European Commission Eyes Possible Investment Agreement with China

The European Commission aims to negotiate an investment agreement with China, officials announced last Thursday, pending the approval of the bloc’s member states and the conclusion of Beijing’s own internal procedures.

The proposed investment deal would consolidate existing bilateral arrangements that China has with 26 of the EU’s member states into a single, coherent pact. Such an agreement, EU officials say, would better protect EU investment in China and vice versa and reduce barriers to investment. Last year, European companies invested €17.5 billion in China, while China invested €2.8 billion in the EU - representing less than three percent of each side’s total FDI outflows.

Some trade observers have suggested that the proposal could pave the way for the Commission to eventually negotiate a trade pact with the Asian economy, which has finalised the terms of deals with two European countries - Iceland and Switzerland, both of which are not part of the EU - over the past couple of months.