The EU concluded the EU-China Comprehensive Agreement on Investment in Brussels on December 30, 2020. Justifying the controversial deal, a Press Release that day said the cumulative EU foreign direct investment (FDI) flows from the EU to China over the last 20 years have reached more than €140 billion. For Chinese FDI into the EU, the figure is almost €120 billion. EU FDI in China remains relatively modest with respect to the size and the potential of the Chinese economy. The EU-China Comprehensive Agreement on Investment (CAI), it said, will be the most ambitious agreement that China has ever concluded with a third country. In addition to rules against the forced transfer of technologies, CAI will also be the first agreement to deliver on obligations for the behaviour of state-owned enterprises, comprehensive transparency rules for subsidies and commitments related to sustainable development. The CAI will ensure that EU investors achieve better access to a fast-growing 1.4 billion
consumer market, and that they compete on a better level playing field in China. This is important for the global competitiveness and the future growth of the EU industry. Among other provisions, saying that Chinese SOEs contribute to around 30 per cent of the country's GDP, it claimed the CAI seeks to discipline the behaviour of SOEs by requiring them to act in accordance with commercial considerations and not to discriminate in their purchases and sales of goods or services. 

(Comment: The CAI, which is yet to be ratified by the European Parliament, has already stirred controversy amid suggestions that German Chancellor Angela Merkel was keen on pushing through this agreement. The EU has not got China to accept any of the so-called 'values' that it claims are European principles. The deal comes at an awkward time for US President-elect Biden who has spoken of a united front with Europe against China. Diplomatically, the CAI is Beijing’s second major achievement in economic relations in the past two months, following the November signing of the Regional Comprehensive Economic Partnership among sixteen Asian nations.)

Subscribe to Newswire | Site Map | Email Us
Centre for China Analysis and Strategy, A-50, Second Floor, Vasant Vihar, New Delhi-110057
Tel: 011 41017353