Want China Times | 2014-03-18
Xi to facilitate investment treaty during upcoming EU visit
China’s president, Xi Jinping, is set to visit several European countries including the Netherlands, France, Germany and Belgium next week. During his trip, he will attend the Nuclear Security Summit in The Hague and attend a ceremony celebrating the 50th anniversary of the establishment of his country’s diplomatic relations with France.
Xi will also make his first visit to the EU headquarters in Brussels to facilitate the signing of a bilateral investment treaty (BIT) between China and the European Union.
China mainly relies on dialogue between senior economic officials from the two sides, strategic talks, cultural exchanges and cooperation to facilitate China-Europe ties. Economic talks have been the most effective, with the annual trading volume between China and the EU surpassing US$550 billion and expected to touch US$1 trillion in 2020.
Political ties, on the other hand, have yet to progress as smoothly because of human rights issues in China. However, these ties have seen some improvement with China’s growing economic power and because of the impact of the European debt crisis.
The European market is the best choice for China to strategically tap into the overseas market. According to figures from the country’s Ministry of Commerce, China has become the world’s third-largest country in terms of foreign investment and its investment in the member states of the EU has exceeded US$30 billion in total.
But in reality, Chinese firms still face many challenges. EU member states hold reservations towards Chinese firms because of different political values or given China’s bad human rights record, while some European countries have put in place barriers blocking Chinese firms even though they say publicly that they welcome their investment.
The EU will propose better treatment and protection and improve legal transparency while investing in China. It wants, via the treaty, to protect its current investment in China and facilitate the liberalization of investment in the meantime.
With an increasing number of Chinese firms investing in Europe, China inevitably has to face non-economic factors. Based on a survey in Beijing, 78% of the respondents stated that they had faced difficulties while operating in the EU, citing the complex and difficult procedures for Chinese employees to obtain a work visa in the EU.
The key for China and the EU to successfully sign a BIT is determined by how far China plans to liberalize its the market for the EU.
Meanwhile, negotiations into a partnership and cooperation agreement (PCA) between China and the EU, initiated in 2006, has been suspended because of controversies related to human rights, environmental issues and sustainable development in China.
Based on China’s current economic and political developments, whether Beijing is willing to accept the high standards of the EU is questionable.
There has been a gap between capability and expectation in China-Europe relations. China set the goal of forming a strategic partnership with the EU in 2003, but has yet to achieve that target.
Xi plans to place greater focus on the substantial issues between the two sides, as conflicts in China-Europe ties can only be reduced when the two parties care about mutual benefits and respect each other’s point of view.