EU-China retaliation sanctions could undermine new investment deal

European Union (left) and China flags.

Nelson Ching | Bloomberg | Getty Images

The worsening tensions between the European Union and China could undermine an investment agreement that the two parties have recently negotiated.

The EU imposed sanctions on Monday on four Chinese officials and an entity for human rights abuses in the Xinjiang region of northwest China. The move was part of a coordinated action against Beijing by the United States and its allies, including the United Kingdom and Canada.

China quickly retaliated against the EU, announcing its own blacklist of 10 individuals – including European lawmakers – and four entities.

Beijing’s response, in turn, generated warnings from several members of the European Parliament or MEPs, saying they would not ratify the EU-China investment agreement that was signed in December.

“The lifting of sanctions against MEPs is a precondition for entering into negotiations with the Chinese government on the investment agreement,” said Kathleen van Brempt, a MEP from the leftist Socialist and Democratic group.

S&D is the second largest political group in the European Parliament, with 145 deputies.

The targets of Chinese sanctions have also contributed.

Reinhard Bütikofer, a German MEP, said in a Twitter post that ratification of the EU-China agreement “is not becoming more likely” after Beijing imposed sanctions to “punish” freedom of speech.

Bütikofer is a legislator of the Greens / European Free Alliance group and chairman of the European Parliament’s delegation in China.

Meanwhile, Slovak MEP Miriam Lexmann of the center-right group of the European People’s Party said in a tweet that China’s actions “will make it clear that it is not interested in being a partner, but rather a systematic rival that undermines fundamental values ​​and principles. . “

The European Parliament is expected to vote on the EU-China investment agreement in early 2022, said S&D. The negotiations took seven years and the deal, if ratified, would allow European investors “unprecedented access” to the Chinese market, European Commission President Ursula von der Leyen said in December.

But even before Monday’s retaliatory sanctions, some European lawmakers raised three major concerns about the agreement, casting doubt on its approval.

Beijing summons EU ambassador

Beijing said in a statement that its deputy foreign minister, Qin Gang, summoned Nicolas Chapuis, the EU’s ambassador to China, on Monday night to protest EU sanctions.

The Mandarin statement released on Tuesday said that EU sanctions against China were based on “lies and misinformation” about Xinjiang, according to a CNBC translation. It also warned the EU not to further worsen Europe-China relations.

Human rights groups such as Amnesty International and international organizations, including the United Nations, have accused China of keeping more than 1 million Uighur Muslims and other minorities in detention camps.

In a joint statement released on Monday, the US Secretary of State, as well as Canadian and UK foreign ministers, claimed that “China’s extensive repression program includes severe restrictions on religious freedoms, the use of forced labor, mass detention in internment camps, forced sterilizations and the combined destruction of the Uighur heritage. “

China has repeatedly denied accusations of forced labor and said the camps are re-education camps to eliminate extremism and teach people new professional skills.

– Evelyn Cheng and Silvia Amaro from CNBC contributed to this report.

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