EU 27-CHINA LEIPZIG METING

The most high-profile summit will be the EU27-China leaders’ meeting in Leipzig, Germany, on 14 September that is being organized under the auspices of the rotating German EU Council presidency. This unprecedented format is expected to be attended not only by Xi but by all twenty-seven EU leaders. Initiated by Merkel, the intention is to showcase European unity on China and to allow Xi to hear directly from all of Europe’s leaders at once. The formal summit agenda is expected to cover three broad sets of issues:

1. Cooperation on a joint investment treaty
2. Cooperation on development in third regions such as Africa
3. Climate change

The two key tests for the meeting will be whether the EU27 can maintain unity and whether it can deliver on the crucial question of the relationship with China. Should it waver, the summit could even end up being counterproductive for the EU’s China policy by exposing intra-European divisions.

The most important issue at the Leipzig summit is negotiations over an EU-China Comprehensive Agreement on Investment (CAI). The stated goal is to complete these negotiations before the end of 2020. Although progress has been made since 2018, a finalized agreement still seems quite remote before the summit. EU officials are concerned Beijing is not progressing quickly enough and that political commitment to reach the finish line is lacking on the Chinese side.

For Berlin, the Leipzig meeting is seen as a chance to ensure that German businesses will continue to have access to the increasingly important Chinese market. The larger format, German officials involved in the planning have said, is meant to demonstrate EU unity in dealing with Beijing. But it is unclear how a meeting between EU leaders and Xi will bring Europe closer to a common China policy.

Some European officials worry it may end up sending a very different message two months before the U.S. presidential election: one of EU-China unity. At a time when competition with China is becoming the organizing principle of U.S. foreign policy, Germany is spearheading a European push to deepen cooperation with Beijing, giving Xi another opportunity to show he is serious about opening up the Chinese market and cooperating with the West on areas of common interest. At a time when Europe has defined the relationship with China on three separate levels—partner, competitor, and rival—Berlin sees the Leipzig summit as an opportunity to underpin the partner side of the relationship with substantial agreements. This, Merkel hopes, will ensure that ties do not become defined by competition and rivalry.

Roughly four months before the summit, however, German and European officials see a significant risk that neither the investment agreement nor the climate change and Africa initiatives will come to anything. China has shown few signs that it is prepared to make the concessions that Germany and the EU are seeking. Furthermore, the coronavirus pandemic could further hamper the prospects for a deal by reducing face-to-face contact between the two sides in the months to come. Already, it has led to the postponement of an EU-China meeting in late March that was meant to prepare the groundwork for Leipzig. If the two sides fail to clinch a substantial deal, the pictures of Xi and European leaders gathering in Germany two months before the U.S. election will be the main message. For China, in the midst of an aggressive propaganda campaign to shift blame for the virus to Washington and present itself as a friend of Europe, that alone would be considered a success. But for Germany, failure would give way to a bigger question: how to proceed with China when it is clear that Xi is unwilling to deliver on his promised reforms?