European Union and China poised to sign a significant investment deal

European Union and China poised to sign a significant investment deal

Kanako Mita and Lee Jay Walker

Modern Tokyo Times

A major investment deal between China and the European Union (EU) looks set to be signed in 2021. If so, EU business companies would gain important access to the lucrative Chinese market. Therefore, optimism is growing that thorny issues will be resolved by both parties.

China is increasingly disillusioned by sanctions and trade disputes with America. At the same time, Japan is often chirping in when it comes to geopolitical issues – and not economic issues. Hence, political elites in Beijing have much to gain from reducing heavy demands.

The BBC reports, “According to multiple reports, the deal would open up China’s manufacturing sector to EU companies, as well as construction, advertising, air transport and telecoms.”

Initial talks began in 2014 but met many problems. Yet, recent economic and geopolitical changes are helping both parties to resolve past stumbling blocks. For example, China had hoped to gain greater access to the energy market of the EU. Thus fears over national security created tensions. However, limited access now looks acceptable to China and the EU.

Issues related to joint ventures and foreign caps in various sectors in China look set to become more favorable for EU companies. Hence, while human rights and labor laws still need to be remedied, optimism abounds that China and the EU can overcome all bottlenecks.

It is expected that the administration of Joe Biden in America will be negative to certain areas of the investment deal between China and the EU. However, greater resolve in the EU is emerging based on the shifting geopolitical sands and China’s fresh approach.

https://www.bbc.com/news/business-55464564

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