EU hesitant over decision to monitor investments in China: Bloomberg

By Al Mayadeen English
Source: Bloomberg
26 May 2023 19:22

The European Commission is reportedly working on a legal instrument that would facilitate monitoring operations as part of the EU's economic security strategy.

European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, July 14, 2021 (Reuters)

A report by Bloomberg on Friday revealed that European officials are highly anxious about the possible decision to enforce control mechanisms on foreign investments, particularly in China, in light of pressure exerted from the US to do so.

"We are in the early stages of the discussion and will require substantial engagement with member states when the work is more advanced," European Commission Vice President for Trade Valdis Dombrovskis was quoted by Bloomberg as saying following a meeting in Brussels during which officials discussed plans to monitor risky investments.

The European Commission is reportedly working on a legal instrument that would facilitate monitoring operations as part of the EU's economic security strategy.

It is particularly aimed at assessing investments in China which Europe deems risky.

Some officials however told the agency they are skeptical about the viability of such an instrument.

"It is an instrument that is extremely difficult to apply ... Nobody is enthusiastic about it," Xiana Mendez, Secretary of State for Trade at the Spanish Ministry of Industry, Trade, and Tourism, was quoted by Bloomberg as saying.

In January, European Commission (EC) President Ursula von der Leyen said that the EU should de-risk rather than decouple its trade ties with China and that the EU should use its foreign subsidies to do so.

Then in March, she said that the EU plans to modify some of the provisions of the 2020 comprehensive agreement on investment with China due to the changing global environment.

She noted that some investments could pose a risk to the EU's national or economic security, noting that the bloc must be attentive to economic and diplomatic risks arising from cooperation with China.

Following the US lead in severing trade ties with China, the EU is looking to dive head-first into a point of no return as forecasts of economic recession are nearing ahead.

Germany has already announced earlier in the day that its economy had entered recession.

The idea of a trade war is problematic because China has never threatened to defy the sovereignty and integrity of any state in the past.

In some way, it is adequate to say that China is the victim of its success, as it merely played 'by the rules' and propelled itself via fair and open trade practices.

Instead of protesting Washington, its supposed "ally," for its refusal to overturn its subsidy program, the bloc is resorting to punishing China instead, reflecting the likes of a child whose unable to stand up for itself against its bully - so instead it seeks to bully another.