If one listens to recent statements made by European officials, there’s still a lingering uncertainty over whether they think the EU-China investment pact is all but dead or merely on hold and thus only temporarily in the “deep freezer” (Green MEP Reinhard Bütikofer), awaiting an unspecified thawing of relations between Brussels and Beijing in the distant future.
On May 20, the European Parliament (which must ratify the pact agreed by the European Commission in December) passed a resolution stating that “China [must] lift the sanctions before parliament can deal with the Comprehensive Agreement on Investment (CAI),” referring to the investment pact’s formal name and the sanctions Beijing imposed on European politicians and research institutes in March, a retaliation for the EU’s own sanctions on four Chinese officials over massive human rights violations against the Uighurs in Xinjiang province.
Weeks earlier, on May 4, European Commission Vice-President Valdis Dombrovskis made similar-sounding comments: “It’s clear in the current situation with the EU sanctions in place against China and Chinese counter-sanctions in place, including against members of European Parliament [that] the environment is not conducive for ratification of the agreement.”
According to most newspaper reports at the time, Dombrovskis was admitting that there’s now zero chance of the EU-China investment pact being ratified. But his comments, as well as the latest resolution from the parliament, could be read in several ways. For supporters of the investment deal, they could be simply pointing out that the environment at the moment isn’t conducive for its ratification (not an untrue statement). If so, that doesn’t mean the environment will never be conducive nor the investment pact never ratified.
Moreover, they could also have merely been signaling that their counterparts in Beijing need to do more to win back friendships in Europe. Indeed, the European Parliament resolution made explicit that if Beijing lifted its sanctions then this would be considered a sign of progress, offering a quid pro quo: “remove the sanctions and we’ll debate the pact.”
All this, however, assumes that progress can actually be made. But is there now a possibility of improving EU-China relations? Or, instead, is it either between maintaining the status quo or even further regression?
A Symbolic Deal
Whichever way one looks at it, agreeing terms on the investment pact in December was an aberration, a last-ditch attempt by those in the EU who want to see some progress in relations with Beijing. And because there was always going to be an extremely difficult battle to push it through the European Parliament (even before the sanctions) it was at best a symbolic deal, a sign of intent by some in the EU about a desired trajectory of EU-China relations, rather than an accurate representation of them.
That, in a way, makes the latest comments all the more opaque. The European Parliament resolution—passed by 599 votes to 30, with 58 abstentions—stated that “any consideration of the EU-China Comprehensive Agreement on Investment, as well as any discussion on ratification by the European Parliament, has justifiably been frozen because of the Chinese sanctions in place.” It also noted that the European Parliament “calls on the Commission to use the debate around the CAI as leverage to improve the protection of human rights and support for civil society in China and reminds the Commission that Parliament will take the human rights situation in China, including in Hong Kong, into account when asked to endorse the CAI.”
However, that is not the same as saying that the European Parliament won’t consider the investment pact until improvements are made to China’s human rights situation, the reason for the sanctions in the first place. Of course, though, this is intimated: China won’t lift its sanctions until the EU lifts its sanctions, but that won’t happen until the human rights situation in Xinjiang improves. So, in a roundabout way, the European Parliament has made de-thawing the investment pact contingent upon on-the-ground change in China (albeit by simply shifting Beijing’s responsibility).
A Turning Point
Even still, it appears slightly odd at first glance why all the fuss is over the sanctions, not the issues leading to the Chinese officials being sanctioned in the first place. However, the sanctions by both sides represented a turning point, a fork in the road with few avenues back, for the very simple reason that the situation it created was so obvious beforehand.
On March 22, China placed sanctions on several MEPs and European academics, in response to the EU sanctioning four Chinese officials from Xinjiang state the same day. (It’s worth bearing in mind that the EU didn’t sanction the top Communist Party boss in Xinjiang, Chen Quanguo, despite Washington doing so last year.)
Given the speed at which Beijing retaliated—a matter of hours after the EU’s own sanctions—China’s leaders had planned for this eventuality, and one must assume the European leaders who made the decision expected this response. After all, China’s ambassador to the EU, Zhang Ming, warned of such a response a week beforehand, as did China’s jingoistic tabloid Global Times.
Moreover, the European leaders who made the sanctions decision must have also been well aware that China’s retaliation would freeze the investment pact in the European Parliament, given that much of the body had, even before the sanctions, made it known that they opposed the pact.
Such sanctions were also signposted by the EU in December, when it finally passed its Magnitsky-like sanctions regime, and even months earlier, when Brussels began issuing stronger statements about the situation in Xinjiang, Hong Kong, and the South China Sea. (Bear in mind that EU sanctioning of Chinese officials in March had nothing to do with new events in Xinjiang.) Increasingly, the EU was making calls that are hard to walk back from.
For years, Europeans were used to talking about China without reference to Xinjiang or Taiwan or the South China Sea. As they became part of the EU’s vocabulary in 2020, they became difficult to unlearn. More likely, their articulation will now be refined.
A Downward Trajectory
Seen in this way, the decision by the EU to sanction Chinese officials, and for Beijing to retaliate, was perfectly in keeping with the downward trajectory of EU-China relations. And because the present situation was well signposted beforehand, the significance of the decision is compounded: genuine trade advantages were knowingly sacrificed for the sake of a symbolic stance on human rights. That might have been the day when any lingering faith in “change through trade” finally died. Of course, it wasn’t the same officials who decided on the sanctions who decided on pushing through terms of the investment pact in December. But many of the key players, such as German Chancellor Angela Merkel, had a leading voice in both decisions.
Theresa Fallon, the director of the Center for Russia, Europe, and Asia Studies (CREAS), argued this week that Beijing shot itself in the foot with its retaliatory sanctions. For sure, and there’s an argument to be made about what the Chinese government could have achieved in Europe had it not responded as it did. The EU would not have gone into the first meeting of the new EU–US dialogue on China, held on May 26, so antagonized by Beijing. And Chinese officials may have been able to wring a few more benefits out of Merkel during her last months as chancellor, as she is set to step down in September after 16 years in office. Whoever replaces her is unlikely to be as warm toward China. And a possible Greens-led coalition, with the Social Democrats and Free Democrats, would certainly change Berlin’s tune on China.
That said, for reputational reasons, Beijing had to react in the way it did to EU sanctions. Indeed, it responded the same way to US sanctions around the same time. Beijing only shot itself in the foot if it had genuinely believed progress in EU-China relations could be made. Reading the temperature accurately, it realized that there was (and now is) little to be done to improve relations. We haven’t quite sleepwalked into the situation today, but a sense of inevitability does pervade EU-China relations over the past 12 months.
David Hutt is a political journalist based between the Czech Republic and the United Kingdom, covering European foreign affairs and Europe-Asia relations.
