Coronavirus pandemic mires European Union’s market drive into China

Coronavirus pandemic mires European Union’s market drive into China

Germany’s plan to spearhead European Union efforts to gain more access to China’s markets looks to be at risk of stalling as the coronavirus pandemic upends economies.

German Chancellor Angela Merkel planned to welcome Chinese President Xi Jinping to Leipzig in September for a first-of-a-kind summit with the 27 EU heads of state or government, plus the presidents of the EU Commission and Council.

But the meeting is not listed on Germany’s official outline of priorities for its presidency of the EU Council, which it takes up in the second half of the year.

On the weekend, German Foreign Minister Heiko Maas said it was too early to say if the summit with Xi was still on.

An EU diplomatic source agreed, adding – It’s still not decided whether it would be a physical or virtual meeting. I don’t expect a decision before June.

Germany already has its hands full focused on the fight against coronavirus, a potential second wave of infections, reopening the continent, and dealing with what is forecast to be one of its worst economic performances on record.

Overall, the economies of the eurozone are expected to contract by about 7.75% this year far worse than the 4.5% contraction that marked the worst of the 2007-08 financial crisis.

Europe is experiencing an economic shock without precedent since the Great Depression, EU Economy Commissioner Paolo Gentiloni said last week.

While some fear the economic turbulence has weakened the bloc in negotiating with Beijing over an investment protection agreement, a deal that the EU wants to level the investment field and create new markets for European companies in China, a source with direct knowledge described the ongoing EU-China talks on the deal as intensive.

The key for the progress of negotiations would be about reaching an ambitious outcome on state-owned enterprises (SOEs), the disciplines for which have been a major focus for discussions on a level playing field, he said. The EU insists that SOEs engaged in commercial activities should behave commercially just like any other private business.

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