Newly Assertive EU Faces Resistant China at Summit

April 9, 2019 Updated: April 9, 2019

BRUSSELS—Chinese Premier Li Keqiang and European Union institution leaders met in Brussels on April 9 for an annual EU-China summit that the EU has seized on to pressure Beijing over trade and investment.

After years of offering free access to its markets, the EU is losing patience with the slow pace of Beijing’s own market liberalization. It is also growing concerned over state-led Chinese companies’ dominance of some EU markets and acquisitions of strategic industries.

European Commission President Jean-Claude Juncker said the summit “would not be simple.”

“We will explain that in Europe we are insisting that European firms in China should enjoy the same rights as Chinese firms in Europe,” he said in a speech before the meeting.

Li arrived in a black Mercedes bearing two Chinese flags before going into the European Council building with Juncker and Council chief Donald Tusk.

The EU’s newly assertive stance has made it difficult to agree a final summit declaration, a staple of such high-level gatherings, which this year the EU sees as way of setting down in writing Chinese promises to open up to European investors.

EU and Chinese negotiators agreed a tentative draft statement on Tuesday morning, four EU diplomats said. But any final communique needs to be signed off by Li, Juncker and Tusk.

Diplomats said a new draft included fresh commitments by Beijing to speed up talks on a decade-long effort to reach an investment pact, as well as text on industrial subsidies and opening China’s market more broadly to European companies.

Like the United States, many EU countries want to crack down on industrial subsidies and forced technology transfers. A new Commission plan described China as a “systemic rival” for the first time last month.

“The old narrative is absolutely obsolete,” Commission Vice President Jyrki Katainen told Reuters.

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One diplomat said an EU leaders’ summit in March had helped to forge a more unified European position that was paying off: There was a greater awareness of China’s policy of pushing free trade only when it suited its interests.

The EU is China’s top trading partner and China is the second-biggest market for EU exports after the United States. The Chinese regime denies trying to dominate strategic European industries and has repeatedly said it wants a “win-win” relationship of mutual benefit.

But Beijing is struggling to ease worries about Chinese leader’s Xi Jinping’s signature “One Belt, One Road” (OBOR, also known as Belt and Road) initiative as it readies for a major summit later this month.

Tusk and Juncker are expected to raise concerns about Xi’s initiative, namely that the vast infrastructure plan is unsustainable, damaging to the environment, creates financial dependency and is mainly about projecting Chinese power abroad.

China points to a new foreign investment law due to take effect at the start of 2020. It includes provisions to ban forced technology transfers and ensure foreign companies have access to public tenders.

EU officials say the law lacks detail, and question how effective it will really be in protecting foreign firms.

By Philip Blenkinsop & Robin Emmott