Brussels, 25/03/2014 (Agence Europe) - Ahead of the first - and much awaited - visit to Europe by China's President Xi Jinping, European and Chinese negotiators will try to clarify their views on the talks that will cover the legal protection of investments and reciprocal market access.
On the eve of the very first visit of a Chinese head of state to the EU institutions on 31 March, the negotiators from the European Commission and Chinese administration are meeting again on 24-25 March - in Brussels - for the second round of negotiations for an investment agreement. The Commission said on Tuesday 25 March that it was expecting Xi's imminent visit to give “impetus” to the talks.
The future agreement on investment, which will replace the 27 bilateral agreements that already exist between the member states and China (only Ireland has not had one thus far), will cover both the legal protection of investments (fair treatment and non-discrimination, compensation in case of expropriation, and legal security) and reciprocal market access for investors from the EU and China, with respect for sustainable development objectives. The parties hope to seal an agreement within 30 months.
“For the EU, an investment agreement with China is an important element for closer trade and investment ties between the economies. One of the EU's priorities in the negotiations will be to remove barriers to EU investors on the Chinese market”, said the Commission in a press release on Tuesday.
The EU and China want to stimulate investment flows that are still below their potential, given the level of integration of their economies. While their trade in goods is enormous (€428.1 billion in 2013), their foreign direct investment (FDI) flows only reached a little over €23 billion in 2012: €15.5 billion of EU FDI in China (in other words 20% of the total foreign investment in the country, which places the EU among the top five investors in China, along with Taiwan, Hong Kong, the US and Japan) and €7.6 billion Chinese investment in the EU (in other words only 26% of foreign investment in Europe). Trade in services, which stood at €49.9 billion in 2013, also has great potential for expansion. Lastly, the EU wants to have access to sectors that are totally closed in China - like the banking sector, where the market share of foreign banks is only 1.82%. (EH)