China-EU Investment Agreement Is About to Be Reached

    Negotiations on a China-EU investment pact, which began in 2013, were stalled by EU concerns over the risks posed by a tougher stance on Chinese investment in Europe, according to a European official familiar with the matter. Completing the negotiation of an investment agreement with the Chinese government to further open the Chinese market to EU investors would also result in a major economic and political victory for both parties.

    For the EU, the agreement will expand access to Chinese markets for foreign investors in sectors including automobile and biotechnology. In addition, the agreement will address on what Europe and the United States see as market-distorting Chinese policies: industrial subsidies, state control of businesses, and forced technology transfers.

    For China, the deal is expected to strengthen the country's bid to become a major geopolitical power, which would also strengthen Beijing's long-standing calls to start negotiations on a free trade agreement with the EU. The EU has insisted that it depends on reaching the investment agreement first.

    The investment pact also marks its stance and focus on economic opportunities in Asia as U.S. President-elect Joe Biden advocates for a revival of transatlantic cooperation. Last year, China was the EU's second-largest trading partner (after the US), with bilateral merchandise trade exceeding 1 billion euros ($1.2 billion) a day.