Beijing envoy warns EU against ‘disastrous’ curbs on China companies

Beijing envoy warns EU against ‘disastrous’ curbs on China companies

Ambassador says bloc should remain open to investment or risk a backlash

Zhang Ming said plans to clamp down on foreign corporate ownership, trade opportunities and 5G mobile communications technology threatened to trigger a backlash from “suspicious” Chinese entrepreneurs.

The ambassador, a veteran diplomat and previously a senior foreign ministry official in Beijing, said EU countries needed to promote international co-operation and free markets. “Otherwise, it’s disastrous for them,” he warned in an interview. “What I hope to see is that the EU will keep to the principles of multilateralism and free trade, as well as the principles of openness, fairness, justice and non-discrimination.”

His remarks highlight growing tensions as the EU makes what critics see as a belated effort to respond to Beijing’s strategic ambitions, nationalistic trade policies and behaviour to western enterprises. EU companies and governments have long complained that China greatly restricts access to its own market and heavily favours domestic businesses.

Mr Zhang said the hardening attitude on the EU side had made “many Chinese entrepreneurs working in Europe suspicious” and “also had some kind of impact on Chinese investment in the EU”.

“My colleagues and I are strongly committed to promoting China–EU co-operation, so I’m following the development with interest and concerns,” said the envoy, a former vice-minister of foreign affairs who took up his post in Brussels in 2017. “Capital is very sensitive, and even cowardly in some cases. In case of any changes or developments, they will feel highly vigilant or even be scared away.”

EU countries are expected in January to publish final recommendations for tougher security checks on 5G equipment companies, of which Huawei of China is a world leader and highly active in Europe. The bloc is also looking at tighter procurement rules and stricter screening of foreign investments, including of businesses that use government backing to gain an advantage when acquiring European rivals.

Diplomats say 2020 is set to be crucial for the EU-China relationship, with bloc leaders hoping to host President Xi Jinping at a summit as both sides grapple with stresses in their ties and tensions with President Donald Trump’s US administration. The EU in March for the first time declared Beijing a “systemic rival” in some areas.

Mr Zhang hit back at suggestions in December by Sabine Weyand, the EU’s top trade official, that talks on a new investment treaty with China, due to be concluded in 2020, were moving at a “snail’s pace” and needed more commitment from Beijing.

“Is it a tactic or a trick played by the EU side?” Mr Zhang asked, insisting there was still “hope” for the negotiations if both sides were prepared to “meet each other halfway”.

He added: “And talking about the speed of the negotiations, I think it’s better to be a down-to-earth turtle than a cunning rabbit.”

The envoy also pointed to potential concerns about a proposed EU carbon border tax, which could hit China’s steel exports to the bloc. “Some are asking whether such a tax is in line with WTO rules, or whether it’s going to lead to protectionism and trade tensions,” he said.

Human rights is another potential flashpoint. Beijing has drawn condemnation from campaign groups and criticism from the EU for interning more than 1m Muslim Uighurs in so-called re-education camps in western China.

The ambassador denounced the European Parliament’s award in December of its Sakharov Prize for freedom of thought to Ilham Tohti, an advocate for China’s Muslim Uighur community who is serving a life prison sentence for allegedly advocating independence for China’s north-west region of Xinjiang.

Mr Zhang accused the EU more widely of “unjust and dishonest rhetoric and behaviour” in its attacks on China’s human rights record.

China’s outreach in Europe is stoking further friction. Mr Zhang hit out at moves in EU countries against the Chinese state Confucius Institute, which Beijing insists is a cultural organisation rather than the propaganda or espionage tool alleged by critics. Vrije Universiteit Brussel in the Belgian capital said in December that it would end its contract with the Confucius Institute in 2020, as the co-operation was “no longer consistent” with VUB’s policies, objectives and “principles of free research”.

“For some time America and some Western politicians and media are quite suspicious of the Confucius Institutes,” Mr Zhang said. “They are making attacks on these institutes, but they have yet to come up with solid evidence, and so such moves are quite radical and discriminatory.”