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High Representative of the EU for Foreign Affairs and Security Policy, Josep BorrellPool/Getty Images

Borrell: China’s move in Hong Kong doesn’t endanger investment deals

Foreign policy chief’s confidence is not shared by EU businesses worried about a new legal framework.

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EU foreign policy chief Josep Borrell said on Friday that China's move to strengthen its legal grip on Hong Kong didn't put "investment deals" at risk, flatly contradicting European business groups that say they are worried about commercial ties.

The EU's decision not to take a hard line on China, or use its leverage as the world's biggest trade bloc, comes in stark contrast to the U.S. which is threatening trade measures if Beijing proceeds with imposing national security laws on the former British colony of 7 million people.

Borrell conceded China's decision was of "grave concern" and "not in conformity with its international commitments." He added it could seriously undermine the "one country, two systems" principle that followed the end of British rule in 1997.

He did not, however, mention any action beyond raising "the issue in our continuing dialogue with China."

Talking to journalists in a video press conference after a virtual meeting of EU foreign affairs ministers, he was asked whether China's action imperilled investment deals, and replied "no." He also said that the vote by China's legislature to introduce national security laws didn't put at risk a planned EU-China summit in September in the German city of Leipzig.

Borrell's confidence in continued EU investment is not shared by the powerful German business lobby the BDI or the European Chamber of Commerce in Beijing, which have issued warnings about the commercial threat of a new legal framework.

Borrell said "only one country made reference to the question of sanctions" against China because of the move on Hong Kong.

A Swedish official confirmed Stockholm asked for sanctions because "the government had to bring the Swedish parliament's request to the table."

Borrell, however, reiterated his view that: "I don't think that sanctions are the way to solve our problems with China."

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