'EU signal needed' for investment agreement

Updated: 2013-09-28 01:36

By Fu Jing and Tuo Yannan (China Daily)

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Beijing is still awaiting a signal from Brussels on the launch of long-awaited negotiations for an investment agreement that would expand bilateral market access, said a senior Chinese diplomat.

"We're prepared, but we're still waiting for the European Union to say it is ready to talk," the diplomat surnamed Zhang told China Daily. "We have not agreed on timing, although both sides are committed to moving as soon as possible."

Zhang said that the EU is still waiting member states' agreement to move ahead. It began seeking such agreements in May.

It is expected that member states will make their final decisions in October. Meanwhile, the European Parliament has recently given strong indications that it wants a greater say in the negotiation process.

Zhang made the comments after Wu Hailong, China's ambassador to the EU, said that the long-awaited negotiations could start "hopefully within a few months". He didn't specify any date in his address at Wednesday's gathering in Brussels to celebrate China's National Day, which falls on Oct 1.

But Wu said the coming few months will see several high-level trade, economic and political and strategic events involving Beijing and Brussels. It's very likely that the negotiations will be officially announced at the EU-China summit, scheduled to be held in Beijing in November.

China has already entered into investment protection agreements with most of the member states of the EU. But the Lisbon Treaty authorized the European Commission to negotiate unified agreements on trade and investment on behalf of all member states, once those nations have authorized it to do so.

China and EU had ambitions to speed up the investment and trade negotiations in 2012. They agreed last September to launch negotiations on a bilateral investment agreement as soon as possible.

But at the same time, the EC launched anti-dumping and anti-subsidy investigations into China's multi-billion-dollar exports of solar panel products. Analysts said that Brussels' action has greatly affected bilateral relations, even though an amicable solution was reached.

The top leaders of Beijing and Brussels have not met each other since China's new leadership began to assume power starting last November. But the highest leaders of Beijing have met those of Washington and Moscow at least twice in the previous six months.

EU Trade Commissioner Karel De Gucht said a week ago that while the EU-China investment relationship needed further strengthening, it was a fundamental source of mutual benefit.

"We need to work together to build an economic relationship that is more than the sum of its parts, a relationship that drives growth at home and contributes to growth in the world economy at large," he said in a speech.

De Gucht said the investment agreement was a project that he had high hopes for, but he made no mention of when talks would start.

But he said that there was considerable room for growth in EU-China investment, noting that Europe's investment in China added up to less than 2 percent of its total investments abroad.

"In comparison, 30 percent of our investment stocks are in the United States. China's investments in Europe, while growing, still account for less than 1 percent of total foreign direct investment here. In comparison, 20 percent is American," De Gucht said.

He said bilateral investment would benefit both sides as European investors would have better access to the Chinese market and their Chinese counterparts would be more encouraged to invest in Europe.

"Companies operating in both Europe and China would be able to operate on a more level playing field, no matter what their origin or ownership structures," said De Gucht.

Wolfgang Pape, senior fellow of the Brussels-based Center for European Policy Studies, said that both sides need an investment agreement to protect the interests of investors.

"The agreement will be reached sooner or later as our relationship is so close and important," said Pape. "I also think there will be a possibility of a free trade agreement in the long term between China and the EU."

But Pape said that both sides should go beyond bilateral trade and investment relations to work at the global level for better governance.

"When you have a global agreement for everybody, everybody has the ... same rules to follow."

Contact the writers at fujing@chinadaily.com.cn and tuoyannan@chinadaily.com.cn

Li Xiaofei in Brussels

contributed to this story.