China Investment Deal Seen as Test of EU Cohesion

An investment deal agreed to in principle between the European Union and China at the end of last year is facing criticism both in and outside the EU. Analysts point to the expected approval of the deal as evidence of Beijing’s uncanny ability to assess the power game within the EU.“If you look at China’s policy, as far as we can tell, over the last decade, toward Europe, they’re very much about dividing Europe into different sections — Central and Eastern Europe [as one bloc], Germany and France and Britain when Britain was still part of the EU [as another bloc], very much focused on appealing to these countries’ national economic self-interest. You know, it’s worked,” said Didi Kirsten Tatlow in a phone interview. Tatlow is a senior fellow in the Asia Program at the German Council on Foreign Relations in Berlin.Tatlow cited China’s handling of its relationship with Germany as a case in point.FILE PHOTO: China’s President Xi Jinping meets German Chancellor Angela Merkel at the Great Hall of the People in Beijing, China, May 24, 2018.“They’ve been focusing on Germany for a long time,” she said. “I don’t think China has bottomless pockets, I think it’s very, very good at playing its cards.”Beijing, she said, not only “opened its doors to car and all kind of other German manufacturers,” it has also given Berlin unusual political access. “Let’s remember Germany is the country in Europe that has had these so-called ‘cabinet meetings’ with China for years now,” adding that participation in the meetings as seen as a “high-level honor” by some.In addition to successfully cultivating ties with major powers such as Germany and France, Tatlow said, Beijing has used all the tools at its disposal, including market access, to lure other countries into its orbit. As an example, she cited China’s decision to ink a deal with Slovakia on meat exports shortly before a Beijing-hosted summit with 17 Central and Eastern European countries this week.Even so, uneasiness about getting too close to Beijing has been fermenting among EU member states, Tatlow and others say. Whether that will lead one of the 27 member states to veto the investment agreement with Beijing is still uncertain.”In theory, it only takes one country to veto the deal,” said Jakub Janda, director of the European Values Center for Security Policy, based in Prague.But, he said in a phone interview, the small and medium-sized EU countries may be reluctant to use that power because they need support from Germany and France on other core interests, such as EU agricultural subsidies for Poland, or German backing of the Baltic states in their relationship with Russia.Janda regrets that the EU, under Germany’s leadership, failed to use the negotiations on the investment deal to advance its democratic values and support for human rights, especially since Beijing’s strong desire for a deal gave the EU leverage.The EU insists there are other mechanisms in place to discuss human rights, but Janda believes Beijing will take political concerns seriously only if they are linked to trade — an area that matters to it.“If you only raise the human rights issue through the EU-China human rights dialogue channel, and you tell China what you’re doing in [Xinjiang] is genocide of the Uighur people, the response you’ll get is, ‘No, we’re not.’ And that’s that.”Speaking to an international audience gathered at the Atlantic Council, a think tank in Washington, Charles Michel, president of the EU Council, defended the investment deal.FILE – European Council President Charles Michel is seen on a screen as he speaks with EU leaders during an EU Summit video conference, amid the coronavirus disease (COVID-19) outbreak, at the European Council building in Brussels, Nov. 19, 2020.“The relationship with China is an important question in Europe,” he said, suggesting that through dialogue, the EU could help pressure the Chinese government on human rights. He also credited the investment deal with bringing down certain barriers for EU companies doing business in China, including requirements on joint ventures.Still, the EU leadership’s support for the investment deal has come under fire in civil society. The proposed pact “further entrenches Europe’s existing strategic dependency on China and runs counter to Europe’s core values,” says a widely circulated open letter signed by academics, human rights activists and former politicians.Citing the Chinese leadership’s “insistence on the centrality of the Chinese Communist Party in all parts of China’s economic and social life,” the signatories wrote that “the agreement and the hopes attached to it are products of a bygone era” when there were more legitimate hopes for Chinese liberalization from within.

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