Merkel leads EU talks with China looking to ease tensions

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German chancellor Angela Merkel attends a meeting in Berlin. (AP)

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The two sides are trying to reinvigorate slow-moving discussions on an investment deal and building trust

BRUSSELS: German Chancellor Angela Merkel, top European Union officials and Chinese President Xi Jinping held talks Monday focused on trade, trying to reinvigorate slow-moving discussions on an investment agreement and building trust to tackle the thorny political issues harming their ties.

Merkel, whose country currently holds the EU’s rotating presidency, was backed by Council President Charles Michel, Commission President Ursula von der Leyen and the bloc’s foreign policy chief, Josep Borrell, at the video conference.

The talks between two of the world’s three largest economies and traders was an opportunity for Brussels and Beijing to take stock of their ties, with the Europeans wanting to focus on economic issues, reform of the World Trade Organization, climate change and the coronavirus pandemic.

The EU sees China as a “systemic rival” offering great opportunities but also presenting many challenges. The pandemic has also created new obstacles, notably what Brussels sees as a China-orchestrated campaign of disinformation about the disease that could put lives at risk.

China has been accused of trying to influence European officials, and Borrell has twice denied this year that the External Action Service — a kind of EU foreign office that he leads — has bowed to pressure from Beijing to alter documents.

The two sides have been negotiating an agreement on the conditions under which companies would be able to invest in the other’s economy, with the EU wanting China to open its market and end what it says are discriminatory laws.

They have agreed to accelerate talks in order to conclude a deal. The EU says progress has been made on issues such as forced technology transfer, but wants China to open up sectors such as telecoms, IT, health, financial services and manufacturing.

Brussels also wants the same level of access to agriculture and food markets that China gave to the United States in their phase 1 trade agreement struck in January.

China believes the investment accord should be a stepping stone to a free-trade agreement.

While the 27-nation EU — China’s biggest trading partner — is often divided in its approach to Beijing, the security law recently imposed on Hong Kong has galvanized the bloc. EU nations insist the new law is undermining the territory’s autonomy, which was guaranteed in the “one country, two systems” framework.

The Europeans were expected to underline their concerns about Hong Kong and tensions in the South China Sea during Monday’s talks, and renew their call for holding a human rights dialogue with Chinese officials later this year.

 

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