China-EU Investment Agreement Could Be Struck By Year-End, Says Reports

The European Union and China are trying to strike an agreement on investment by the end of the current year which will give the EU greater access to the Chinese market. Negotiations for this deal has been ongoing for the last six years, said reports quoting diplomatic sources.

If the EU-China Comprehensive Agreement on Investment is signed by the two parties, it would create a level playing field for European companies in China and would also possibly provide a break to the tensions between the two parties over origin of the novel coronavirus pandemic in China and the unilateral actions of Beijing in Hon Kong in imposing a new national security law.

The deal would close the chapter of EU allegations of discrimination and unfair state subsidies local Chinese companies by the government.

“Negotiations are now in their final stages,” Wang Wenbin, a spokesman at the Chinese foreign ministry, said on Friday. Following a push for the deal by Germany, which is the current holder of the EU presidency until the end of the year and is also the largest exporter of Europe to China, a deal was close, an EU official was also quoted in reports as saying.

Talks on the agreement had stalled for years after being initiated in 2014.

The EU had alleged that China had not lived up to its commitment of lifting restrictions on European investment even after promising to open up its economy for European companies. The Chinese economy is the second largest in the world.

On the other hand, the Eu market comprising of more than 450 million potential consumers was already very wide open to Chinese companies. The investment pact is “a key tool to address this lack of balance”, the European Commission, the EU executive, has said.

The relations between the two side – EU and China, had soured earlier this year after a comment by the president of the European Union Chamber of Commerce in China in June when he expressed doubts about a deal being struck by the two parties be the end of the current year as had been agreed by the two side in 2019.

With the United States stepping up its trade war with China and the EU implementing measures to strictly monitor Chinese investment in strategic European sectors, there were fears in China that it could be left isolate din global trade, said reports quoting another EU official.

Sustainable development and labor issues were the primary sticking points in the two sides securing a deal, said reports.  

The eight main International Labour Organisation conventions, which include those related to abolition of forced labour and the right to collective bargaining of employees, are yet to be ratified by China. And according to the EU, these have ot be approved by Beijing prior to singing of any agreement.

According to latest reports quoting a diplomat in n Beijing, China was very ambitious in the deal. “They are asking impossible things,” the diplomat was quoted as saying. “They are asking for openings for Chinese investment in Europe in sectors that are not open to anyone such as energy, water treatment, public utilities.”

(Adapted from

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability

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