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Wendy Wu

Despite a recent charm offensive by senior Chinese diplomats, the chances of wrapping up a landmark investment deal with the European Union remain uncertain, analysts said.
Beijing is facing pressure to address European concerns, but one observer warned that making a commitment to structural changes, a key condition, risked triggering demands for further reforms from the United States.
Yang Jiechi, the head of the Communist Party’s foreign affairs office, will travel to Greece and Spain next week, and possibly also Portugal. His trip follows foreign minister Wang Yi’s recent visit to Italy, the Netherlands, Norway, France and Germany.
The rare back-to-back trips come at a time when the US is pushing for support from its European allies over its stance towards China.
China’s top diplomats in ‘unprecedented’ back-to-back Europe trips amid tensions with US
Europe has criticised China’s handling of the Covid-19 outbreak, its increasing combative diplomacy, its human rights records and the Hong Kong national security legislation.
It is also under pressure from Washington to reconsider whether to allow the Chinese telecoms giant Huawei to build 5G networks.
Chinese President Xi Jinping will take part in a virtual summit with European leaders on September 14.
Joerg Wuttke, president of the EU Chamber of Commerce in China, said: “President Xi has a lot of political capital at stake in the September summit. If the investment talks do not get a push at that time, it will be politically difficult for [German Chancellor Angela] Merkel to discuss China issues at the European Council meeting on September 25, particularly at a time when the US is putting enormous pressure on Europe to fall in line with its position.”
He said a substantial progress in September would make it possible for “a successful conclusion to a political agreement to the investment deal” in December.
A European diplomatic source, speaking on condition of anonymity, said the investment treaty would be a “test case” for the two sides’ relationship.

In the previous two rounds of negotiations China was open to discuss core issues such as state-owned enterprises, subsidies and sustainable development, but there is no clear evidence that it has acted to address the issues, the source continued.
They said China has yet to address concerns about state-owned businesses and noted that Beijing faced difficulties in improving transparency about local-level subsidies.
Wang Yiwei, a professor in European studies at Renmin University in Beijing, said China had recently published a three-year trial plan to open cross-border data flow and other service sectors in selected cities, which he said was a sign of its determination to open up and attract foreign investment.
Beijing also hopes the EU will commit to market openness in the hi-tech sector, including 5G contracts, although Wang said that risked a backlash from the US.
“The US has closely followed the progress of China-EU investment talks. Any commitment Beijing agrees on structural changes, such as SOE protection and subsidies, is likely to be met with tougher demands from the US,” Wang said.
China-EU investment deal: exit of European trade commissioner adds uncertainty to landmark talks
The US has long called for changes to China’s state-led economy, but the phase one trade deal between the two sides sidestepped the issue.
“China should consider all factors in negotiations with the EU and try to avoid getting on America’s nerves,” said Wang.
But observers warned that if a deal cannot be reached this year, China may find itself in a more difficult situation in the future, with Merkel due to leave office next year.
“China has a very trustworthy counterpart in Europe with Angela Merkel. The Chinese side knows exactly where she stands and they have 15 years of experience working with her,” said Wuttke.
Germany currently holds the EU’s rotating presidency and Merkel has shown “the political finesse and power to get things agreed upon in Europe” he continued.
“It is therefore very much in China’s interests to move on the investment agreement now, and not delay things until January next year when Portugal takes over the EU presidency”.
The EU has now free trade agreements with over 70 countries. It concluded a free-trade agreement with Japan last summer, and signed a free trade and investment protection deal with Vietnam in June and is now in talks with India.
It has declined Beijing’s proposal to start talks on a free-trade agreement and insists on finishing the investment treaty talks first.


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European Union

Why China’s diplomatic push may not be enough to secure EU investment deal

The EU sees reaching an investment deal as a priority. Photo: Shutterstock

Chinese State Councillor for EU - CHINA High Level Strategic Dialogue Yang Jiechi looks on as he talks to the media following a meeting at the European External Action Service building in Brussels, June 10, 2016. / AFP PHOTO / THIERRY CHARLIER

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Norway's Foreign Minister Ine Eriksen Soreide (R) makes a corona greeting as she welcomes Chinese Foreign Minister Wang Yi (L) to Norway. Photo: EPA-EFE

epa08629858 Norway's Prime Minister Erna Solberg (R) welcomes Chinese Foreign Minister Wang Yi (L) during a short courtesy visit in Oslo, Norway, 27 August 2020. The visit is part of a round trip to several European countries. EPA-EFE/HEIKO JUNGE NORWAY OUT

Chinese Foreign Minister Wang Yi (at left) and Norwegian Foreign Minister Ine Eriksen Søreide at a press conference after political talks they had earlier in the evening in Oslo on Thursday. Photo: NTB scanpix via AP

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A free-trade agreement is expected to be on the agenda when Chinese Foreign Minister Wang Yi holds talks in Norway. Photo: EPA-EFE

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Italian Foreign Minister Luigi Di Maio (right) and his Chinese counterpart Wang Yi during a joint press conference after their meeting in Rome on Tuesday. Photo: EPA-EFE

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Chinese Foreign Minister Wang Yi and Italian Foreign Minister Luigi Di Maio after their meeting at Villa Madama in Rome on Tuesday. Photo: EPA-EFE

Nathan Law protesting outside the Italian Ministry of Foreign Affairs, August 25, 2020. Photo: Stuart Lau

epa08625002 Italian Foreign Minister Luigi Di Maio and his Chinese counterpart Wang Yi (L) during a joint press conference after their meeting at Villa Madama in Rome, Italy, 25 August 2020. Wang Yi met Di Maio as he embarked on a European tour. The two minister's talks ranged from China's Belt and Road Initiative (BRI), or 'New Silk Road', to post-COVID scenarios, diplomatic sources said. EPA-EFE/MASSIMO PERCOSSI

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Senior officials are touring various European countries ahead of next month’s virtual summit
The two sides are trying to reach an investment treaty by the end of the year, but diplomatic sources say Beijing has yet to address a range of concerns



Senior officials are touring various European countries ahead of next month’s virtual summit.


Why China’s diplomatic push may not be enough to secure EU investment deal

Senior officials are touring various European countries ahead of next month’s virtual summit The two sides are trying to reach an investment treaty by the end of the year, but diplomatic sources say Beijing has yet to address a range of concerns

Senior officials are touring various European countries ahead of next month’s virtual summit

The two sides are trying to reach an investment treaty by the end of the year, but diplomatic sources say Beijing has yet to address a range of concerns