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EU-China investment agreement: A checklist

German Chambers of Industry and Commerce | 22 May 2020

EU-China investment agreement: A checklist

The importance of close economic ties of the German economy with international markets and the functioning of supply chains is being highlighted during the Corona crisis. Particular attention should now be paid to our relationship with China, which has been Germany’s most important trading partner for the past four years. Many German companies are therefore still hopeful that the current negotiations for an EU-China Comprehensive Agreement on Invest- ment (CAI), can take a decisive step forward this year. The German EU Council Presidency offers a good opportunity for this. In times of increasing global protectionism, which may be exacerbated by the Corona crisis, cooperation with China as an economic partner and com- petitor on an equal footing remains important. In recent years, China has initiated market lib- eralization previously promised: tariff cuts, steps to remove capital restrictions and steps to ease the financial sector. Nevertheless, some improvements are being thwarted by new measures, many reforms are still pending and a level playing field is a long way off. CAI ne- gotiations have stalled for some time. An ambitious offer by China to reduce asymmetries in market access can change this. One thing is clear: The level of ambition must not be lowered when 26 bilateral investment protection agreements between EU States become one. A united EU stance and European foreign policy capacity is crucial in this respect.

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 source: German Chambers of Industry and Commerce