Global | EU-China: investments and geopolitics

Summary

On December 30, the EU and China reached an agreement to expand mutual investment opportunities, pending approval by the European Parliament in the second half of 2021.

Key points

• Key points:
• After more than seven years of negotiations, the change in government and trade strategy in the USA—the world's third main player—was a factor that contributed to the agreement. For China, it is a geopolitical victory, and for Europe, it is a sign of the strategic autonomy it is aiming to strengthen.
• The agreement will provide EU investors with unprecedented access to China's economy, eliminating restrictions on investment in manufacturing and services, and promoting competition on a level playing field with state-owned enterprises, with transparency in subsidies and prohibiting forced transfers of technologies.
• The deal allows China to pursue its strategy of closer economic ties with partners other than the USA, thereby strengthening reciprocity in relations with Europe through the relaxation of the world's strictest foreign direct investment regulations, according to the OECD.

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