Can China Save Europe

Can China Save Europe

European businesses in China are hopeful of an EU-China investment deal by end of the year, the head of the European Chamber of Commerce in China said on Saturday, although Beijing has declined to commit to a deadline.

The China-EU Comprehensive Agreement on Investment has been in the works for seven years, and is expected to pave the way for European businesses to invest in financial services, telecommunications, electric vehicles and other sectors that are gradually being opened up for foreign investment in China.

But the deal is facing opposition from some European members of parliament and the incoming US administration of President-elect Joe Biden, who say it does not address concerns about the use of forced labour by Chinese manufacturers, especially in the restive northwestern region of Xinjiang.

“The next few days will be interesting. My sense is that there is a serious push to get this past the finishing line,” Joerg Wuttke, head of the European Chamber of Commerce in China, told AFP.

“It’s not a perfect deal, far from it, but it’s a big step forward.”

China’s commerce ministry has refrained from committing to a year-end deadline and appears prepared for an extension of discussions.

“In order to preserve its security and development interests, China will conduct the negotiations at its own pace and strive to reach a comprehensive, balanced and ambitious investment agreement with the EU,” it said in a statement late Thursday.

“The China-EU investment agreement is aimed at providing more investment opportunities and sound institutional guarantees for the two sides, but to reach it requires joint efforts and to meet each other halfway,” it added.

In an interview with Le Monde on Wednesday, France’s junior trade minister Franck Riester said Beijing needed to address the issue of forced labour if Paris was to agree to the deal.

Human rights organisations have raised concerns about labour practices in Xinjiang where Uighurs and members of other Muslim-minority ethnic groups have reportedly been forced to pick cotton under a coercive state-run scheme. Beijing rejects the accusations.

Other critics of the deal say it might undermine Biden’s efforts to mend bridges with European allies, following Donald Trump’s divisive tenure.

“There is nothing in the agreement that would be at the disadvantage of the US,” Wuttke insisted.

But Biden’s camp has been nervous about Brussels moving closer to Beijing.

Jake Sullivan, who has been tipped as National Security Advisor, tweeted on Tuesday that: “The Biden-Harris administration would welcome early consultations with our European partners on our common concerns about China’s economic practices.”

The investment deal aims to create an equal playing field for European businesses in China that have long complained about preferential terms enjoyed by domestic firms.

The treaty will also strengthen intellectual property protections for European companies and ban forced technology transfers.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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