Just as the United States appears poised to adopt restrictions on outbound investment to China and is increasing forced labor sanctions on western China’s Xinjiang province, a new Chinese initiative could undercut those measures and divide the U.S. from European allies. China and the European Union (EU) signed a Comprehensive Agreement on Investment (CAI) in 2020 to promote free investment flows between the EU and China. The EU never ratified the agreement because China responded in May 2021 to European sanctions on Xinjiang’s forced labor practices with sanctions targeting EU lawmakers and academics. That Chinese response and China’s subsequent support for Russia’s invasion of Ukrai
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