China and EU 'on verge' of major investment deal
- Published
The EU and China are close to reaching a long-awaited business investment deal, according to media reports.
The pact, expected to be finalised this week, will give EU firms better access to the Chinese market and improve competition conditions.
Talks on the investment deal began in 2014 but have been stuck for years over a number of issues.
But rising trade tensions between the US and China may have helped change the Chinese position, officials said.
The deal comes hot on the heels of the UK's post-Brexit trade agreement with the EU which was announced on 24 December.
According to multiple reports, the deal would open up China's manufacturing sector to EU companies, as well as construction, advertising, air transport and telecoms.
One of the sticking points was China's demands for access to the EU's energy market given sensitivities over national security.
The deal is expected to give Beijing access to a small part of the European renewable energy sector on a reciprocal basis.
The pact is also designed to remove barriers to investment in China such as joint-venture requirements and caps on foreign ownership in certain industries.
Once the expected deal is reached, it needs to be ratified by the European parliament, a process that may not begin until the second half of 2021.
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Hard labour
On Monday, the European Commission reported progress on the talks with Beijing, including the core issue of workers' rights in China.
This is a contentious issue given reports that China uses Uighur Muslims detained in large numbers in the Xinjiang province as forced labour. Beijing denies these claims.
Under the agreement, China is being asked to pledge to subscribe to the International Labour Organisation's rules on forced labour.
An EU-China agreement is expected to cause frictions with the incoming administration of US president-elect Joe Biden.
Earlier this month the EU published a transatlantic strategy in which it urged the US to work with it to meet the "strategic challenge" posed by China.
China and the US have been locked in a trade war since 2018 and the Trump administration has targeted a number of Chinese tech companies as threats to national security.
EU-China relations themselves have been strained this year, over China's imposition of a new security law in Hong Kong and accusations it spread disinformation about the coronavirus.