Conflicting Reports Indicate an Uncertain Future for the CAI
Chinese officials have been in communication with their EU counterparts recently on a variety of issues. In the reports from China and from the EU, the substance of these meetings differs, especially in relation to the China-EU Comprehensive Agreement on Investment (CAI), indicating different priorities of the two sides and an uncertain future for the relationship overall and the agreement in particular. As much as China continues to hope to separate sovereignty and security issues from economic relations, and would like to push forward with the CAI, European countries may not be interested in doing, or politically able to do, the same.
On July 5, Chinese president Xi Jinping had a virtual conference with French President Emmanuel Macron and German Chancellor Angela Merkel. According to a Xinhua report, the leaders “call[ed] on China and Europe to expand consensus and cooperation for the two sides to play an important role in properly responding to global challenges.” During the meeting, President Xi “said China is willing to convene the 23rd China-EU leaders' meeting with the European side at an early date, conduct high-level dialogues in strategic, trade, cultural, digital and climate sectors, and advance mutual recognition and protection of products listed in the China-EU agreement on geographical indicators,” according to the report. While committing to further opening up, Xi “expressed the hope the European side can provide [a] just, transparent and non-discriminatory business environment for Chinese enterprises.”
In response, according to the same Xinhua article, Macron said that “France is committed to promoting cooperation with China in a practical manner, supports the conclusion of the EU-China investment agreement and the strengthening of cultural exchanges, and welcomes Chinese companies to invest in France.” The report also noted Merkel’s statement that Germany “hopes that the EU-China investment agreement will be approved as soon as possible.”
The Xinhua report also highlighted President Xi's call for EU-China cooperation on WTO reform and mutual support in the Beijing Olympics and Paris Olympics. Xi also said that “China is ready to enhance dialogue and cooperation with all parties, at the same time, it will firmly defend its sovereignty, security, and development interests,” likely referring to sensitive topics such as Taiwan, Hong Kong, and Xinjiang.
In contrast, the French official report noted that the conversation covered issues such as climate change, biodiversity protection, and Africa. It also stated that the meeting renewed European calls for market access and market competition in China and mentioned that the French and German leaders expressed concerns over the human rights situation of forced labor in China.
The German official summary of the meeting, for its part, briefly stated that the leaders “exchanged views” on international trade, climate protection, biodiversity, COVID-19 pandemic, global vaccine supply, and other international and regional issues.
Similarly, summarizing the meeting between Chinese Minister of Foreign Affairs Wang Yi and Jose Borrell Fontelles (the EU foreign policy chief and Vice President of the European Commission) on July 9, Chinese official media highlighted Fontelles’ statement that “EU-China cooperation is fundamental and strategic” and "[t]he entry into force of the EU-China investment agreement is in the interest of both sides, and thus common endeavors from the two sides to this end are expected.”
In contrast, the EU's report of the meeting highlighted Fontelles’ statement on the EU’s “strong bond” with the United States and “the EU’s strong concerns about the ongoing pressure on democracy and fundamental rights in Hong Kong, the treatment of human rights defenders, as well as the treatment of ethnic and religious minorities, in particular in Xinjiang.”
The European Parliament voted in May to freeze ratification of the CAI after the EU and China imposed sanctions against each other over human rights issues in Xinjiang. During a July press conference, MOFCOM spokesperson Gao Feng said that China and the EU are undertaking legal reviews, translation, and other technical preparations for the CAI. Around the same time, the Slovenian ambassador to the EU, Iztok Jarc, who became the president of the Council of the European Union in July, said that he would press ahead on the CAI, even though it is "a bit more difficult" due to the geopolitical situation. However, Jarc only has six months in that office, so it is unclear how much he can accomplish within this short time frame.