EU-China investment deal: a ‘values-based’ relationship?

The year-end conclusion of the EU-China investment deal was followed by a wave of arrests of pro-democracy figures in Hong Kong—not a good look.

Towards the end of 2020, the European Union concluded with China negotiations on an ambitious Comprehensive Agreement on Investment, granting greater market access for EU investors than ever before, including important openings inside China. According to Ursula von der Leyen, president of the European Commission, and Valdis Dombrovskis, executive vice-president and commissioner for trade, the CAI will ‘will bind the parties into a values-based investment relationship underpinned by sustainable development principles’, including commitments on forced labour and the ratification of the relevant fundamental conventions of the International Labour Organization.

Just as the EU and China were sealing the deal, however, the Chinese authorities jailed Zhang Zhan, a 37-year-old journalist and former lawyer. Zhang, who had been detained since May, was sentenced to four years, under the portmanteau charge of ‘picking quarrels and provoking trouble’—she had contributed to telling the world the real dynamics related to the early phases of the coronavirus outbreak in Wuhan. The blogger had been on hunger strike for several months, in protest against her detention, and subjected to forced feeding.

Li Wenliang, an ophthalmologist in Wuhan who had tried to issue the first warning about the Sars-Cov-2 outbreak in late December 2019, had received comparable treatment. Summoned by the police, Li was accused of making false comments disturbing the social order and investigated for ‘spreading rumours’. He died from Covid-19 last February, at age 34; his family was offered a ‘solemn apology’ by the Communist Party of China.

In China criticism—let alone demanding human rights, such as freedom of speech, or the rule of law—inexorably leads to a common fate, associating the rich metropolis of Hong Kong with the poor areas of the Xinjiang inhabited by the Uighurs, ordinary citizens with billionaires.

In early December, Joshua Wong (24), a Hong Kong democracy activist, was jailed once more, with colleagues, for his involvement in mass protests in recent years. Jack Ma, whose net worth amounts to $48.2 billion, was ‘caught’ criticising China in October, in this case advocating reforms of the banking and financial system; he has not made any public appearances for several weeks.

Slave-labour concerns

The investment deal was strongly advocated by Germany, during the last days of its EU presidency. This drew criticism from other member states, including Italy, Spain and Belgium, reflecting concerns about slave labour in China and the disapproval of the United States president-elect, Joe Biden.

As Gideon Rachman pointed out in the Financial Times, the determination of the German chancellor, Angela Merkel, to conclude the deal could be explained, at least partially, by Europeans’ scepticism about the future of the US. Considering how Europe has greatly benefited from the fact that for 75 years the world’s most powerful nation has been a liberal democracy, however, it makes little sense to rely on a US security guarantee in Europe while undermining American security policy in the Pacific.

If Germany, in particular, has been able in recent decades to exercise a sui generis role as civil power (Zivilmacht), based on ‘outsourcing’ its defence while framing its national interest in geo-economic terms—to encourage Made in Germany exports worldwide, from vehicles to arms exports—that is precisely because the country was reassured by the presence of US troops on the old continent.

For its part, Washington did not miss the opportunity to express its concerns about a deal which unexpectedly sidelines the US and, in particular, the incoming Biden administration. This in a moment when, after four years of an anarchic and opportunistic presidency, renewing transatlantic relations should be a priority.

After 15 years in power, Merkel is not running for a further term in office in the elections looming in Germany in September. The deal is perhaps not an ideal political legacy for her, having been the most trusted leader worldwide since 2017, when Donald Trump succeeded Barack Obama in the White House. In a world where leaders such as Trump, Jair Bolsonaro, Vladimir Putin and Boris Johnson have made a political fortune out of populist, nativist authoritarianism, Merkel has often been credited, rightly, as a global ‘defender of liberal democracy’.

Authoritarian model?

Speaking of which, the deal came with along with a new forecast that China would overtake the US as the world’s biggest economy by 2028, five years ahead of earlier predictions, mainly due to the asymmetric impact of Covid-19. Indeed, an important debate is going on as to which factors—political, geographical or otherwise—influence policy effectiveness in such crises. Might China represent a model to follow in times of emergency? If so, at what cost?

There is a risk that, in the social imaginary of liberal-democratic societies, an authoritarian regime may be seen as more efficient and prepared to deal with crises—even when, as in this case, it contributed to the originally-unchecked spread of the epidemic.