punishment” amid a more politicised business environment. “They are excluded from key sectors of the economy. Companies are left navigating a political minefield during a health crisis of truly overwhelming proportions. Deteriorating relations between China and Europe could seriously impact European companies doing business in China.”

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A Hong Kong-based writer, teacher and speaker.