EU turns from China to India on free trade

"It's clear in the current situation, with the EU sanctions in place against China and Chinese counter-sanctions in place, including against members of the European Parliament, [that] the environment is not conducive for ratification," he added.

And the future of the CAI would "depend really on how broader EU-China relations will evolve", he said.

EU leaders and China signed the CAI last December, despite concern on China's persecution of its Uighur Muslim minority, including forced labour and what some Western parliaments have called "genocide".

It has to be ratified by MEPs before it enters into life.

But when EU states blacklisted four Chinese officials involved in the Uighur crimes in March, China reacted with sanctions against five MEPs, an EU Parliament committee on human rights, and an EU Council committee on security affairs.

"Considering the frenzied lobbying of multinationals and the German government for the CAI, it's a huge victory," French socialist MEP Raphaël Glucksmann, who is on China's blacklist, tweeted in reaction to Dombrovskis.

And the EU parliament would have frozen the CAI at its May session even if the EU Commission had wanted to go ahead, Hannah Neumann, a German Green MEP on the human-rights committee, told the South China Morning Post newspaper.

"Given the debate we had in plenary and earlier, in the human-rights committee, I see a majority to put the CAI 'in the freezer', meaning not to deal with it, as long as China upholds its sanctions against elected members of parliament," she said.

In more bad news for Beijing, the commission, on Wednesday, also aims to unveil new restrictions on Chinese state-funded firms buying up European ones in the wake of the pandemic.

China was a "systemic rival", EU anti-trust commissioner Margrethe Vestager told an online conference held by the Wall Street Journal newspaper on Tuesday.

"We want to make sure that we do not end up in a situation where we have a dependency with someone with whom we are in a systemic rivalry," she said.

And foreign ministers from the 'G7' group of Western democracies, meeting in London this week, voiced similar feeling.

"It is not our purpose ... to hold China down," US secretary of state Antony Blinken said.

But he pledged "robust cooperation" with G7 partners on helping the Uighurs, as well as pro-democracy protesters in Hong Kong.

The UK would be "holding Beijing to the commitments that they've made" in international fora on human rights and Hong Kong, British foreign secretary Dominic Raab added.

India summit

At the same time, top EU officials Ursula von der Leyen and Charles Michel, as well as German chancellor Angel Merkel, aim to revive talks on a free-trade pact with India at a video-summit with Indian prime minister Narendra Modi on Saturday.

They also plan to build joint infrastructure projects in the transport, digital, and energy sectors around the world, in a parallel to China's plan to do the same in its 'Belt and Road Initiative'.

Previous EU-India talks stalled in 2013 due to disagreement on technical issues, such as tariffs, patents, and data security.

But according to a draft summit statement seen by the Reuters news agency, the two sides plan to say on Saturday: "We agreed to resume negotiations for a balanced, ambitious, comprehensive, and mutually beneficial trade agreement".

The draft statement did not mention China, but its wording on values sounded like an allusion to Chinese abuses, as well as to its expansionist territorial claims in the Pacific region.

"Our partnership will promote a transparent, viable, inclusive, sustainable, comprehensive, and rules-based connectivity," the draft communiqué said.

"We emphasised our commitment to a free, open, inclusive and rules-based Indo-Pacific space, underpinned by respect for territorial integrity and sovereignty, democracy, and rule of law," it added.