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China-EU investment pact signed, but not yet closed, analysts warn
A deal may have been reached, but there are still huge uncertainties ahead for China’s new investment deal with the European Union, from security reviews to power shifts in the EU, a prominent Chinese academic Liu warned on Monday. Luxin, an international relations expert at Renmin University in Beijing, said amid the celebrations there were reasons for concern over the comprehensive investment agreement signed by Beijing and the bloc last week. “Rather than being an end point, the China-EU Comprehensive Investment Agreement is a new beginning for China’s” economic diplomacy, “he wrote in China Economic Diplomacy Watch, an online magazine on WeChat, a social media platform. Get the latest insights and analysis from our global impact newsletter on the great stories originating in China. “While applauding the completion of the investment deal negotiations, we also have reason to be sober and calm about the future development of China-EU trade and economic relations.” China-EU investment deal: who is the real winner after seven years of negotiations? Beijing has touted the deal as a strategic advance in its fierce geopolitical competition with Washington, a rivalry that has escalated on several fronts, from trade and technology to the military. But Liu said several factors, including The prospect of a new transatlantic alliance and the withdrawal of German Chancellor Angela Merkel would add uncertainty to the fate of the investment pact after this year’s elections and its departure “would certainly affect the political ecology of the EU,” Liu wrote. The United States has also indicated that it could try to work with the bloc to pressure China, with Jake Sullivan, security National adviser to US President-elect Joe Biden said the United States “would welcome early consultations with our European partners on our common concerns about China’s economic practices.” China-EU Investment Agreement: Joe Biden Repeats Call for a “ Coordinated Approach ” to Manage Beijing Additionally, the agreement must be ratified by EU governments and the European Parliament as a replacement for 26 bilateral investment agreements between China and EU members, a process that is unlikely to be completed until 2022. Under the new umbrella, European companies would have unprecedented access to the manufacturing, shipping, aviation, IT, telecommunications, healthcare and finance industries. Beijing vowed to ensure that EU companies could compete more evenly playing field in China, with rules against forced technology transfer, one of the biggest sticking points in the seven years of talks. For the first time, the parties also agreed to ambitious provisions on sustainable development, including commitments on forced labor and the ratification of relevant conventions of the International Labor Organization. In return, Chinese companies will have the same access as their pean counterparts when investing in the EU, with the removal of special restrictions on Chinese state-owned companies and political barriers created by security review systems for foreign investment. But Liu warned that Chinese investment would still face barriers in Europe, largely due to “security exceptions” throughout the pact. “Even after the deal is reached, China will still have to pay attention to changes in the EU’s foreign investment security review regime,” he wrote. “Therefore, there is considerable uncertainty about the China-EU investment agreement.” China-EU investment deal: Beijing gives in on human rights, but will it change unions? There are also reasons for caution in Europe, according to Mikko Huotari, executive director of the Mercator Institute for China Studies, a Berlin-based think tank. In the German Handelsblatt newspaper on Thursday, Huotari said there was still a question mark on how Beijing would guarantee promised market access for European companies. “From Beijing’s point of view, China’s broader openness is subordinate to other political goals that are at the heart of European competitiveness,” Huotari wrote. Ineffective enforcement mechanisms and China’s track record of complying with international commitments cast doubt on the viability of the entire deal. “South China Morning Post’s Kinling LoMore Additional Reports: * China-US Trade War: The Biden will address EU differences and ‘then take on Beijing’ * All EU member states back China’s investment deal, sources say ct Joe Biden calls for stronger trade coalitions against China as EU appears to Close to a deal This article will sign the China-EU investment pact, but it has not yet been closed, warn analysts who first appeared on South China Morning Post for the latest news from the South China Morning Post download our mobile app. Copyright 2021.
