In our last edition of Bow-Tie Briefing, we discussed the possible travel motivator of the newly signed Regional Comprehensive Economic Partnership (RCEP) between 15 Asia Pacific countries. This time we will focus on another milestone agreement which the Chinese side call “China – EU Bilateral Investment Treaty” (BIT) and the European side call “EU – China Comprehensive Agreement in Investment (CAI).
After seven years of negotiations and despite the uncertainties related to US-China ties that could have slowed down the negotiation process, the EU and China were able to conclude a deal in principle on investments. President of the European Commission, Ursula von der Leyen said, “the agreement is an important landmark in the relationship with China and for values-based trade agenda. It will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs. It will also commit China to ambitious principles on sustainability, transparency and non-discrimination. The agreement will rebalance our economic relationship with China”.
The Agreement on Investment will:
- guarantee an unprecedented level of access to EU investors in China;
- allow EU companies to buy or establish new companies in key sectors;
- help level the playing field for EU companies in China;
- commit China to rules on state owned enterprises and transparency in subsidies.
The parties to this agreement aligned on key milestones and principles that the agreement will regulate. This means that China has committed to a greater level of market access for EU investors, including ensuring fair treatment for EU companies so they can compete on a more level playing field in China. Towards this, the agreement notified China’s obligations in the treatment of state-owned enterprises (SOEs), transparency of subsidies, and rules against the forced transfer of technologies.
Market access commitments by China will focus on three areas including: manufacturing, services and commitments on fair competition.
- More than half of EU investment in China is in the manufacturing sector;
- This is the first time China has committed to market access in this sector with a trade partner;
- China’s commitments in this sector include cars (traditional and new energy vehicles), production of transport and health equipment and production of chemicals, among others.
- Significant, binding commitments in financial services, international maritime services, environmental, construction and computer services;
- Further opening in services related to auxiliary air transport services, cloud services and private health service.
In the next Bow-Tie Briefing edition, we will continue the discussion of this unprecedented agreement and its positive impact on the travel industry, so please stay tuned. 😊