Uncertain outlook for BIT with EU

Nation may re-evaluate negotiation strategy based on fallout of virus

The onslaught of the coronavirus may delay planned ChinaEU bilateral investment treaty (BIT) talks due to difficulties in scheduling face-to-face negotiations, industry insiders said. China may also re-evaluate how it wants to open its economy to European firms based on the impact of the coronavirus.

But as nothing is finalized until a formal text, Chinese observers warned that the EU should never use the virus as a bargaining chip to pressure China into making unreasonable concessions. Both China and the EU are being urged by analysts to take a practical approach in heading toward the treaty.

EU trade chief Phil Hogan said on Tuesday that the BIT may be held up due to the outbreak of coronavirus in China, Reuters reported on Thursday.

According to Hogan, Chinese and EU leaders are scheduled to sign the deal in September on the sidelines of a summit in Leipzig, Germany – an ideal situation. Ahead of that, senior EU and Chinese officials are scheduled to meet in late March. Hogan said that as the March meeting would probably not happen, he is pessimistic that the BIT could be signed in September.

China and the EU are supposed to sign the treaty before the end of 2020, a goal top officials from both sides set in April 2019.

Analysts said that whether the deal will get on track to meet the timetable largely depends on how fast the epidemic is put under control, and whether the two sides take a pragmatic approach to narrow divergences.

“From a technical perspective, the coronavirus has forced China to postpone much of its diplomatic agenda. People-topeople exchanges are also hindered, posing barriers to a new round of negotiations between China and the EU,” Chen Fengying, a research fellow at the China Institute of Contemporary International Relations in Beijing, told the Global Times.

While such a postponement could be made up for by ratcheted-up efforts from both sides afterwards, analysts stressed that the extent to which the Chinese economy is taking a hit from the virus will weigh more on further BIT talks.

“If the inflection point for the epidemic is not within sight in a couple of days, Chinese negotiators need to take account of medium- to long-term economic prospects,” Cui Hong, director of EU Studies at the China Institute of International Studies in Beijing, told the Global Times on Thursday.

Some top economists estimated that China’s GDP growth may drop below 5 percent in the first quarter due to the coronavirus outbreak.

Cui stressed that regardless of how Brussels broadsides Beijing, Chinese trade officials need to be sufficiently flexible and adjust their negotiation strategy accordingly.