The Strategic Implications of the China-EU Investment Deal - by Theresa Fallon for The Diplomat

Updated: Feb 4, 2021

The EU-China Comprehensive Agreement on Investment is a win for China, and a blow to transatlantic relations.


January 04, 2021


On December 16, 2019, answering a question at an event in Brussels, Chinese Foreign Minister Wang Yi stated that it was unlikely that China could sign an investment agreement with the European Union, because China was a “developing economy.” Fast forward to December 30, 2020. China’s President Xi Jinping held a long-awaited video conference with European Union leaders including Germany’s Chancellor Angela Merkel and French President Emmanuel Macron. After the video call, the European Union announced in a press statement, “The EU and China concluded in principle the negotiations for a Comprehensive Agreement on Investment (CAI).” What happened?


Chinese foreign direct investment (FDI) into the EU has increased exponentially over the last few years, primarily directed to the strategic areas of infrastructure and high technology. According to European Commission data, cumulative flows of Chinese FDI into the EU amounted to almost 120 billion euros. However, EU investment into China was even higher, at more than 140 billion euros. About half of EU FDI in China is in the manufacturing sector, with the German automotive industry as the main investor.


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Since the above article was written, another article has been published on Politico dated 14th January 2021. The authors of the article are Sarah Anne Aarup, Thibault Larger and Jakob Hanke Vela and the article is entitled:


EU goes softer on China’s subsidies than on Britain’s


The article begins with these comments:


Despite repeated pledges to create a more balanced economic playing field with China, the EU has ultimately taken a softer approach to Beijing's subsidies in a trade deal secured at the end of last year than it did toward Britain in the post-Brexit accord.


One of the more concrete aspects of the EU-China Comprehensive Agreement on Investment is that Beijing has secured a greater threshold within which it can give cash to its companies under the terms of the pact than Britain did in its deal, without having to be transparent about it.


For the full article in pdf, please click on this link:

Article for Politico 14.01
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Another article has been published today by New Europe (https://www.neweurope.eu/)


The EU-China investment agreement is a disaster for the West


By Robert Tyler

Political Projects Manager of the ECR Party


January 23, 2021


The EU-China Comprehensive Investment Agreement that was announced in December 2020 at joint virtual press conference between Ursula von der Leyen, Charles Michel, Xi Jinping, Angela Merkel and Emmanuel Macron is a disaster for the western world. It fails to address human rights violations in China. It doesn’t tackle the problem of forced labour (slavery). It legitimises an authoritarian regime. And most of all, it won’t create the jobs for Europeans that it promises.


The Investment Agreement, which is yet to be made available to the public or Members of the European Parliament, is billed as being a vehicle to bring new investment from the People’s Republic of China to the European Union. Whilst on the surface this may seem fine, according to articles produced by those few who have seen the agreement, there are strings attached.


To read the full article, please follow this link:

https://www.neweurope.eu/article/the-eu-china-investment-agreement-is-a-disaster-for-the-west/

European Council President Charles Michel arrives for an EU-China Leaders’ meeting video conference at the European Council headquarters in Brussels, Wednesday, Dec. 30, 2020.



Credit: Johanna Geron, Pool Photo via AP

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