China and EU poised to sign long-delayed investment deal

China and the EU appear to have resolved their differences over protecting labour rights in China and are set to sign a long-delayed investment agreement on Wednesday likely to make the economies of the two blocs more interdependent.

The investment talks have centred on opening up Chinese markets for European investment, as well as addressing Chinese practices opposed by the EU concerning industrial subsidies, state control of enterprises and forced technology transfers.

Markets likely to be opened in China include foreign investment in manufacturing including electric vehicles, telecoms and private hospitals. Issues of enforcement and arbitration have been at the heart of the talks.

China is already ranked as the EU’s second-largest trading partner (behind the US), with two-way goods commerce valued at more than €1bn (£908m) a day.

But the political backdrop of the talks, launched in 2013, has changed over the past two years with more revelations about the treatment of Uighur Muslims, and the systematic suppression of free speech in Hong Kong.

The EU-China comprehensive investment agreement has attracted the wrath of the incoming Biden administration in the US, which publicly demanded to be consulted before Brussels went ahead with the deal.

The unusual intervention by the incoming national security adviser, Jake Sullivan, appeared to be echoed by the French government raising objections and demanding clearer clauses outlawing the use of forced labour in China, particularly among the Uighur Muslim minority.

Tom Wright, a senior fellow at Brookings thinktank in Washington, said: “It’s just mind-boggling that the EU would even consider rushing to agree an investment pact with Beijing weeks before Biden takes office after claiming for several years that they wanted transatlantic cooperation on China.”

At a meeting of EU ambassadors on Monday, however, Sabine Weyand, the director general of the commission’s trade department, said Brussels was still aiming to seal the deal, replacing separate member state China bilateral deals before the end of 2020.

It is not clear if the Biden team’s concerns about the pact have been assuaged, but China does not admit that the use of Uighur workers amounts to forced labour.

China appears to have been willing to sign up to language recommended by the International Labour Organisation, and Germany has been keen to see the deal signed before the end of its six-month EU presidency.

With Donald Trump largely decamped to the golf course or repeating false conspiracy theories about his election defeat, and the Biden team not yet installed in the White House, the EU may think this is the ideal moment to assert its independence on its China policy.

One EU diplomat said: “EU ambassadors broadly welcomed the latest progress in the EU-China talks. The council presidency concluded at the end of the meeting that no delegation had raised a stop sign and that the way for a political endorsement was thus cleared.”

The Chinese foreign ministry spokesman, Wang Wenbin, said on Tuesday major progress had been made in recent days, and the deal would benefit both sides.

However, the Polish minister for foreign affairs, Zbigniew Rau, urged the EU not to rush things and said it should cooperate more with Washington.

A video conference between Ursula von der Leyen, the president of the European commission, Charles Michel, the president of the European council, and Xi Jinping, the Chinese president, should seal the agreement definitively.

Members of the European parliament have to ratify the agreement, and have in the recent past passed resolutions condemning the use of forced labour in China.

Raphaël Glucksmann, an MEP from the group of the Progressive Alliance of Socialists and Democrats, quoted in Le Monde, asked:“[are] the commission and the member states content with words, with promises which do not commit the Chinese leaders in any way? Will we be able to ensure the implementation of this commitment? Will it be possible to go and verify, in the field, that the camps are closed, that there is no forced labour? It would not be the first time that a dictator signs an international text without respecting it.”