The European Union and China agreed during the EU-China Summit on November 21 that they would start talks on an investment deal. Unlike burgeoning trade in goods and nascent trade in services, investment relations between both parties still lag behind.
Chinese Premier Li Keqiang and European Commission President Jose Manuel Barroso said that the agreement would aim to relax current limitations to investment in China and promote openness and free trade. Premier Li added that although trade relations have been thriving between Beijing and Brussels, there is much more to achieve for both sides, namely develop solid investment ties.
EU officials and observers agree that the planned investment talks will reveal the true attitude of the Chinese towards openness and free trade. The negotiations are believed to challenge Beijing’s willingness to play according to the rules of the World Trade Organization (WTO) as well as demonstrate China’s readiness to compromise. Despite the fact that mutual trade between China and the EU has been thriving, European companies have been complaining about the unjust conditions for foreign firms in China as well as subsidies for Chinese firms, which help them overtake international competitors, and dump.
European Council President Herman Van Rompuy summarized the EU’s position for the upcoming talks by saying that investment, its protection and market access remain very high on Europe’s agenda. He added that a level playing field, transparency and confidence in the rule of law were essential on both sides for business to thrive.
EU leaders hoped that the summit was a chance to set up the direction of partnership with China for the next ten years under new Chinese President Xi Jinping, who took office in March. Chinese Premier Li, on the other hand, called on both parties to handle protectionism and boost trade, and said that he wished EU members to increase exports of high-tech products to China, which is considered part of the endeavor to bring total trade volume between the the EU and China to $1 trillion by 2020.
