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Brussels will seek a 'gradual rapprochement' with Beijing, although 'systemic rival' tag to stick.

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The EU's review of relations with China this autumn should aim for a new dialogue and even a "gradual rapprochement" between the two trading powers to unfreeze an investment deal, European Parliament International Trade Committee Vice President and MEP Iuliu Winkler told MNI.

EU leaders are due to discuss the erosion in bilateral relations in an informal meeting under the Slovenian presidency in October – after the EU-China Comprehensive Investment Agreement (CAI) was put on the shelf by Brussels following EU sanctions imposed on China in May and subsequent tit for tat action by Beijing.

Winkler, a Romanian member of the European People's Party, says he doesn't expect the EU to change its 2019 China Strategy description of the country as a "partner, economic competitor and systemic rival", but adds that the aim should be to at least start a fresh dialogue.

"As far as the 'systemic rival' specification is concerned, I can assure you that will remain," Winkler says. "We are maintaining the Commission classification proposed in 2019 – partner, competitor and rival. This multi-faceted approach will stand."

This prescription was underlined in the recent report from the EP's Foreign Affairs and International Trade Committees on relations with China, which will be voted on at a plenary session of the European Parliament in September. This key EP report, according to Winkler, was likely to have provided the trigger for EU High Representative Josep Borrell's recent call for a new review of the EU's relations with China.

"In our EU-China relations report there is a specific paragraph where the EP calls on the High Representative and the Council to develop a more assertive China strategy," he says.

BACK TO THE TABLE

But Winkler says the aim of the autumn discussions should be more about getting the EU and China back around the table.

"I would hope we can make a small step towards normalisation," he says. "First of all, we need stabilisation and stability means dialogue – establish a base point and then begin a dialogue," he adds.

That dialogue is much needed as political blockage has put the EP's ratification of the CAI on ice. "Progress has to be achieved," he says, noting that, while technical-level work is ongoing in the Commission on the CAI, "there is no political discussion, so somebody has to start doing something. It is clear that if you are not even sitting at the same table, you can't expect progress."

Political-level headway on the CAI is currently stalled by internal obstacles in both the EU and in China, with elections in Germany on September 26 and France next Spring and, in Beijing, the 20th National Party Congress in October 2022. "In China, there is nothing more important than the Party Congress. They will do nothing to lose face before then," Winkler believes.

INVESTMENT DEAL RESET

Some MEPs are keen to set preconditions for the start of discussions with China on the CAI, such as a commitment to ILO labour standards or a binding roadmap towards other ESG (environmental, social and governance) objectives, but that is "unrealistic", according to Winkler.

"I think the agreement (CAI) is not only good for the EU and member states but is also a sort of trade tool," he maintains. Whereas the US-China Phase One trade deal is "very transactional, a very old school trade agreement – 'you give me this, I give you that', Europe is the first global actor to discuss ESG chapters with China."

"A gradual rapprochement," is the best outcome for the moment, Winkler says.