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European leaders meet via videoconference with Chinese President Xi Jinping to finalize the investment deal. Photo: Johanna Geron, Pool Photo via AP

The European Union on Wednesday finalized an agreement in principle on a long-delayed investment deal with China, appearing to defy resistance from within the EU and a request for consultations about "common concerns" from the incoming Biden administration.

Why it matters: The deal will open up both markets to investment and commit Beijing to ending certain unfair trading practices, strengthening economic ties between the EU and its second-largest trading partner.

Yes, but: The deal comes at the end of a year in which international scrutiny of the authoritarian Chinese government has grown to new heights over Beijing's handling of the coronavirus outbreak, crackdown on Hong Kong's pro-democracy movement, mass detention of Muslim minorities and other human rights abuses.

  • Members of the European Parliament, which still has to approve the deal, had mounted a last-minute bid to block the deal over China's use of forced labor, especially in the region of Xinjiang, where over 1 million Uighur Muslims and other ethnic minorities have been detained in "re-education camps."
  • Satellite imagery, interviews and government documents reported by BuzzFeed News on Tuesday revealed that China has built over 100 new factories on the same sites as the internment camps.
  • In an unusual intervention, President-elect Joe Biden's national security adviser Jake Sullivan cautioned European capitals against rushing into the deal, tweeting: "The Biden-Harris administration would welcome early consultations with our European partners on our common concerns about China's economic practices."

But despite resistance on either side of the Atlantic, the European Commission pushed forward with the talks and claimed in a breakthrough this week that China had made an "important commitment" to “make continued and sustained efforts” to pursue international forced labor standards, according to the South China Morning Post.

  • The Commission insisted to skeptical EU lawmakers that it "will remain uncompromising as to using all tools possible to eradicate any form of forced labour," and that the investment deal will play an important role in that effort.
  • Beijing, meanwhile, has denied all allegations concerning the use of forced labor, accusing those who have reported on the detention camps of meddling in domestic affairs.

Between the lines: Critics of the deal say that China acceded to European demands after seven years of negotiations in order to drive a wedge between Washington and Brussels, at a time when Biden is expected to continue some of Trump's hardline policies toward Beijing. European officials insist it will not disrupt Western cooperation on China's abuses.

Go deeper: More details on the deal from the Wall Street Journal

Go deeper

Jan 26, 2021 - World

DOJ considering amnesty for foreign funding disclosure

Photo: Brendan Smialowski/AFP via Getty Images

The Department of Justice is considering an amnesty program that would allow researchers to disclose previous foreign funding without penalty, the Wall Street Journal reports.

Why it matters: The department is facing mounting criticism that its prosecutions of academics who failed to disclose China ties is too harsh.

Jan 26, 2021 - World

Former Google CEO and others call for U.S.-China tech "bifurcation"

Illustration: Aïda Amer/Axios

A new set of proposals by a group of influential D.C. insiders and tech industry practitioners calling for a degree of "bifurcation" in the U.S. and Chinese tech sectors is circulating in the Biden administration. Axios has obtained a copy.

Why it matters: The idea of "decoupling" certain sectors of the U.S. and Chinese economies felt radical three years ago, when Trump's trade war brought the term into common parlance. But now the strategy has growing bipartisan and even industry support.

In cyber espionage, U.S. is both hunted and hunter

Illustration: Eniola Odetunde/Axios

American outrage over foreign cyber espionage, like Russia's SolarWinds hack, obscures the uncomfortable reality that the U.S. secretly does just the same thing to other countries.

Why it matters: Secrecy is often necessary in cyber spying to protect sources and methods, preserve strategic edges that may stem from purloined information, and prevent diplomatic incidents.