Differences between China and EU mount ahead of annual summit

Chinese Premier Li Keqiang and European Union institution leaders are set to meet in Brussels on Tuesday at the annual EU-China summit but could face differences over trade and investment.

Both sides are struggling to agree to a final summit declaration which the EU sees as a way of guaranteeing that China keeps its promises about opening up China's internal market to European investors.

Although negotiators agreed to a draft statement on Tuesday, Li had yet to sign-off on the final summit declaration, as did Commission President Jean-Claude Juncker and European Council chief Donald Tusk.

The EU is attempting to guarantee that free access to markets goes both ways and not just to the benefit of Beijing. According to Reuters, EU officials are losing patience with the glacial pace of market liberalisation in China.

Brussels was also increasingly worried about the role that state-led Chinese companies were playing in some EU markets and by their acquisitions in strategic sectors, despite denials from China that it seeks to dominate these key industries and that it wants a “win-win” situation with Europe.

The European Commission set out a 10-point action plan last month, outlining the potential areas for increased cooperation ranging from climate change to demands of greater reciprocity, among other things.

Tensions between the two sides were running high after Europe said China was using so-called 'divide and conquer' tactics to undermine the bloc’s collective interests.

During Chinese President Xi Jinping's trip to Italy last month, he signed a landmark Memorandum of Understanding (MOU) for his government's signature Belt and Road (BRI) initiative to connect China and Europe.

Although Italy was not the first EU state to sign such BRI MOUs, it was the first G7 economy to endorse the plan even over the reservations expressed by the Commission.

Another example of the widening split in Europe was the so-called annual "16+1" meeting initiative of China and key countries in Eastern and Central Europe.