China, EU push for cooperation amid rising hurdles
Bilateral ties need new path to cope with intricate issues from trade to HK: experts
Published: Jul 29, 2020 08:18 PM

Customers shop for goods including flour, edible oil and wine at an open air market in Xinzhu train station in Xi'an, Northwest China's Shaanxi Province on Thursday. The China-EU freight train brings local residents more choices of goods for the upcoming Spring Festival, which falls on January 25. Among 8,225 such transcontinental trains in 2019, 2,133 departed from or arrived at Xi'an. Photo: cnsphoto

China and the EU appear committed to a push for cooperation on a wide range of issues from a widely expected bilateral investment deal, to COVID-19 responses and WTO reforms, even as they are far apart on a series of issues from market access to a national security law for Hong Kong, Chinese experts said Wednesday. 

Still, facing a rising number of risks and hurdles posed in part by an ever aggressive US government toward China, the EU and China need to seek a new path with clear red lines as well as reasonable compromises that ensure stable cooperation despite political differences, the experts noted.

The delicate situation in China-EU relations has been on vivid display over the past 24 hours or so, when a high-level economic and trade dialogue produced, Chinese and EU officials say, significant progress on several issues, but a Brussels' response package for the national security law for Hong Kong drew a strong backlash from Beijing.

"This really underscores the complex nature of the China-EU relationship at the moment. It's very clear both sides want to strengthen cooperation, particularly in economic and trade areas, but they also have a lot of difficulties and contradictions," Huo Jianguo, vice chairman of the China Society for World Trade Organization Studies, told the Global Times on Wednesday.

At the Eighth China-EU Trade and Economic Dialogue, both sides achieved "a series of fruitful results and consensus" in areas such as COVID-19 response, negotiations for the Bilateral Investment Treaty (BIT) and WTO reforms, the Chinese Ministry of Commerce said in a statement on Tuesday night. In particular, the statement said that both sides made "significant progress" in matters related to fair competition under the BIT.

For its part, the EU also said in a statement that it registered the significant progress made on level-playing field related issues, though equally significant work remains to be done on key issues such as market access. The EU statement also stresses the importance of a level-playing field to the EU side. 

The two statements showed that while the two sides made "some progress" and have the willingness to engage in further dialogue and negotiations, "we are still far from reaching a final agreement," Huo said.

Further complicating the process are the EU's latest measures targeting Hong Kong. On the same day as the dialogue, the EU Council expressed "grave concerns" over the national security law and set out a response package include restrictions on exports of equipment for end use in Hong Kong. 

That drew a stern response from the Chinese Mission to the EU. "China is firmly against the EU's wrong moves and has made serious representations with the EU side," a spokesperson for the mission said in a statement on Wednesday, urging the EU to "stop meddling in Hong Kong affairs and China's internal affairs in any way."

The EU's measures reflect a shift in the bloc's policy toward China that seeks both cooperation in trade and confrontation over political matters in parallel - which in turn call for a shift in China's approach toward the EU, said Cui Hongjian, director of EU studies at the China Institute of International Studies in Beijing.

"I think we have to draw a clear red line in matters related to Hong Kong so the EU knows where to stop or face the consequences," Cui told the Global Times on Wednesday, noting that both sides should talk over the differences instead of criticizing each other.

The two sides should also continue talks to address sticking points for the BIT with reasonable compromises. "The EU wants the same treatment from China as the US in terms of market access. I think we can consider granting more market access to the EU, provided they are in line with the interests and security of the domestic economy," Huo said. But the EU must also grant similar market access to Chinese companies, including in 5G, he said.