Political hurdles might delay China and the European Union investment deal agreement

The agreement which is expected to roll back restrictions on investments might face some oppositions in Europe and objections from the Biden administration. Chinese and European leaders entered an agreement that would make it easier for companies to operate in each other’s territory.

Opposition to the deal

This a significant geopolitical victory for China in a period when there are rising criticisms of its human rights record and the handling of the coronavirus pandemic that has left the country seemingly isolated. But this landmark deal faces possible opposition from Europe and Washington. If the opposition pulls through, the deal will ultimately be derailed and illustrate the difficulties of an authoritarian superpower that is both an economic rival and a lucrative market. 

A large part of the European Parliament has to approve the agreement before it can be defective opposes the deal based because it does not address how the human rights infringements in China will be stopped. The aid to the President-elect Joseph R. Biden Jr. has hinted that the incoming administration is not pleased with the deal.

The implication of the deal for the European Union

Chancellor Angela Merkel of Germany has made the agreement a priority because of its relevance to German Carmakers and other manufactures with huge operations in China. The deal softens many of the restrictions placed on European companies operating in China. These restrictions include a requirement that they operate through joint ventures with Chinese partners and share sensitive technology information. 

The agreement will also open up China to European banks and contains requirements intended to minimize secret government subsidies. Foreign companies often complain that Chinese governments secretly subsidize all domestic companies to give them a competitive advantage. This agreement is expected to improve the competitive environment for European countries in China. China’s leader Xi Jinping also made the agreement a priority as he authorizes negotiators to make enough concessions that will prompt the European Union to close the deal.