A frustrated German chancellor Angela Merkel said China must do more to make it easier for European firms to do business within its shores if it expects the same treatment in Germany and the European Union.
Merkel said there are still far too many hurdles for European companies to overcome when it comes to investing in China. She complained China has to do more to make it easier for European companies to do business there.
She pointed out any agreement between the EU and China such as the ongoing "EU-China Comprehensive Agreement on Investment" will have to involve reciprocity. This means European companies must enjoy the same freedoms to invest in China as China's firms do in Europe.
"For the investment agreement with China, we naturally expect reciprocity," she said Friday.
"If the Chinese side gives no market access in certain areas, that will naturally mean that access to the European market will also be more restricted."
The EU and China have held fruitless talks for several years about a deal to protect European foreign investments and reinforce intellectual copyrights. Despite still rampant intellectual property thefts by Chinese firms and restricted market access for EU firms, the EU remains hopeful an agreement can be reached this year. Negotiations for this investment agreement have been limping along for six years.
In particular, German firms want better market access in China and more legal certainty for their investments. They also complain The Chinese central government stifles competition by heavily subsidizing Chinese firms competing against European companies.
Merkel's complaint is the latest in a series of similar messages she's directed against China this year. Last June, she scolded China for not taking action to open up its market and treat foreign companies fairly.
"She highlighted the need for further steps on market access, reciprocity and equal treatment of foreign companies," said a German government spokesman.
"Concluding an ambitious investment agreement between the EU and China is an important element in this process."
Merkel said Germany wants rules-based and free multilateral trade plus a strengthened World Trade Organization (WTO). She emphasized German manufacturers depend on both demand and supply chains from China, their country's biggest trading partner.
China is Germany's sixth top export market. It exported $79.7 billion worth of goods to China in 2019. Germany accounted for more than 3% of all exports to China last year. The United States remained China's top exporter.
