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German Chancellor Angela Merkel after a meeting related to the China investment deal. Photo: Sean Gallup/Getty Images

The European Parliament voted overwhelmingly to freeze efforts to ratify a landmark investment deal with China until Beijing lifts sanctions imposed in retaliation for the EU's condemnation of China's human rights abuses.

Why it matters: It's a major blow to the relationship at a decisive moment, as tensions between Washington and Beijing have left Europe caught between the trans-Atlantic alliance and the economic temptations of greater access to the Chinese market.

Background: EU leaders and China finalized the long-delayed Comprehensive Agreement on Investment in December, appearing to defy resistance from the European Parliament and a request for consultations from the incoming Biden administration.

  • The deal would open up both markets to investment and commit Beijing to ending certain trading practices, thus strengthening economic ties between the EU and its second-largest trading partner.
  • The finalized agreement came at a time of increasing international scrutiny of China's abuses against Uyghur Muslims, including the use of forced labor.
  • The European Commission insisted to skeptical EU lawmakers that it would "remain uncompromising as to using all tools possible to eradicate any form of forced labour," and that the investment deal would play an important role in that effort.

Everything changed in March, when the EU joined the U.S., U.K. and Canada in imposing sanctions against several Chinese officials involved in the mass detention of Uyghurs and other ethnic minorities in the northwest region of Xinjiang.

  • China responded furiously, sanctioning 27 EU ambassadors, several think tanks and scholars, and prominent members of the European Parliament who had been critical of Beijing, accusing them of spreading "lies and disinformation" and meddling in China's domestic affairs.
  • For members of the EU Parliament, which had yet to ratify the agreement, the sanctions were a deal-breaker. “It seems unthinkable that our Parliament would even entertain the idea of ratifying an agreement while its members and one of its committees are under sanctions,” member of Parliament Marie-Pierre Vedrenne said at the time, according to Politico.

Between the lines: Despite the uproar in the European Parliament, German Chancellor Angela Merkel hailed the investment deal as a "cornerstone" of economic ties between China and the EU as recently as late April.

The bottom line, via Axios China expert Bethany Allen-Ebrahimian: The Chinese government has bungled its relationship with the EU, just as it seemed that Beijing had successfully driven a wedge between a Trump-weary Europe and the Biden administration.

Go deeper

Mar 9, 2021 - World

Report: "Clear evidence" China is committing genocide against Uyghurs

The scene in 2019 of a site believed to be a re-education camp where mostly Muslim ethnic minorities are detained, north of Kashgar in China's northwestern Xinjiang region. Photo: Greg Baker/AFP via Getty Images

Chinese authorities have breached "each and every act prohibited" under the UN Genocide Convention over the treatment of Uyghurs and other Muslim minorities in China's Xinjiang province, an independent report published Tuesday alleges.

Why it matters: D.C. think-tank the Newlines Institute for Strategy and Policy, which released the report, said in a statement the conclusions by dozens of experts in war crimes, human rights and international law are "clear and convincing": The ruling Chinese Communist Party bears responsibility.

Ben Geman, author of Generate
Aug 27, 2021 - Politics & Policy

Kerry heads to China with coal on the agenda

Photo illustration: Aïda Amer/Axios. Photo: Brian Snyder/AFP via Getty Images

Special Climate Envoy John Kerry heads to China next month with plans to prod the world's largest carbon emitter on taking stronger climate steps as the crucial United Nations summit looms this fall.

Driving the news: Kerry will be in Tianjin, China from Sept. 1-3 after an Aug. 31 meeting in Tokyo, per a source familiar with the plans and published reports.

Aug 27, 2021 - World

U.S. blocks Chinese solar panel imports over forced labor concerns

Solar panels. Photo: Tao Liang/Xinhua via Getty Images

U.S. Customs and Border Protection started detaining solar panel imports from Chinese companies that allegedly source products from Xinjiang forced labor, Washington Post reports.

Why it matters: China is the supply chain leader for solar energy equipment, but concerns over human rights violations led the Biden administration to order a ban in June.