EU Agrees Investment Deal with China

Jakarta: The European Union (EU) and China have concluded in principle the negotiations for a Comprehensive Agreement on Investment (CAI).  
 
This deal follows a call between Chinese President Xi Jinping and European Commission President von der Leyen, European Council President Charles Michel and German Chancellor Angela Merkel on behalf of the Presidency of the EU Council, as well as French President Emmanuel Macron. 
 
China has committed to a greater level of market access for EU investors than ever before, including some new important market openings. 

China is also making commitments to ensure fair treatment for EU companies so they can compete on a better level playing field in China, including in terms of disciplines for state owned enterprises, transparency of subsidies and rules against the forced transfer of technologies. 
 
For the first time, China has also agreed to ambitious provisions on sustainable development, including commitments on forced labour and the ratification of the relevant ILO fundamental Conventions.
 
"Today‘s agreement is an important landmark in our relationship with China and for our values-based trade agenda. It will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs. It will also commit China to ambitious principles on sustainability, transparency and non-discrimination. The agreement will rebalance our economic relationship with China," President of the European Commission Ursula von der Leyen said in a press release on Wednesday.
 
In terms of market access for EU businesses, China has made significant commitments on manufacturing, the most important sector for EU investment in China. 
 
Manufacturing makes up more than half of total EU investment – including 28% for the automotive sector and 22% for basic materials. 
 
This includes production of electric cars, chemicals, telecoms equipment and health equipment, among others.
 
China is also making commitments for EU investments in various services sectors, such as cloud services, financial services, private healthcare, environmental services, international maritime transport and air transport-related services.
 
In the sectors covered, European business will gain certainty and predictability for their operations as China will no longer be able to prohibit access or introduce new discriminatory practices.
 
Both sides are now working towards finalising the text of the agreement, which will need to be legally reviewed and translated before it can be submitted for approval by the EU Council and the European Parliament.
 
 
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