The European Union and People’s Republic of China are on the verge of finalizing the long-awaited investment deal
The European Union (E.U.) and People’s Republic of China are on the verge of finalizing the long-awaited investment deal which will give level-playing field to European companies in the Chinese markets.
The deal, which could be finalised as early as this week, would open Chinese manufacturing, construction, financial, advertising, air transport, maritime, environment, telecom and cloud computing sector to European companies.
Talks on the deal began in 2014 but were stucked as China failed to deliver on promises to lift investment curbs, despite a pledge to open up the world’s second largest economy. It is believed that the ongoing trade war between China and United States could have also compelled China to forge an alliance with the E.U.
During a meeting with National Ambassadors in Brussels, the European Commission reported progress on talks with Beijing, including on the core remaining issue of workers’ rights in China.
Speaking on the occasion, a Senior E.U. Official said, “We get much better market access and the protection of our investments in China. Better market access is something we have been working for many years, and the Chinese have made quite a big step towards us.”
Hoping for deal to be finalised soon, the Spokesperson for Ministry of External Affairs – Wang Wenbin said, “We hope the deal can come to fruition at an early date.”
The deal aims to remove barriers to investment in China such as joint-venture requirements and caps on foreign equity in certain industries.
One of the sticking points was China’s demands to access E.U.’s energy market, given its sensitivities over national security. The deal is expected to give Beijing access to a small part of the European renewable energy sector on a reciprocal basis.
The investment agreement also prohibits forced transfer of technologies by E.U. firms that establish themselves in China. There are also measures to discipline Chinese state-owned companies when it comes to competition on the Chinese market and rules on the transparency of State subsidies to Chinese enterprises. Under the agreement, China will also pledge to subscribe to the International Labour Organisation’s rules on forced labour.
Once finalised, its transposition into legal texts could take several months. Together with the ratification process, that could mean it will be about year before it is implemented.
Meanwhile, Poland has suggested the E.U. should wait for U.S. President-elect – Joe Biden to resume office and then discuss the deal with U.S., before entering into a deal with China. However, this move was not discouraged by the other E.U. members.
The upcoming National Security Advisor to Biden – Jake Sullivan has already said that U.S. would welcome early consultations with our European partners on their common concerns about China’s economic practices. The signing of the deal could irate U.S. The deal would come less than a month after the E.U. published a transatlantic strategy in which it urged the U.S. to work with it to meet the strategic challenge posed by China.
