EU Reaches Investment Pact With China Amid Human Rights Concerns

European Commission President Ursula von der Leyen, European Council President Charles Michel, German Chancellor Angela Merkel, French President Emmanuel Macron, and Chinese President Xi Jinping are seen on a screen during a video conference, in Brussels, on Dec. 30, 2020. Johanna Geron/Pool/Reuters

The European Union and China on Dec. 30 announced a business investment deal after the communist regime made commitments to improve market access.

The Comprehensive Agreement on Investment, which was seven years in the making, was concluded “in principle” at a video conference attended by Chinese leader Xi Jinping, European Commission President Ursula von der Leyen, and European Council President Charles Michel, along with German Chancellor Angela Merkel and French President Emmanuel Macron.

The Chinese regime committed to “a greater level of market access for EU investors than ever before,” and promised to “ensure fair treatment for EU companies so they can compete on a better level playing field in China, including in terms of disciplines for state-owned enterprises, transparency of subsidies and rules against the forced transfer of technologies,” the European Commission, the EU’s executive body, said in a statement.

Beijing has also agreed to pursue ratification of the International Labor Organization’s rules on forced labor, the Commission said.

“Today’s agreement is an important landmark in our relationship with China and for our values-based trade agenda,” von der Leyen said. “It will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs.”

Von der Leyen has previously called out the Chinese regime for failing to uphold its promise under a 2019 deal to allow greater access for European companies or drop its rules requiring investors to share their know-how in Chinese joint ventures.

EU lawmakers have often condemned the Chinese regime over its human rights abuses, including the use of forced labor and the suppression of China’s ethnic and religious minorities.

On Dec. 17, the European Parliament adopted a resolution calling for EU sanctions against Chinese officials responsible for the abuse of ethnic Muslim Uyghurs and to ban Chinese imports made with forced labor.

“We will engage closely with China to ensure that all commitments are honored fully,” EU Trade Commissioner Valdis Dombrovskis said.

Hosuk Lee-Makiyama, director of trade think tank ECIPE, said that while there’s little obvious benefit for Beijing in the text, China wouldn’t have signed on without some promise of advantage.

“No major power, not least China, gives anything for free, so there will be a trade-off. It’s just not in the agreement,” he said.

Compared with a trade deal, which might include retaliatory tariffs, such an investment deal is also more difficult to enforce, Lee-Makiyama said, noting that the EU would be unlikely, for example, to seize Chinese assets.

The EU has been keen to portray the agreement as a step toward forging multilateral rules. It still doesn’t cover issues including trade flows or public procurement for the likes of telecoms equipment maker Huawei.

At the video conference, the leaders also discussed the COVID-19 pandemic, which originated in Wuhan, China, with the emergence of the CCP (Chinese Communist Party) virus.

EU leaders emphasized the need to “reinforce international cooperation to better anticipate and manage potential future pandemics.”

The Chinese regime’s coverup of the initial CCP virus outbreak is widely seen as one of the main causes of the pandemic.

EU leaders also “reiterated their serious concerns about the human rights situation in China, including developments in Hong Kong,” the Commission said.

In her State of the Union speech in September, von der Leyen said the EU must call out the Chinese regime’s human rights abuses and must make decisions on sanctions more efficiently.

On Dec. 7, the EU decided to establish a global Magnitsky sanctions regime, enabling the bloc to target individuals and entities responsible for human rights abuses.

Reuters and Ella Kietlinska contributed to this report.