Chinese and EU leaders hold summit via videoconference, commit to progress on BIT
September 15, 2020 Category Foreign investment, Weekly
An EU-China leaders’ meeting took place on September 14, 2020 via videoconference. The EU was represented by Charles Michel, President of the European Council and Ursula von der Leyen, President of the European Commission, with German Chancellor Angela Merkel for the Council Presidency. President Xi Jinping represented China. The EU High Representative for Foreign Affairs and Security Policy, Josep Borrell, also participated. The meeting followed the 22nd EU-China summit held by video with Prime Minister Li Keqiang and a videoconference with President Xi Jinping in June.
The videoconference covered trade and investment, climate change and biodiversity, the response to the Covid-19 pandemic, as well as international affairs and other issues. With regard to the negotiations for an ambitious EU-China Comprehensive Investment Agreement (CAI), while both sides registered progress on the rules regulating the behavior of state-owned enterprises (SOEs), on forced technology transfer and on transparency of subsidies, the EU emphasized that more work was urgently needed on the issues of rebalancing market access and on sustainable development, according to a press release by the European Council. The EU called on China to step up its ambition on these issues. The two sides reaffirmed their objective of closing the remaining gaps before the end of the year. The EU side emphasized that high-level political engagement from China would be required to achieve a meaningful agreement. On other trade and economic issues, the EU reiterated its call on China to engage in future negotiations on industrial subsidies in the WTO. The EU stressed that, in line with China’s stated commitment to open up and ensure that EU producers are fairly treated on the Chinese market, more needed to be done to improve market access in the agri-food trade, financial services and the digital sector. The EU also again made clear its concerns on overcapacity, both in traditional sectors such as steel and aluminum as well as in high tech.
The two sides welcomed the signature of the EU-China Agreement on Geographical Indications which will improve access to the Chinese market especially for high-quality European agricultural products. The EU underlined the need for reciprocity and a level playing field in the area of science and technology, underpinned by high ethical and integrity standards. Leaders welcomed and agreed to continue the high level digital dialogue. They looked forward to concrete progress on ICT standards, product safety and research and innovation.
On climate change and biodiversity, the EU encouraged China to strengthen its climate commitments in terms of peaking carbon dioxide emissions and setting the goal of climate neutrality domestically. The EU also stressed the importance of a moratorium in China of building coal-fired power plants and financing their construction abroad, at least as part of a global initiative. The EU also encouraged China to launch its national emission trading system soon. The two sides agreed to establish a High-Level Environment and Climate Dialogue to pursue ambitious joint commitments on these issues. The EU noted that joint commitments by both sides on biodiversity could be a game-changer at the global level and China has a key role to play as host of the Conference of the Parties next year. An ambitious global agreement would be a major achievement.
On the Covid-19 response, the EU emphasized the shared responsibility to participate in global efforts to stop the spread of the virus, boost research on treatments and vaccines, and strengthen the role of the World Health Organization (WHO), including through the full implementation of the World Health Assembly resolution of May 2020. The EU also underlined that the recovery measures should support the transition to a greener and more sustainable economy. China’s full engagement in G20 efforts to support low-income countries and effectively implement the G20 – Paris Club Debt Service Suspension Initiative will also be essential. The EU also brought up human rights issues with the Chinese side, according to the EU press release.
China’s Global Times wrote that Chinese, German and EU leaders reaffirmed that they will further strengthen cooperation from trade to epidemic control, sending what experts call a resounding signal that the parties remain committed to pursuing pragmatic engagement rather than differences, “as some ill-advised officials and pundits in the U.S. are actively pushing for.” Chinese President Xi Jinping stressed that China and the EU must adhere to four commitments, namely peaceful coexistence, open cooperation, multilateralism, as well as dialogue and consultation, in order to push for the sound development of bilateral ties. The virtual meeting is set to inject impetus into China-Europe cooperation, particularly in economic and trade relations, and provide desperately needed confidence into a global economy battered by not only a global pandemic but also geopolitical and trade tensions created by an increasingly destructive U.S. government, Chinese experts said. Among the significant outcomes of the summit was a reaffirmation from the leaders that they will complete negotiations for a bilateral investment treaty (BIT) by the end of the year. The deal, once signed, is expected to greatly expand each other’s market and provide greater protection, as reported by the Global Times.
In the first eight months of the year, China’s trade with the EU grew by 1.4% year-on-year to CNY2.81 trillion, according to official Chinese data. This was higher than trade between China and the U.S., which fell 0.4% to CNY2.42 trillion. Also, in the second quarter of the year, China overtook the U.S. as Germany’s largest export market, with German exports to China reaching €23 billion.
Premier Li Keqiang will attend the World Economic Forum (WEF) Special Virtual Dialogue with Global Business Leaders on September 15. He will deliver an address and have discussions with the business leaders attending the meeting.
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