«Today eu and China concluded negotiations on an investment agreement. For more balanced business and trade opportunities,» European Commission President Ursula Von der Leyen said on Wednesday after meeting with European Council President Charles Michel and Chinese Prime Minister Xi Jinping in a statement to politically seal the agreement.
Xi Jinping said his country and the European Union should strengthen dialogue, increase mutual trust, deepen cooperation and adequately address potential differences, according to Chinese state media.
According to the Chinese president, the pact will make an «important contribution» to the construction of an «open global economy» and to boost post-pandemic recovery, the official Xinhua news agency reported.
«Unprecedented» access to the Chinese market
Meanwhile, according to Deutsche Welle, the agreement offers «unprecedented» access to the Chinese market, European leaders said. China is committed in particular to giving European companies access to its manufacturing sector, the destination of more than half of Community investment in the country, including traditional and new-energy cars, the production of sanitary and transport equipment or chemicals, among others.
It will also facilitate investments in its services sector, in particular in financial services, where requirements are eliminated for European firms, as well as environmental, construction, IT, air transport or private health.
A key aspect is that China will eliminate the requirement it imposed until now on European companies to form a joint venture with a Chinese company to enter its market in certain sectors – private hospitals, financial services or cloud computing – allowing them to operate independently.
The pact comes after seven years of negotiations and after Beijing has committed itself to Brussels to move towards ratification of the International Labour Organization (ILO) conventions on forced labour. In addition, China has made commitments on sustainable development, in particular implementing the Paris Climate Agreement, not lowering its environmental and labour standards.
But it will be several months before the signing and its subsequent entry into force, since the text has yet to be finalized, translated and revised by legal experts, before it can be approved and initialized.
The agreement will allow the bloc’s firms to invest in new sectors and withdraw some requirements for joint ventures.
China is also banning the forced transfer of technology from foreign companies and has promised to be more transparent about subsidies and prohibit state-owned enterprises from discriminating against foreign investors.