Strides made in bolstering EU ties

Pandemic fails to slow pace of trade and deals struck with partner China

The conclusion in principle of the negotiations for the China-EU Comprehensive Agreement on Investment, or CAI, on Dec 30 highlighted a year of fruitful bilateral relations.

Despite the COVID-19 pandemic, negotiations for the agreement, which started seven years ago, speeded up in 2020 after leaders from both sides pledged to wrap up the talks by the end of that year.

"We welcome the political agreement achieved on negotiations on investment," European Council President Charles Michel said in a tweet after a video talk between EU leaders and President Xi Jinping on Dec 30.

In the past few years, many Chinese companies operating in the EU have complained about a less friendly business environment. They likened the EU's antitrust review process, foreign direct investment screening and foreign subsidies reviews as "three huge mountains" weighing heavily on their chests, according to a survey by the China Chamber of Commerce to the EU, or CCCEU.

Chinese telecom giant Huawei has opposed the arbitrary use of security assessment in restricting its access to the EU's 5G market. However, an EU official indicated that the Huawei case fits under public procurement and is not covered by the CAI, and the same is true for investment screening on national security grounds.

"The CCCEU expects China and EU to promptly complete the follow-up work, ratify the treaty and implement it in a timely way so that to further boost bilateral investment and trade," the CCCEU said in a statement after the conclusion of the talks for the investment pact.

The EU accounts for about 5 percent of China's foreign direct investment stock, while China makes up 3.4 percent of the EU's FDI stock, according to the China Mission to the EU.

Zhang Ming, head of the mission, said the numbers are inconsistent with the size of the economies of the two sides and the expectations held by both.

"With the investment agreement, Chinese and EU investors will be able to further tap the potential to explore more opportunities in each other's market," he said on Dec 30.

The conclusion of the negotiations for the investment agreement came after China and the EU reported bilateral trade of $620 million in the first 11 months of 2020, up 4.7 percent over the same period in the previous year. Each side registered increases in exports to the other market.

The headline figure has made China the EU's largest trading partner, replacing the United States.

In 2020, China and the EU witnessed many high-level meetings and initiatives despite the challenges posed by the pandemic.

In virtual gatherings, the leaders of the two sides held the 22nd China-EU Summit in June and the China-Germany-EU Summit in September. Germany, which held the presidency of the Council of the European Union in the second half of 2020, played an instrumental role in pushing forward the CAI.

High-level dialogues

In the past year, China and the EU also held the 8th High-Level Trade and Economic Dialogue, the 10th High-Level Strategic Dialogue, and the 5th High-Level People-to-People Dialogue. The two sides launched the High-Level Dialogue on Environment and Climate Change and the High-Level Digital Dialogue.

During the year, President Xi, Premier Li Keqiang, Vice-Premier Liu He and State Councilor and Foreign Minister Wang Yi held phone calls with EU leaders as well as leaders of the bloc's 27 member states. In late August, Wang visited Italy, the Netherlands, Norway, France and Germany.

On Sept 14, China and the EU signed a bilateral agreement to protect 100 Chinese Geographical Indications, or GIs, in the EU and 100 European GIs in China against usurpation and imitation, after the agreement was first concluded in November 2019.

The GIs under protection include those for products such as Pixian bean paste, Anji white tea and Panjin rice from China and Munich beer, Irish whiskey and Porto from the EU.

Zhang said that despite the pandemic, China and the EU saw an increase in interactions in 2020.

"This is a big year for China-EU relations," he said of the past year.

China and the EU have helped each other in the fight against COVID-19.

When the epidemic broke out in China in the early part of 2020, the EU and its member states provided 56 tons of medical supplies to China. When the pandemic spread fast in EU member states from mid-March, China sent medical supplies to them, including medical teams to Italy, the worst-hit EU nation.

According to statistics, the EU imported 322 million euros ($396 million) of medical supplies from China to fight the pandemic in the first eight months of 2020. Face masks and ventilators accounted for the bulk of the imports.

From the viewpoint of EU leaders, the bloc's relationship with China is complex. While China and the EU had long ago established a comprehensive strategic partnership, EU leaders since March 2019 have called China "a cooperation and negotiation partner, an economic competitor and a systemic rival".

Zhang said China and EU are partners, not rivals. He added that the two sides are engaged far more in cooperation than competition, and have far more consensus than differences.

One major consensus concerns climate change. The EU warmly applauded when Xi in September announced that China would become carbon neutral by 2060.

Shada Islam, head of the New Horizons Project, a global strategic and advisory firm, said both sides have embarked on a high-level dialogue on climate change that is very significant.

She notes that it's nothing unusual for EU-China ties to experience ups and downs. "The EU did manage to stay out of the fray and did not, as many wanted it to, fall into the binary trap of either choosing the US or China as key partners," she told China Daily.

Islam called the CAI a "nice way to end a good year for Europe and Asia relations", citing also the EU-Japan and EU-ASEAN deals clinched in 2020－the latter completed with members of the Association of Southeast Asian Nations.

Ding Chun, director of the Center for European Studies at Shanghai-based Fudan University, said he is cautiously optimistic about China-EU relations.

He stressed that the two sides are important trade partners and have great potential for cooperation in digitalization, green development and third-country markets.

"The two sides have a mature mechanism to manage their differences through effective dialogues,"Ding said.

He believes that China and EU have no fundamental conflicts in geopolitical interests and have open channels for high-level dialogue.

"They also have many common interests in joining hands in improving global governance," Ding said.

chenweihua@chinadaily.com.cn