EU tells Xi that China must prove investment deal is worthwhile

[BRUSSELS] The European Union stepped up demands on China to open its market further to foreign investors, seeking to keep alive a goal for a far-reaching agreement this year.

Following a video conference that brought together German Chancellor Angela Merkel, EU summit chair Charles Michel, European Commission chief Ursula von der Leyen and Chinese President Xi Jinping, the bloc's representatives said the ball is in China's court to meet a 2020 target date for sealing the long-sought investment deal.

The European side said Beijing must follow up recent offers to pursue fairer economic policies with more concessions in order for an investment deal to be achieved by year-end.

"China has to convince us that it is worth having an investment agreement," von der Leyen told reporters in Brussels after the video conference, which replaced an original plan for a full EU-China leaders' meeting in Germany. "We need China to move." The EU and China have been in negotiations since 2013 on a bilateral pact that would reduce Chinese restrictions on European companies. In April last year, the EU and China set a target date of end-2020 for reaching an "ambitious" investment deal.

EU-China relations have been strained this year by alleged Chinese disinformation about the coronavirus, by Beijing's controversial national-security law for Hong Kong and by stepped-up European efforts to protect domestic manufacturers from foreign competitors.

Still, the bloc is keen to show economic rewards from a policy approach toward China that is less confrontational than that pursued by US President Donald Trump's administration.

The EU argues that the global economic slump triggered by the coronavirus strengthens the case for an accord that would open the Chinese market more to foreign investors.

Dr Merkel said an EU-China investment deal this year is still possible, telling reporters in Berlin that "the whole thing has gotten a political impulse" as a result of Monday's video conference.

"This is about protecting our own strategic interests," Dr Merkel said. "In the last 15 years, China has become much stronger economically - that means the demand for reciprocity, for a level playing field, is of course today very much justified." BLOOMBERG