EU, China to hold talks on stalled investment deal

Brussels/Beijing - German Chancellor Angela Merkel is to speak with Chinese President Xi Jinping on Monday as part of high-level negotiations between Beijing and the European Union that should reinvigorate a stalled investment pact.

A potential agreement between the EU and China

The EU wants to agree on a plan to wrap up the deal, according to a high-ranking EU official, with the goal being to conclude talks by the end of the year.

The European Commission has been negotiating with China on an investment agreement for more than six years.

But Brussels wants further concessions from Beijing on market access and assurances for EU companies.

European Council President Charles Michel said it is time "for real action to address imbalances and show global leadership."

The bloc of must "engage China, while upholding EU interests & values," Michel wrote on Twitter before the talks kicked off.

European Commission President Ursula von der Leyen and Michel are to participate in the video meeting, with an agenda covering climate change, economic and trade issues, and international affairs.

Germany currently holds the rotating EU presidency. Merkel has faced calls at home to take a tougher line on China regarding human rights issues and implementing environmental commitments.

Beijing and Brussels are at odds on a host of issues but also rely on each other in commerce. The EU is China's biggest trading partner, while China is the EU's second-largest trading partner behind the United States.

Beijing for its part is hoping to shore up its ties with Europe while facing an increased backlash from the US.

"China and Europe need each other," wrote Xin Hua, deputy director of the Center for European Union Studies at Shanghai International Studies University, in a piece on Thursday in the state-run tabloid Global Times.

Xin argued that the "institutional structure of global governance" has been dismantled by US "economic nationalism ... and trade protectionism" and that China and Europe needed to join hands to "resist these dangerous currents."

Trade between China and the EU.

The European side is showing concern

But European leaders feel increased pressure at home to hold China accountable over its human rights abuses, including the mass internment of ethnic minorities in the western Xinjiang region, the erosion of Hong Kong's freedoms, as well as Beijing's increased aggression in the South China Sea.

The EU sharply criticized the Hong Kong national security law, passed by Chinese lawmakers in June, which lays down harsh new penalties for crimes including subversion, secessionism and foreign collusion in the financial hub.

Tensions over human rights have spilled into the business world as well.

Joerg Wuttke, president of the European Union Chamber of Commerce in China, said on Wednesday that European companies in China were caught "between a rock and a hard place" when it came to Beijing's track record on human rights.

"Back home, we are forced to have a position on this otherwise we are penalized by the public and the capital market," Wuttke said.

On the sidelines of the main talks, Beijing and Brussels also signed a deal protecting 100 geographical indications (GI) for food and drink products in each other's territories on Monday, following up on an agreement struck last year.

From the EU side, the list of 100 products includes delicacies like France's Champagne, Greece's Feta cheese and Italy's Prosciutto di Parma ham.

And from China, specialities like Anji white tea and Panjin rice are to be protected within the 27 countries of the bloc.

EU Agriculture Commissioner Janusz Wojciechowski said the agreement, once in force, would strengthen trading relations and benefit producers and consumers on both sides.

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