China's unexpectedly strong recovery from the COVID-19 economic downturn will complicate Europe's aim of protecting liberal values worldwide against China authoritarianism.
Germany chancellor Angela Merkel said Monday economic interests must sometimes trump moral outrage over China violations of human rights and its territorial claims.
Despite the morally troubling choices that lie ahead, Europe must stand-up for its democratic values in its dealings with China, she said at an online conference of legislators from across Europe.
She said, however, China's economic power and massive consumer market means there will always be trade-offs between the European Union's values and its interests.
During the conference, several legislators demanded Merkel take a much tougher stand on human rights violations committed by China against ethnic minorities such as the Uyghurs and Tibetans. In response, Merkel said balance is the key.
"We must define our own European interests, and this also includes common ground (with China) on foreign policy, on economic policy and digital policy and many more," she said.
"The challenge over the next years in relation to China lies in finding a good balance between fighting for our values and our interests."
In early October, Merkel blasted China for oppressing European firms doing business in the country. And in June, she scolded China for not taking action to open up its market and treat foreign companies fairly.
Merkel said China must do more to make it easier for European firms to do business locally if it expects the same treatment in Germany and the EU.
Merkel noted there are still far too many hurdles for European companies to overcome when 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. The EU remains hopeful an agreement can be reached this year. Negotiations for this investment agreement have been limping along for six years.
