In line with expectations the European Union and China agreed on Wednesday to enter into an investment agreement that would allow EU companies to gain better access to the Chinese market, improve better trade relations and protect EU investment in China.
Discussions on investment agreements have been underway since 2014 but stalled for years as Beijing allegedly failed to make promises to lift sanctions on EU investments. However, it is expected to take at least another year to take effect. This is part of a new trade relationship with China, which the EU sees as positive partners and rivals.
With the agreement, European Union companies will be allowed to operate in China in sectors including electric cars, private hospitals, real estate, advertising, the maritime industry, telecommunications services, airline booking systems and land operations.
At the same time, China will impose a forced transfer of technology from outside companies. The Chinese administration has also promised to act more transparently on subsidies and prohibit state-owned companies from discriminating against foreign investors.
The good news is, U.S. security adviser Jake Sullivan has said that the U.S. administration under Joe BIden will welcome the initial consultation.
However, some analysts have argued that China will not arbitrarily enter into free agreements and will reciprocate. On that basis, the EU states that they will try their best to ratify a more integrated law.
The euro jumped to its latest high since April 2018 at 1.2295 against the US dollar with a strong trade of 0.38%.
