EU and China Agree on Investment Agreement... "Significant Expansion of Access to Chinese Market"

Agreement Reached After 7 Years of Discussions... Potential Friction with the US

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The European Union (EU) and China have agreed to conclude an investment agreement after seven years. As a result, companies from both sides are expected to have easier access to each other's markets, and economic ties are anticipated to deepen. In particular, with China broadly opening its market to the EU, European companies have secured access rights in various industries such as automobiles and telecommunications.

According to Bloomberg and other sources on the 30th (local time), Ursula von der Leyen, President of the European Commission, and Charles Michel, President of the European Council, held a video call with Chinese President Xi Jinping, German Chancellor Angela Merkel, French President Emmanuel Macron, and others, and announced the agreement through a joint statement.

President von der Leyen tweeted, "Today, we have in principle concluded negotiations for an investment agreement with China," adding, "This is for more balanced trade and better business opportunities." She also stated, "This agreement holds economic significance," and "China has promised an unprecedented level of market access to EU investors."

President Xi said through state media, "The investment agreement with the EU will provide investors on both sides with a broader market and a better business environment," and "This agreement demonstrates China's determination and confidence in opening up to the world."

With this agreement, the EU has secured access rights to the Chinese market in various industries including automobiles, healthcare, cloud computing, air transport services, and financial services. Foreign media view that China will open its market to European companies at an unprecedented level through this agreement. Additionally, concerns previously held by the EU regarding state subsidies, state control over companies, and forced technology transfers are addressed in this agreement, improving conditions so that European investors do not suffer losses in the Chinese market.

Furthermore, the agreement includes provisions for sustainable development such as climate change and labor rights. The EU, concerned about forced labor, had demanded these during negotiations, and under this agreement, China has pledged to continue efforts to comply with the International Labour Organization (ILO) conventions prohibiting forced labor.

This agreement was reached seven years after negotiations began in 2014. Since the announcement represents a broad political agreement, it is expected to take several months to a year for detailed discussions, conclusion, and implementation.

Meanwhile, with the EU and China joining hands, there are forecasts that the China pressure strategy of President-elect Joe Biden, who is set to take office in January next year, may face setbacks. A member of Biden’s transition team told foreign media, "The transition team hopes the EU will engage in joint responses to China’s unfair economic practices and other important issues."

Earlier, President-elect Biden stated, "In any matter related to US-China relations, we will be stronger and more effective when surrounded by countries that share our vision for the future of the world," expressing his plan to strengthen solidarity with allies such as the EU to check China.

This content was produced with the assistance of AI translation services.