China sees EU investment deal as diplomatic coup after US battles

China sees EU investment deal as diplomatic coup after US battles

Pact signed in waning days of Trump presidency and despite warnings from Biden team

When EU and Chinese negotiators began discussions on an investment agreement seven years ago, Beijing hoped it would help counter the Trans-Pacific Partnership trade pact championed by Barack Obama, the former US president.

The TPP was a far more ambitious project than the China-EU Comprehensive Agreement on Investment and a potential geopolitical coup for Washington, as it excluded Beijing. But Donald Trump, Mr Obama’s successor, abandoned the TPP on his first full working day in office.

In the end, it was China’s president Xi Jinping who would steal a march on his US rival by signing both the CAI and the Regional Comprehensive Economic Partnership, a separate regional deal with many of America’s closest Asia-Pacific allies, in the waning days of Mr Trump’s administration.

Mr Xi and Ursula von der Leyen, European Commission president, signed off on the CAI on Wednesday, although it will take at least another year to formally conclude. Valdis Dombrovskis, EU trade commissioner, hailed the pact as “the most ambitious [trade deal] that China has ever agreed with a third country”.