Should China implement new reforms and thus meet EU requirements, trade and investment between the two regions will inevitably increase, given legal guarantees such as transparency of regulations and subsidy policies and equal market conditions. The scope of the IAC covers several very difficult and difficult areas to achieve mutual understanding. However, success is a possibility and could alter the status quo of the existing investment environment and have a significant impact on both sides of the Eurasian continental region. The potential benefits and added value for investors and both economies as a whole could be enormous. At an “open, constructive and tense” virtual summit on Monday, Chinese and European leaders reaffirmed their goal of concluding a bilateral investment agreement by the end of the year. The EU, in particular, has pushed China to reciprocity, open markets and fair competition. But there remains a big gap between the two sides. The lack of reciprocity in access to the Chinese market and the lack of a level playing field for EU investors in China have posed major challenges to the EU-China investment relationship in recent years, as the negotiation of a Comprehensive Investment Agreement (IAC) is seen by the EU as a key instrument to remedy this situation. It should be noted that an additional list of 175 geographical indications will be protected by both parties within four years of the agreement`s entry into force.

The main beneficiaries of foreign investment were the automotive industry, followed by commodities, food and agriculture. As far as foreign investors are concerned, the majority of EU investments have been made by private companies investing in their core activities. On the other hand, most Chinese companies investing in the EU appear to be state-owned enterprises (SOEs). China, in particular, urgently needs the agreement so that it can deal with a united Europe in the area of investment and not individual Member States, in order to compensate for the losses caused by the costly trade war and the continuous decoupling with the United States. Even a diplomatic victory wouldn`t hurt. China is also under pressure because it is counting on German Chancellor Angela Merkel to pressure the deal as an ally.

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Last Modified: abril 8, 2021