China, EU near investment agreement

According to European officials, China and the European Union (EU) are likely to sign a deal this week that would give EU firms better access to the Chinese market, boost competition conditions and protect EU investment in China.

Talks on the investment deal began in 2014, but were stuck for years as the EU said China was failing to make good on promises to lift curbs on EU investment despite a pledge to open up the world’s second largest economy.

But strains in US-China trade ties may have helped shift the Chinese attitude and bring about an agreement between Beijing and Brussels, officials said.

“The talks are about to be concluded. It’s looking good. There are only some minor details left which need to be hammered out,” an EU official with knowledge of the talks said. “As things stand now, the political agreement between the EU and China will be sealed this week.”

Other officials close to the talks said that under the deal China would open up its manufacturing sector to EU companies, as well as construction, advertising, air transport, maritime services, telecoms and, to some extent, cloud computing.

“We get much better market access and the protection of our investments in China. Better market access is something we have been working for for many years, and the Chinese have made quite a big step towards us,” a senior EU official said.

Agreement terms

Talks on investment protection, however, are likely to continue next year and be concluded later, according to an agreed timeline. Also, if there is political agreement on the deal, its transposition into legal texts could take several months. Together with the ratification process, that could mean it will be about year before it is implemented, officials said.

Chinese foreign ministry spokesman Wang Wenbin said that talks had made huge progress and that China hopes a deal can come to fruition “at an early date”.

The negotiations have been conducted by the European Commission, which handles all external trade issues for the 27-nation bloc, with the aim of getting the same access for EU firms that Chinese companies already have to the EU market.

The investment agreement also prohibits forced transfer of technologies by EU firms that establish themselves in China, and contains measures to discipline Chinese state-owned companies when it comes to competition on the Chinese market and rules on the transparency of state subsidies to Chinese enterprises.

Under the agreement, China will also pledge to subscribe to the International Labour Organization’s rules on forced labor.

European Union

The European Union is a political and economic union of 27 member states that are located primarily in Europe. EU policies aim to ensure the free movement of people, goods, services and capital within the internal market, enact legislation in justice and home affairs and maintain common policies on trade, agriculture, fisheries and regional development.