The emergence of the "black swan" of the new crown pneumonia epidemic in 2020 has caused more countercurrents in economic globalization. The simultaneous shrinking of the scale of global trade and investment and the total economic volume has aroused the attention of all parties. The United Nations Conference on Trade and Development called in the "2020 Trade and Development Report" that if there is no radical policy to reactivate trade and capital flows, the recovery and development resilience of the global economy will face tremendous pressure.


This call received a strong response at the end of 2020. Following the formal signing of the Regional Comprehensive Economic Partnership Agreement (RCEP) on November 15, 2020, the leaders of China and the EU jointly announced on December 30 that the negotiations on the China-EU Investment Agreement will be completed as scheduled, which undoubtedly injects strong momentum into the global economic development after the epidemic.



This will effectively stabilize the economic, trade and investment cooperation between the world's two largest economies.


In recent years, Sino-European bilateral trade cooperation has been ahead of investment cooperation. In 2019, the European Union surpassed the United States to become China's largest trading partner. However, the stock of EU direct investment in China in the same year only accounted for 5.6% of China's stock of foreign investment, and China's stock of EU direct investment accounted for 4.3% of the total stock of foreign investment.


The EU-China Chamber of Commerce believes that the technological advantages of China and the EU are complementary, and there is great potential for investment and cooperation between the two sides. The EU and China have their respective advantages in emerging fields such as artificial intelligence, 5G and cloud computing. At the same time, the two sides have strong demands for cooperation in the field of industrial technology. According to the "Business Confidence Survey 2020" of the EU-China Chamber of Commerce, 62% of the members said that if China further expands market access, they are willing to increase investment in China. Nearly half of the members are ready to reinvest 5% to 10% of their annual income. One-third of the members indicated that the investment will be greater. The breakthrough in the negotiation of the China-EU Investment Agreement will help the two sides create a transparent, consistent and predictable business environment.


Looking forward to the development trend of major global economies in 2021, major institutions are generally concerned that insufficient policy support may delay the recovery process of major global economies. However, the breakthrough of the China-EU Investment Agreement has provided more certainty to the uncertain global economy.


From the perspective of the European Union, the American Asia Society believes that through this agreement, European companies have obtained important business opportunities, especially important market access. In the foreseeable future, Europe will share the opening dividends of China's financial services industry, electric vehicles, and telecommunications. Previous surveys conducted by the European Union-China Chamber of Commerce have shown that although global economic growth has slowed in recent years, European companies with business in China have made substantial gains. 39% of members said that their revenue in 2019 increased by 20% year-on-year; 11% of members said that the growth rate of their business in China was even higher. Therefore, the EU-China Chamber of Commerce believes that the Chinese market contains unlimited potential, and European companies hope to share the development dividend. The conclusion of a follow-up agreement will undoubtedly be conducive to the restoration of the EU economy after the epidemic.


Reuters believes that China has successively made breakthroughs in RCEP and the China-Europe Investment Agreement at the end of 2020. On the one hand, it reflects China's determination and confidence in promoting a high-level opening up to the outside world. On the other hand, it also lays a good foundation for China to build a new development pattern. The Bank of Spain believes that this breakthrough has multiple dividends for China. A more convenient, transparent, and open bilateral investment environment will effectively promote bilateral investment and add new momentum to the medium and long-term development of China’s economy. More EU companies investing in the Chinese market and the Chinese government’s structural reform policy agenda will further enhance Chinese companies’ international Competitiveness.


It is particularly important to emphasize that the spirit of cooperation demonstrated by China and the EU in promoting the investment agreement is exactly what is urgently needed for the global economic recovery after the current epidemic.


After the completion of the negotiation, Woodk, the chairman of the EU-China Chamber of Commerce, expressed the hope that the two sides will maintain the current spirit and attitude of advancing the completion of the negotiation and reach relevant agreements as soon as possible, and said that "a strong agreement will be a strong statement, showing that constructive contact can produces result".


The EU-China Chamber of Commerce previously stated that there are people in the market encouraging foreign-funded companies to take the initiative to "decouple" from China, but European companies look forward to further consolidating their positions and participating in the competition for market share. The conclusion of a strong China-EU investment agreement shows that deepening cooperation is still the best development path, which can also refute the international "zero-sum game" noise.


The Bank of Spain stated that in the post-epidemic era, the China-EU Investment Agreement will be a “breaker”, showing that countries in Europe and Asia have abandoned the Cold War mentality and are using economic and trade rules to seek closer relations. Under the new bilateral and multilateral trade and investment framework, promoting global recovery requires perseverance from all countries. (Wang Chutian)

Source: Economic Daily