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The two sides hope to reach a deal by the end of the year. Photo: Bloomberg

China moves to keep EU investment talks on track

  • The two sides have been making slow progress, but vice-premier Liu He’s phone conversation with his European counterparts is seen as an attempt by Beijing to refocus attention on the matter
  • Discussions took place against growing European suspicion of China and its handling of the coronavirus crisis

China is stepping up its efforts to reach an investment agreement with the European Union, with the vice-premier in charge of trade talks calling his counterparts in Brussels on Friday.

Liu He’s conversation with the European Commission’s executive vice-president Valdis Dombrovskis came as officials described the talks, which the two sides hope to conclude this year, as making slow progress.

Liu’s call, his first in a year, also coincides with a hardening of attitudes towards China in some parts of Europe as a result of its handling of the Covid-19 outbreak.

The disease has now killed more people in Europe than in China, according to official figures.

Some European diplomats suspect that Liu He had been prioritising trade talks with the US until recently. Photo: AFP

Liu, who has also been in charge of China’s trade talks with the US, is suspected of downplaying the talks with the EU to focus on China’s response to the trade war.

His latest engagement with the EU is a sign that Beijing is refocusing attention on Brussels after reaching a phase one deal with the US, according to one EU diplomat who spoke on condition of anonymity.

Describing the call as “useful”, Dombrovskis said in a tweet: “We remain committed to finalising negotiations on an ambitious EU-China investment agreement this year. We will continue to work together to make this agreement a reality.

Coronavirus: Europeans give WHO qualified backing amid growing wariness over China’s transparency

“The coronavirus has dramatically changed the economic outlook, for EU and for China – and we need macroeconomic coordination to tackle the crisis. This virus affects all countries, so it is more important than ever to coordinate policy responses and plans for exit and recovery.”

Dombrovskis also said the EU appreciated China’s readiness to help provide vital medical equipment, adding: “We agreed to work together on keeping supply chains open for critical personal protective and medical equipment.”

Chinese state media said only that there had been a “constructive communication” on Covid-19, macroeconomic policies and the investment agreement.

EU sources have said the talks with China were ongoing but were proving difficult, and the major points of contention were market access and giving businesses a level playing field.

The Covid-19 pandemic has not only delayed some of the negotiations, but China’s handling of the crisis and efforts to portray itself as offering a more efficient response than Western democracies have also fuelled the EU’s suspicions about Beijing.

Europe’s ‘17+1’ countries dissatisfied with China relations, report says

Recently, Germany and France felt obliged to counter the narrative that China was doing more to help Italy, the worst hit EU country, by using EU social media accounts to stress that the two countries had donated more masks “than China”.

In March, the EU’s top diplomat fired a warning shot at China’s “politics of generosity”, amid a growing sense of unease over Beijing’s targeted strategy of helping selected European countries.

In an unusual choice of language, the bloc’s foreign policy chief Josep Borrell called on EU countries to stand ready for a “struggle for influence” in a “global battle of narratives”.

This article appeared in the South China Morning Post print edition as: China tries to keep EU investment deal on track
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