On 4 June 1989, the People’s Liberation Army violently cracked down on the pro-reform demonstrations that had occupied Beijing’s central Tiananmen Square for the last two months. Soldiers shot at unarmed civilians, and tanks crushed the bravest who did not flee. Despite deep personal frustration about the demeanour of the Chinese Communist Party (CCP), led by his old friend Deng Xiaoping, US President George Bush Sr. decided against economic sanctions and kept the door to China open. In the outgoing Cold War, Bush sensed, partnership with China would be crucial – both to beat the Soviets and to shape the post-Cold War global economic and political order.

Back in 1989, President Bush received criticism for his course towards the People’s Republic of China (PRC), seen as overly conciliatory and amounting to a betrayal of US values. Aspirations for political liberalisation did not materialise in China. The PRC is still governed by the CCP, and its record of human rights and political freedoms has not really improved since 1989. On the contrary, the Party’s authoritarian grip over civil society has tightened since the beginning of Xi Jinping’s presidency in 2013. Some even draw a connection between Beijing’s crackdown of the student protests on Tiananmen Square in 1989 and Hong Kong in 2019. It may thus come as a surprise that the EU and China on 30 December 2020 concluded seven years of negotiations with a mutual understanding on a Comprehensive Agreement on Investment (CAI). In fact, the European brokers of the CAI now face the same criticism as Bush in 1989: that the agreement is too friendly to China and undermines European values.

The CAI promises to improve the conditions of foreign direct investment (FDI) between the EU and China, which amounted to more than 260 billion Euros over the last twenty years. Under the new agreement, China has promised to open to EU investors and grant them the same access that Chinese investors enjoy on the European market. Thus, the EU has finally gained the “level playing field” it had demanded for a long time while making few new commitments, whereas the Chinese side may be able to fulfil its dreams of easier investments into renewable energies in Europe. Who the real victor of the negotiations is a matter of perspective and depends on the media, political lobbies, and the political analysis industry.

The CAI is not yet a finalised agreement. All the EU and China have achieved so far is a political consensus on the scope of the envisaged treaty, the detailed negotiations for which are yet to commence. Nevertheless, the CAI has already been met with scepticism. Some try to portray it as the instrumentalisation of German industry interests by the Chinese—as if France would ever have agreed to CAI if that were fully true. Others lament China had “secured a clear win in EU trade deal,” ignoring the fact that the CAI is an agreement on investments, not trade. More articulate voices are frustrated about the missing depth of the CAI, contradicting their earlier conclusions that an agreement can only ever solve problems that fall under its explicit scope. Finally, the Financial Times suggests that “China sees EU investment deal as diplomatic coup after US battles,” but fails to name the Chinese source for its claim.

One point of criticism, however, outweighs all mentioned so far: transatlantic unity in approaching China. For the incoming Biden administration, the timing of the announcement of CAI threatens to undermine the foreign policy authority of the new President. When rumours about the imminent conclusion of the EU-China deal emerged in late December, Biden’s National Security Adviser Jake Sullivan tweeted the new administration would “welcome early consultations with our European partners on our common concerns about China’s economic practices.” Yet the announcement arrived too late to influence the negotiations, as Chancellor Merkel had announced her intent to complete the China deal before the German EU presidency ended on 31 December 2020. The last-minute nature of the Biden administration’s message and their knowledge that Merkel planned to push the deal through means they were aware of their diminished role in the negotiations. Thus, the lack of US involvement in the deal should not be interpreted as an impediment for reinvigorated EU-US relations under President Biden. Would the situation be different if the EU had waited a bit longer? Maybe yes. Would it have been easier to strike an agreement? Certainly not. After all, while unity in the transatlantic alliance is essential to tackle the challenges emanating from those dreaming of a post-Western world, it would be strange to regard the EU a vassal of the US that is not allowed to act in its own interest.

Indeed, at the doorstep of a new multipolar world order, the EU must look at the bigger picture. 2020 has been a tumultuous year for the union, severely weakened by Brexit, a crisis of rule of law in Poland and Hungary, and the Covid-19 pandemic. Yet the EU has proven its capability to react to its various challenges: all 27 members have agreed on a budget for the next seven years that contains clauses to strengthen democracy. For the first time, the EU27 will issue common European sovereign bonds to cover the post-pandemic recovery programme NextGenerationEU. And it was the EU, not “Global Britain”, that signed an investment agreement with the world’s largest market. The coincidence with the German council presidency and the prospect of Chancellor Merkel’s retirement may have facilitated this process, but they are certainly not solely responsible. The CAI is a success for the EU that has staked its claim to have a say in the future political and economic order of the planet.

In conclusion, the EU has gained from its agreement with China, and both partners have taken a big step towards a more multipolar world. What happens next could very well determine the future for many years to follow. It does not go without a certain irony that China these days portrays itself as the driver of a more open global market economy, assuming the role which the US played in 1989. China is still far from being an ideal partner for the EU; leading European China experts are therefore right when they demand caution. Both the 1989 and 2020 attempts to ensure a better, more interconnected, and liberal future were untimely but necessary. Sometimes the question is not whether to have the cake and eat it, but whether to have a cake at all. As regards the CAI, the EU and China have only just agreed on the recipe.