MNI INTERVIEW: China/EU Treaty On Track Despite 5G Moves

China and the E.U. are on track to wrap up a bilateral investment treaty after seven years of talks, finding common ground on issues such as data regulation and 5G infrastructure, despite European moves to restrict access of telecommunications companies deemed to be security threats, a policy advisor with China's Ministry of Commerce told MNI.

A further round of talks this week aims to finalise the agreement's text and add final touches to rules on the key issue of market access, Yao Ling, director of a research centre under the Ministry of Commerce, said in an interview, in which she rejected any suggestion that China has fast-tracked E.U. negotiations in reaction to rising U.S. trade tensions, noting that the talks have been underway since 2014.

Her comments struck an optimistic tone after the European Union said on Sept. 14 that more work was urgently needed on the issues of rebalancing market access and on sustainable development to strike a deal. A European official who spoke to MNI said only that talks were ongoing.

"The progress made so far has not come easily," Yao added, adding that the EU's insistence on including ambitious items such as expanded market access, as well as sustainable development, were beyond the scope of many of China's previous bilateral investment deals.

"Substantial" progress has been made on agreeing competition rules, covering areas such as technology transfer, subsidy transparency and state-owned enterprises, Yao said.

E-COMMERCE

In addition to the deal, the two sides have reached understandings to allow cooperation on cross border e-commerce and also in 5G infrastructure, said Yao. This latter progress comes despite EU plans to exclude companies judged to be security threats, prompted by concerns over Huawei. Yao said the European stance contrasted with more aggressive moves by the U.S. Key differences remain however regarding data regulation, with China emphasising cybersecurity whereas the EU focusses on consumer privacy, she said.

"In terms of the digital economy, the U.S. and China are in the leading position and the E.U. is relatively slow," she said, adding that Brussels want to develop more technological autonomy from the U.S. "The E.U. could better promote its economy by working with China, especially as the pandemic has had an unprecedented impact on the global economy."

MNI has earlier reported that Chinese policy advisors say that the EU is willing to negotiate with China over its recently-announced Global Data Security Initiative, as Beijing tries to counter a U.S. campaign to persuade its allies to restrict Chinese access to international information technology networks.

The initiative, under which the Chinese government is proposing to limit its own access to overseas data, aims at avoiding a repeat of the problems experienced by Bytedance, the parent company of TikTok, which has been targeted by U.S. authorities.

The eventual draft China-EU investment agreement should not face resistance from the E.U. parliament or member states, said Yao, who pointed to the role played by Germany, which holds the EU's rotating presidency until January 2021, in speeding the negotiations. EU negotiators have briefed EU institutions and member states on progress in the talks with China, Yao noted.

--Additional reporting by David Thomas in Brussels