EU-China investment deal is running out of time

Significance

According to Beijing, Merkel and Macron showed their willingness to ratify quickly the EU-China Comprehensive Agreement on Investment (CAI). However, opposition to the CAI is growing in Europe, with parliamentarians particularly concerned about Chinese sanctions and China’s record on human rights and labour standards.

Impacts

• The recent European Council rejection of Macron and Merkel’s proposal on Russia suggests the two leaders’ influence in the EU is waning.
• The likely emergence of a right-wing government in Italy in 2022 or 2023 would see Rome hardening its position on China.
• Deterioration in EU-China economic ties would disproportionately hurt economies in southern Europe and Central and Eastern Europe.