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EU leaders to tell China to meet 2019-2020 trade deadlines

By Francesco Guarascio and Robin Emmott

BRUSSELS (Reuters) - European Union leaders will call on China to finalise a stalled investment agreement by the end of the year and again criticise Beijing over its security crackdown in Hong Kong, according to a draft summit statement seen by Reuters.

EU leaders, who are set to discuss their policy towards China at the two-day summit from Thursday, will also renew demands that Beijing make good on promises made in 2019 to open up Chinese markets to European companies.

EU leaders, who have labelled China a "systemic rival", will urge China "to deliver on previous commitments to address market access barriers, to make progress on overcapacity and engage in negotiations on industrial subsidies at the World Trade Organization," according to the draft summit statement.

China and the EU have agreed to finalise an investment accord that was under negotiation for more than six years by the end of 2020, but Brussels says Beijing is reluctant to open up its economy.

Caught in a geopolitical standoff between United States and China, the EU, the world's largest trading bloc, is leveraging its limited power without resorting to a trade war, restricting Chinese investments in Europe until Beijing changes course.

The EU's chief executive and chairman told President Xi Jinping on Sept. 14 to "tear down barriers" to European investment in China, asserting that Europe would no longer be taken advantage of in trade.

The EU is China's biggest trading partner, and China is the EU's second-biggest.

EU leaders will also reiterate they have "serious concerns about the human rights situation in China, including developments in Hong Kong and the treatment of people belonging to minorities".

The West has denounced Beijing's new security law for the former British colony, saying China is reining in basic freedoms enshrined in the "one country, two systems" principle that governs Hong Kong's autonomy.

(Writing by Robin Emmott; Editing by Catherine Evans)