The European Union’s trade representative in Beijing, Marjut Hannonen, stated during a forum held on Wednesday (May 14th) that the EU has no intention to restart investment negotiations with the Chinese Communist Party, which had previously reached an impasse.
Hannonen pointed out that over the past two decades, trade relations between the EU and China have continued to deteriorate, citing reasons such as the Chinese government’s substantial subsidies for domestic enterprises and the “weaponization” of trade policies. She described China’s overcapacity as a “significant” global issue, particularly affecting industries like electric vehicles, leading the EU to impose tariffs as high as 38% on Chinese manufactured electric cars.
Hannonen made these remarks at a forum commemorating the 50th anniversary of diplomatic relations between Europe and China.
Chinese officials, including former Chinese Ambassador to the EU Fu Cong, have been lobbying to restart stalled negotiations on the Comprehensive Agreement on Investment (CAI) between China and the EU.
Initially hailed as a milestone agreement between the two parties, the CAI negotiations soured in 2021 due to human rights issues in Xinjiang. The EU’s 27 member states decided to impose sanctions on Chinese officials responsible for human rights abuses in Xinjiang’s “re-education camps,” prompting retaliatory measures from China. Criticism from the European Parliament’s most vocal members on human rights issues in China led to Beijing targeting them for sanctions, which in turn resulted in the European Parliament suspending all official dialogues with China and freezing the imminent signing of the CAI.
Last month, China lifted sanctions on five members of the European Parliament and the Parliament’s human rights subcommittee in an attempt to mend relations with the EU.
However, Hannonen made it clear that the EU has no interest in advancing the CAI at this time. She stated, “There is currently no intention on the EU side to proceed with the CAI. We have many issues that need to be addressed with China, and we should focus on solving these problems and devote our energy to them.”
Emphasizing the difficulties in making progress on existing issues, Hannonen stressed that the EU has no intention of taking any action on the CAI and the agreement remains on hold.
Former French Prime Minister Michel Barnier, who also participated in the forum, highlighted that China’s trade and investment strategies have further strained relations between Europe and China. He noted that China’s ongoing military support to Russia during the war in Ukraine has added uncertainty to EU-China relations. Barnier urged both sides to resolve trade imbalances while maintaining economic stability.