China Says EU Investment Deal in Final Stage, Hails Progress

(Bloomberg) -- China said talks with the European Union on a bilateral investment deal are in the final stages, citing progress between negotiators as they push for an agreement before a year-end deadline.

“Now the negotiations are in the final stage,” Chinese Foreign Ministry spokesman Wang Wenbin said at a briefing in Beijing on Friday. “I believe as long as both sides can take care of each other’s concerns and walk toward each other, we will be able to achieve goals set by our leaders.”

Earlier the South China Morning Post reported that the two sides have reached an ‘in principle’ agreement after receiving the backing of German Chancellor Angela Merkel and French President Emmanuel Macron. Germany has said the agreement would be discussed among the 27 representatives of the EU bloc on Friday, the report added.

“We are not quite there yet but it’s definitely feasible that, if things move forward as they are moving now, that we can conclude still this year,” Valdis Dombrovskis, executive vice-president in charge of economic matters at the European Commission, the EU’s executive arm in Brussels, told Bloomberg Television on Friday.

Dombrovskis added: “We need to rebalance the economic and investment relationship with China because currently Europe is substantially more open to Chinese investments than China is to EU’s investments.”

‘Important Progress’

The targeted deal -- known as the Comprehensive Agreement on Investment -- has the potential to reshape economic ties between China and the EU even as political divisions remain. Bilateral trade exceeded $650 billion last year, and the new agreement aims to build on that.

On Thursday, Chinese Commerce Ministry spokesman Gao Feng told a regular briefing that the two sides had conducted consultations focusing on the remaining issues and had made “important progress.” “Both teams will continue to work hard to achieve the negotiation goals set by the leaders of both sides,” he said.

The agreement would be the second significant bilateral economic deal between the EU and China this year after they came to terms on geographical indications in July 2020, according to Joerg Wuttke, president of the European Union Chamber of Commerce in China.

“The CAI should increase European companies’ access to the world’s fastest growing market, and provide a framework that allows them to compete on a level playing field while safeguarding the same for Chinese companies in their largest market -- the EU,” Wuttke said earlier this week.

Human Rights

While the deal represents a diplomatic win for both parties, it will be especially welcomed by Beijing as it offers a chance of rekindling ties with the EU that have grown increasingly cool in recent years.

Brussels has become more vocal in its criticism of China on an array of issues from alleged human rights violations in the mainly Muslim Xinjiang region to its increasing militarization of the South China Sea. The EU has also raised concerns about a new national security law in Hong Kong that’s curtailed freedoms in the former British territory.

Reaching an agreement wasn’t easy. Talks that began in 2013 have been drawn out over provisions to open up China’s market and eliminate what the EU saw as discriminatory practices.

The EU had also been seeking commitments from China on sustainable development topics including labor issues -- an area that had become a major obstacle to concluding the deal.

©2020 Bloomberg L.P.

With assistance from Bloomberg