Brussels, 19/07/2016 (Agence Europe) - On Monday 18 July, EU Foreign Affairs Ministers gave their support to the new EU strategy towards China for the period leading up to 2020. This strategy was put on the table by the EU High Representative for Foreign Affairs, Federica Mogherini, on 22 June last and is expected to replace the previous strategy adopted in 2006 (EUROPE 11578).
At an economic level, the Council confirmed that the EU had not excluded the possibility in the long term of negotiating a free trade agreement between the EU and China, following the conclusion of negotiations for a bilateral investment agreement. The Council also pointed out the EU's demands regarding Chinese investment in Europe and the fact that it does not want this to emanate from companies subsidised by the Chinese state.
The Council conclusions emphasise that the bilateral agreement on investment remains the "main priority" of the EU for deepening and recalibrating its economic relations with China. They also called for "more ambitious" reforms to liberalise the Chinese economy, reduce the role of the state and re-establish the situation of fair competition and new outlets for companies.
Once the investment agreement is concluded and the conditions have been met, the EU and China could possibly envisage "broader ambitions" in the long term, such as a free trade agreement, explain the ministers. They also said that on the basis of the provisions in an EU/China investment agreement, the EU would be examining the launch of negotiations for similar agreements with Hong Kong and Taiwan.
Although it is calling on Peking to limit the scope of the EU's investment security examinations in China to questions of national security, the Council is, on the other hand, calling for direct foreign investment from China in Europe to comply with EU policies and legislation in keeping with the principles of the free market. The conclusions explained that particular attention would be paid “to the potential market distortions and other risks of investment by enterprises which benefit from subsidies or other advantages provided by the state".
The Council said that in the trade domain it is expecting the swift conclusion of an agreement on geographical indications on the basis of the highest levels of international protection.
Ministers say that they are "seriously concerned" by overcapacity in certain industrial sectors in China, particularly steel production. They say that they are awaiting “significant and verifiable net cuts" in the country's overcapacity on the basis of a precise timetable of commitments and an independent follow-up mechanism, as recommended by the OECD. (Original version in French by Emmanuel Hagry)