China-EU Landmark Investment Deal Forging Ahead Before US Presidential Race Finalized

ER Editor: Readers may also be interested in this SCMP article of Dec 23 titled On brink of China-EU investment deal, eleventh-hour pressure comes from US and within Europe. It is eminently clear that Merkel wants this deal to go through for the benefit of German business, despite French resistance, especially over forced labor on its own territory such as the Uyghurs in Xinjiang. See also China premier Li Keqiang scrambles to shore up support for investment agreement with EU. Of note:

Most EU decisions require support from both Germany and France, the bloc’s two leading members. Riester’s (ER: French trade minister delegate) comments indicated the reservations of the French government, even though, according to diplomatic sources, Berlin is pressing to get the deal done.

Riester also confirmed that under terms of the deal – which diplomats said has reached the final stages – the EU would have to open up its energy market for Chinese companies.

Riester also said that Brussels and Beijing have not been able to agree on how to resolve disputes arising from the deal.

On the need for Beijing to commit to investor protection, Riester said there were concerns whether European companies entering the Chinese market through the new deal could be subject to “sudden nationalisation” by the Chinese government.

Meanwhile, Poland is digging in its heels given its alliance with the US, which is taking a backseat with Merkel (yes, even with the possibility of Biden entering the White House), while China is pushing to get the Netherlands and Spain on board. Merkel and China seem to be pushing for this BEFORE the US presidential race gets finally sorted out.

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Bass Blasts “Deeply Corrupt” EU Over Imminent Landmark China Investment Deal

Tyler Durden's Photo TYLER DURDEN

In contrast to the EU, the US Congress passed the Uyghur Human Rights Policy Act in June 2019, and on September 22, 2020, the US House of Representatives passed the Uyghur Forced Labor Prevention Act.

As The Gatestone Institute’s Judith Bergman notes, the US has sanctioned at least 28 Chinese officials over their actions in Xinjiang. The list includes senior Chinese Communist Party (CCP) officials, such as current Xinjiang Uyghur Autonomous Region (XUAR) Party Secretary Chen Quanguo, who executes Chinese government policy in the region. He is also the current First Political Commissar of the XPCC, a role in which he has exercised control over the entity. According to the US Department of the Treasury:

“The XPCC is a paramilitary organization in the XUAR that is subordinate to the Chinese Communist Party (CCP). The XPCC enhances internal control over the region by advancing China’s vision of economic development in XUAR that emphasizes subordination to central planning and resource extraction. The XPCC’s structure reflects a military organization, with 14 divisions made up of dozens of regiments… [Chen Quanguo]… has a notorious history of intensifying security operations in the Tibetan Autonomous Region, where he was deployed before arriving in Xinjiang…”

Meanwhile, the European Council, consisting of the heads of state of the EU member states and that is currently presided over by Germany, is unlikely to demand anything from China, let alone sanction it or do anything that might jeopardize its trade with Europe. This year, for the first time, China became the EU’s largest trading partner, surpassing the US.

Crucially, the EU does not want to jeopardize the finalization of the EU-China Comprehensive Agreement on Investment, which the EU and China have sought to realize for seven years now.

And, as The South China Morning Post (SCMP) reportsChina and the EU could complete the deal this week, with the 27 countries in the trade bloc unanimously approving the agreement despite earlier reservations.

An EU diplomat with knowledge of the discussions said that on Monday, representatives of the EU member states were briefed by EU negotiators who had “reported on recent positive developments in the negotiations with China, including on labour standards”.

The representatives “broadly welcomed the latest progress in the EU-China talks”, the diplomat said.

“After four years of Donald Trump, the EU is sending a very clear message that it will go its own way on China,” said Noah Barkin, an EU-China specialist with Rhodium Group, a research firm.

“This doesn’t doom transatlantic cooperation with Biden, but it shows just how difficult it will be. The big winner if this deal does come together is Beijing.”

Erik Brattberg, director of the Europe programme at the Washington-based Carnegie Endowment for International Peace, said the EU’s “last-minute push” to complete the deal with China “has already raised eyebrows in Washington”, adding:

“It risks undermining the credibility of the EU’s call for a joint transatlantic China strategy with the US even before the new Biden administration settles in.”

The unanimous support from the EU member states came despite France and Poland previously raising reservations about the deal.

Franck Riester, the minister delegate in charge of trade in the French foreign ministry, said last week that if the EU failed to commit to abolishing forced labour “we cannot facilitate investment in China”.

Polish Foreign Minister Zbigniew Rau also warned that Europe would need more consultations and transparency to win over its transatlantic allies.

By moving forward with the deal, Brussels also turned a blind eye to a thinly veiled warning from Jake Sullivan, Biden’s designated national security adviser, who said the Biden administration “would welcome early consultations with our European partners” on the concerns about China’s economic practices.

Outspoken China hawk, and hedge fund billionaire, Kyle Bass summed it up succinctly:

“Europe is so deeply corrupted by Chinese money that this deal was a fait accompli.” (ER: Who is not?)

Simply put, the EU is willing to turn a blind eye to any and every action by China against the world in the interests of money flowing into the failing super-state.

If reached, the deal would come hard on the heels of China’s success in creating the Regional Comprehensive Economic Partnership with 14 other Asia-Pacific nations, and the EU’s post-Brexit agreement with Britain.

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