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Head of the Department of Treaty and Law of MOFCOM answers journalists’ questions on the conclusion of the China-EU investment agreement negotiations on schedule




On December 30, the leaders of China and the EU jointly announced that the negotiations of China-EU investment agreement were concluded on schedule. The reporters interviewed the head of the Department of Treaty and Law of MOFCOM on issues of related to the agreement.

Could you please brief us on the outcomes and features of the negotiations?

The China-EU investment agreement is a balanced, high-level and mutually beneficial agreement that aligns itself with high-standard international trade and economic rules and focuses on institutional openness.

It is a balanced agreement. First, while making opening-up commitments, the two sides also pay high attention to reserving necessary regulatory power. Second, the two sides focus both on facilitating bilateral investment cooperation and the need for investment to support sustainable development.

It is a high-level agreement. The two sides are committed to investment liberalization and facilitation and have reached high-level negotiation outcomes. The agreement involves far more areas than a traditional bilateral investment agreement. The outcomes cover four dimensions, namely market access commitment, level playing field rules, sustainable development and dispute settlement.

It is a mutually beneficial agreement. Both China and the EU have made high-level and mutually beneficial market access commitments. All rules in the agreement are mutually applicable to both Parties, which would create a level playing field and benefit the companies from China, the EU and the rest of the world.

What benefits will the agreement bring to the companies of the two sides?

As I mentioned, the agreement focuses on institutional openness. The high-level market access commitments will bring more investment opportunities for the companies and the high-level rules on fair competition will provide a better business environment for bilateral investment.

On market access, the agreement adopts the model of pre-establishment national treatment plus negative list. China, for the first time, makes commitments through the form of negative list on all sectors including services and non-services, thus realizing a full alignment with a negative list management system for foreign investment specified in the Foreign Investment Law. The EU also makes relatively high-level commitments to China in the agreement.

In addition, for the market access restrictions that do not discriminate against foreign investment, yet impose major impact on the establishment and operation of enterprises, the two sides commit not to impose restrictions in most economic sectors with respect to the numbers, production output, turnover, senior management and board of directors, local research and development, export performance, and headquarter locations of enterprises, while allowing the transfer of foreign exchange related to investment and the entry and stay of personnel.

On the level playing field, to create a law-based business environment, the two sides have reached consensus on issues closely related the operation of enterprises, including state-owned enterprises’ subsidies, subsidy transparency, technology transfer, standard setting, administrative enforcement and financial regulation.

You just mentioned that the agreement also includes sustainable development. Could you elaborate on that part?

China has been paying great attention to sustainable development, including environmental protection, labor rights protection, our pursuit of the new development philosophy and the people-centered development vision. The fundamental purpose of development is to realize our people’s aspiration for a better life. Meanwhile, we have also noted that it has become a major feature of international trade and economic agreements to include environmental protection and labor issues related to trade and economy in recent years. Hence,the China-EU investment agreement specifically provide for investment-related environment and labor issues. The two sides are committed to promoting investment conducive to sustainable development goals, properly handling the relations between attracting investment and protecting environment and labor rights, and complying with relevant international commitments.

When will the agreement come into effect?

In the next step, the two sides will engage in legal scrubbing and translation of the text, so that the agreement could be signed as soon as possible. The agreement will then come into effect upon the completion of respective internal ratification processes.