EU-China investment deal receives tentative approval, challenges U.S. trade supremacy

EU-China investment deal-flags
Image source: European Commission Twitter page

The European Union and China reached a trade and investment deal that provides European investors and companies greater access to Chinese markets.

Market observers suggested that the EU-China trade and investment deal, which Xi and the top European leaders agreed to “in principle” will probably anger the United States’ incoming administration.

On Wednesday, Chinese President Xi Jinping and top EU officials including European Council President Charles Michel and European Commission President Ursula von der Leyen held a video conference regarding the EU-China trade and investment deaL.

German Chancellor Angela Merkel and French President Emmanuel Macron also participated in the negotiations with Pres. Xi.

They concluded their intense negotiations on the EU-China Comprehensive Agreement on Investment (CAI) after seven years. The deal “is of major economic significance and also binds the parties into a values-based investment relationship grounded in sustainable development principles,” according to the European Union in a statement.

EU-China investment deal will level the playing field in Chinese markets for European investors

Additionally, the agreement will “help rebalance the trade and investment relationship between the EU and China.” It will “significantly improve the level of playing field for EU investors” by clearly stipulating the obligations of Chinese state-owned companies, enhancing transparency, prohibiting forced technology transfers and other distortive practices. Therefore, European companies will be able to compete fairly in the Chinese market.