EU bids for greater access to Chinese markets

Struggle to balance trade priorities with concerns over Hong Kong

European Union chiefs bid to convince Beijing to bring about fairer treatment of foreign companies on Monday in the first formal talks since a cooling in relations during the coronavirus pandemic.

The European Commission is acutely aware of the importance of Chinese trade for any economic recovery from the deep slowdown caused by the virus.

But a disinformation campaign by Beijing about the origin of Covid-19 and increasingly assertive power politics on issues such as Hong Kong have made it awkward for Brussels to balance its trade agenda with its foreign-policy principles.

European Commission president Ursula von der Leyen attempted to bridge the issues in a video conference with Chinese prime minister Li Keqiang, which was followed by exchanges with Chinese president Xi Jinping.

"EU-China relations have evolved in recent years. Our economic interdependency is high, and we must work together on global challenges like climate action, meeting the sustainable development goals or dealing with Covid-19," European Council president Charles Michel said after the meeting.

“Engaging and co-operating with China is both an opportunity and necessity. But, at the same time, we have to recognise that we do not share the same values, political systems or approach to multilateralism. We will engage in a clear-eyed and confident way, robustly defending EU interests and standing firm on our values.”

The European Union has been negotiating an investment agreement with China since 2014, and both sides have expressed a desire last year to conclude talks in 2020. A major Brussels-Beijing summit had been scheduled for this year to mark 45 years of trade relations, but was postponed due to the pandemic.

The commission believes that while the EU single market is open to Chinese firms – which have on occasion aggressively bought up promising companies and technologies and are thought to operate with state backing – this has not been reciprocal, meaning EU companies cannot compete fairly.

”What is needed to break the deadlock is engagement at high political level and that is what today’s summit will hopefully provide,” a European Commission official said ahead of the meeting.

Global co-operation

As one of the world’s major producers of carbon, a leading investor in renewable energy, and a signatory of the Paris climate accord, China is also crucial for the EU’s ambitions for global co-operation to turn around climate change before catastrophic results.

The EU has described China as a systemic rival, while insisting it would not be drawn in to the trade war between the United States and Beijing. Ahead of the talks, Li Keqiang said the EU and China were partners more than competitors.

Brussels also sees Beijing as a potential ally in its bid to reform the World Trade Organisation, which has been largely disabled by obstruction from the US administration of President Donald Trump.

Mr Michel said that as well as asking China to engage on the WTO issue, he had also brought up Beijing’s imposition of a security law on Hong Kong that threatens to undermine the territory’s autonomy.

“We expressed our great concerns about the proposed national security law for Hong Kong,” he said after the talks, adding that the bloc called on Beijing to ensure political pluralism, democratic standards and human rights.

Naomi O’Leary

Naomi O'Leary

Naomi O’Leary is Europe Correspondent of The Irish Times