Europe's much-criticized pursuit of Chinese cash may be starting to unravel

Chinese President Xi Jinping, European Council President Charles Michel, European Commission President Ursula von der Leyen, French President Emmanuel Macron and German Chancellor Angela Merkel (clockwise from top left)  during a video conference on the China-EU pact in December 2020.

(CNN)The European Union has a China problem. The bloc, for financial and strategic reasons, wants to build strong economic ties with Beijing that bolster Brussels' desire to be a serious player on the world stage as the leading light of Western values.

The problem is, doing so in any serious way means turning a blind eye to China's well-documented human rights violations.
For much of the past decade, the world's largest trading bloc has gone out of its way to establish an economic partnership with Beijing that doesn't conflict too aggressively with Brussels' lofty values. The EU was criticized from both in and outside the bloc when it announced last December the conclusion in principle of negotiations with the Chinese government on its "Comprehensive Agreement on Investment" (CAI).
    According to EU Commission President Ursula von der Leyen, the agreement, if ratified, "will provide unprecedented access to the Chinese market," while also committing "China to ambitious principles on sustainability, transparency and non-discrimination."
      Any agreement like this needs to be approved by the EU's 27 member states and ratified by the European parliament.
      Precisely how bound China would be to any of the EU's redlines was an immediate cause for concern. "The deal makes statements about human rights and forced labor, but there is no way of forcing China to do anything," says Samira Rafaela, a member of the EU parliament who sits on the international trade committee.
      Many of Rafaela's colleagues across the political spectrum clearly agree. Last week, the parliament voted on a motion to freeze the CAI until further notice. Ostensibly, this was in protest at China placing sanctions on five MEPs who had criticized China's treatment of Muslim Uyghurs in Xinjiang among other things.
        However, in reality the sanctions were really the final straw for some who couldn't stomach Brussels striking a friendly deal with a government in Beijing that allegedly imprisons people in forced labor camps, undermines democracy in Hong Kong and is increasingly hostile in its own region.
        "The statement we are sending with this motion isn't simply, if China lifts the sanctions then CAI is back on the table," says Reinhard Bütikofer, chair of the parliament's delegation on China relations. "If sanctions are lifted, we will look at the detail, but it's currently far from satisfactory. It's weak on forced labor, weak on sustainability, weak on dispute resolutions. These problems will still exist even if we resurrect the agreement."
        Given the chances of China lifting these sanctions any time soon is virtually zero, this creates a problem for the top brass in the EU Commission, who have invested a lot of political capital in the deal.
        For the EU's increasingly political executive branch, China formed a key part of its plan to become a bigger player on the global stage and become diplomatically independent of its most important ally: the United States.
        "Strategic autonomy," as Brussels calls it, has been a priority for EU officials who are concerned about Europe's inherent vulnerabilities, be they from Russian aggression in the east, over-reliance on China for medical supplies or the risk of another president like Donald Trump pulling American troops out of Europe.
        "The China agreement was a big plank in that strategy," says Steven Blockmans, director of research at the Centre for European Policy Studies. "If the Chinese and European parliament don't move, the EU risks losing a deal that would have cemented the idea it can make decisions to defend its own commercial interests, without having to call the White House first."
        Despite the European parliament's protests, the commission still thinks the deal is right for the EU. Officials who spoke with CNN explained that they understood the parliament's concerns and that the political conditions didn't exist at the moment. One official even lauded the parliament's action, saying it provided proof that "economic interests will not prevent the EU from standing up for human rights."
        However, they also said this was a rare window of opportunity to get China committing to something on paper, and that window could run out for political reasons -- most notably after upcoming elections in France and Germany, the two member states most supportive of the deal.
        It's at member state level