China Power | Diplomacy | Risk Intelligence | East Asia

China-EU Investment Deal Sparks Backlash Over Rights Concerns

Civil society organizations and members of the European Parliament alike are objecting to the deal amid China’s continuing crackdowns in Xinjiang and Hong Kong.

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China-EU Investment Deal Sparks Backlash Over Rights Concerns
Credit: Illustration by Catherine Putz

On December 30, 2020, leaders from China and the EU announced they had agreed in principle on the text of a long-awaited Comprehensive Agreement on Investment (CAI), after seven long years of negotiation. Meeting the end-of-2020 goal was no mean feat; as late as September 2020, after a China-EU virtual meeting, European Commission President Ursula von der Leyen cautioned that “a lot – a lot – still remains to be done” on the CAI, adding, “China has to convince us that it’s worth having an investment agreement.”

But it’s too early for negotiators to celebrate even now. The text of the CAI still needs to be finalized and undergo a legal review. Then it will have to be approved by the European Council, the heads of government of the EU’s member states. Finally, the investment deal will face what may be its steepest hurdle: approval by the European Parliament. In addition to geopolitical concerns about the implications for transatlantic ties, the investment pact is also coming under heavy fire from those concerned about China’s human rights abuses.

The EU and China are “two parties with opposing ideologies,” according to Valbona Zeneli, the chair of the Strategic Initiatives Department at the George C. Marshall European Center for Security Studies. “To belong to the EU, countries must pursue a values ideology that agrees to values supporting human dignity, human rights, freedom, democracy, equality, and rule of law. China, or more appropriately the CCP, is a one party totalitarian government.”

She adds, “In this regard, the CAI is in reality a deal between the EU and the CCP.  Semantics, some would say, but this is an important point that must factor into every decision.”

Those concerns were given voice in a open letter to members of the European Parliament (MEPS), von der Leyen, European Council President Charles Michel, and other top EU officials. The appeal, signed by 36 civil society organizations, warned that the CAI, in its current form, “sends a signal that the European Union will push for closer cooperation [with China] regardless of the scale and severity of human rights abuses carried out by the Chinese Communist Party.”

The letter urges the European Union to add a binding human rights clause to the CAI and refrain from from entering into the agreement until China ratifies core human rights conventions like the International Covenant on Civil and Political Rights and International Labor Organization conventions on forced labor and the right to organize.

The groups signing the letter ran the gamut from general human rights activism (the Human Rights Foundation and International Federation for Human Rights) to groups specifically advocating for Uyghurs and Tibetans (the Uyghur Human Rights Project, World Uyghur Congress, and International Campaign for Tibet) and trade unions (the European Trade Union Confederation and International Trade Union Confederation).

The 36 groups that signed the appeal are far from alone in raising their concerns. The European Parliament (EP) itself passed a resolution on EU trade policy on November 26, 2020, arguing for the “importance of including an ambitious chapter on trade and sustainable development to protect human rights, including core labor standards.” The resolution also “stresses that EU trade and investment relations require full respect for human rights.” It passed overwhelmingly, 593 votes to 50 (with 50 abstentions).

On December 17, just two weeks before the CAI was agreed upon, the EP passed a resolution specifically condemning “the government-led system of forced labor, in particular the exploitation of Uyghur, ethnic Kazakh and Kyrgyz, and other Muslim minority groups, in factories both within and outside of internment camps in Xinjiang.” The EP “[d]eeply deplores the ongoing persecution and the serious and systematic human rights violations that amount to crimes against humanity,” the statement added. With specific regard to the CAI, the resolution said the deal “must include adequate commitments to respect international conventions against forced labor.”

The text of the deal, however, only includes a commitment from China “to make continued and sustained efforts to ratify the ILO fundamental Conventions on forced labor,” according to the EU read-out. And despite the EU’s insistence that it secured “binding commitments” from China on the subject of labor rights, Chinese experts are extremely skeptical. “Can you imagine China with independent labor unions?” Shi Yinhong, a professor at Renmin University and adviser to China’s State Council, rhetorically asked the Financial Times. “Forced labor also relates to Xinjiang, so that’s another ‘no’ for China.”

“It is already clear that the outcome of the negotiations misses an essential criterion set by the European Parliament,” Reinhard Bütikofer, the chairman of the EP’s China delegation, told the South China Morning Post. “When it comes to forced labor in China, the EU Commission is satisfied with superficial lip service.”

Another major concern is China’s crackdown in Hong Kong. The mass arrest of 53 pro-democracy activists and politicians just a week after the CAI was announced may have dealt a fatal blow to the prospect of ratification by the European Parliament by highlighting in the brightest neon the pre-existing concerns.

“If ratified, the CAI will be a de facto recognition that it is acceptable to conduct a wide range of business activity with a totalitarian communist government that has proven itself capable of violating human rights with exacting precision and no apology,” Zeneli argues.

“More importantly, these transgressions have occurred while the CAI was being negotiated…. Essentially, this rewards the CCP and encourages its bad behavior.”

Members of the European Parliament (MEPs) have been making similar points. MEP Guy Verhofstadt pointed out on Twitter that the crackdown in Hong Kong has “only intensified since the EU-pact with China.” He added, “The EU cannot accept this! If the situation of the #Uighurs, #HongKong and Tibetans won’t change, the EP will not ratify.”

Fellow MEP Engin Eroglu had a similar message: “The @Europarl_EN should not ratify the #CAI investment deal until #China proves it can improve the situation of #Uyghurs, Hong Kongers and others!”

MEP Bernd Lange, chair of the EP’s international trade committee, expressed skepticism as well. “Trade does not take place in a vacuum,” he said in a tweet quoting a story on the Hong Kong arrests. “These actions mark a violation of the spirit of the #EU-#China investment deal sustainability commitments. This is clearly not a basis for constructive cooperation.”

As Lange added in a later tweet: “[W]hat was true in the past will also hold true for the #EU-#China investment agreement: there are no built in majorities for trade deals in the @Europarl_EN.”