Brus­sels warns it may re­strict Chi­nese in­vest­ment un­less Bei­jing does more to open its mar­kets

Iran Daily - - Global Economy -

China and the Euro­pean Union recorded some €560 bil­lion in trade in 2019, with the EU post­ing a trade deficit of €164 bil­lion. The two sides have been work­ing on a ‘Com­pre­hen­sive Agree­ment on In­vest­ment’, aimed at cre­at­ing ‘new in­vest­ment op­por­tu­ni­ties for Euro­pean com­pa­nies’ in China, for over half a decade now.

Talks on the new Eu-china in­vest­ment agree­ment “have en­tered a crit­i­cal stage” ow­ing to Chi­nese in­tran­si­gence, and Brus­sels is pre­par­ing to in­tro­duce re­stric­tions against Chi­nese in­vest­ment cap­i­tal into Europe un­less Bei­jing agrees to the Euro­pean bloc’s de­mands on mar­ket ac­cess, Euro­pean Com­mis­sion Ex­ec­u­tive Vice Pres­i­dent for Eco­nomic Pol­icy Valdis Dom­brovskis has in­di­cated, sput­niknews. com re­ported.

“We need to ad­dress the is­sues re­lated to state-owned en­ter­prises, we need to ad­dress is­sues re­lated to sub­si­dies, to forced tech­nol­ogy trans­fer,” the of­fi­cial said, speak­ing to the Fi­nan­cial Times.

Al­leg­ing that there was “a great asym­me­try in mar­ket ac­cess,” Dom­brovskis em­pha­sized that “a num­ber of sys­temic is­sues…still need to be ad­dressed” be­fore an in­vest­ment treaty can be signed. Pre­vi­ously, ne­go­ti­a­tions were ex­pected to wrap up by Septem­ber in time for a since-post­poned

Eu-china sum­mit.

Late last week, Euro­pean Com­mis­sion trade pol­icy chief Sabine Weyand said she hoped to see “a bit of clar­ity” on the sta­tus of the treaty by the end of July.

Her com­ments fol­lowed a muchan­tic­i­pated Eu-china video­con­fer­ence sum­mit last week, at­tended by se­nior Euro­pean of­fi­cials, in­clud­ing

EC Pres­i­dent Ur­sula von der Leyen and for­eign pol­icy chief Josep Bor­rell, as well as Chi­nese Pres­i­dent Xi Jin­ping and Prime Min­is­ter Li Ke­qiang, which did not pro­duce a joint state­ment, and which the FT de­scribed as “frosty.”

Chi­nese for­eign di­rect in­vest­ment in Europe dropped to just $19 bil­lion in 2019, down from nearly $100 bil­lion two years ear­lier. The drop was at­trib­uted to stricter Chi­nese cap­i­tal con­trols, lower liq­uid­ity and geopo­lit­i­cal ten­sions be­tween Bei­jing and the Us-al­lied bloc. Nev­er­the­less, Chi­nese com­pa­nies have been at­tempt­ing to ramp up their con­trol of Euro­pean in­fra­struc­ture, even as coun­tries in­crease re­stric­tions in a bid to re­duce Chi­nese own­er­ship.


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