The investment treaty between China and the European Union, guaranteed by institutional openness measures and fair competition rules, will bring more investment opportunities for companies from both sides, officials said on Thursday.
They commented after China and the EU concluded the negotiations of the bilateral investment deal in principle after more than seven years of talks. The progress was announced during the China-EU leaders' meeting via video conference on Wednesday.
The pact opts for pre-establishment national treatment plus a negative list for foreign investment when it comes to market access, said Li Yongjie, director-general of the department of treaty and law at the Ministry of Commerce.
Pre-establishment national treatment refers to affording foreign investors and their investments treatment, during the investment access stage, no less favorable than that afforded to Chinese investors and their investments. A negative list determines which economic activities are prohibited, while all others are considered to be allowed.
The official said this is the first time China has pledged to open all sectors, including the services and non-services industries on a negative list basis, achieving a comprehensive interface with the negative list management system for foreign investment established by the Foreign Investment Law.
The EU, for its part, commits to give China a high level of market access in the treaty and the two sides' commitments concerning market access are not only limited to the pre-establishment national treatment and negative list: There are also special clauses in the treaty to grant investment-related foreign exchanges transfer, she added.
China and the EU vowed to not implement restraints on the number of companies, their production capacity, business turnover, senior executives, local research and development, exports and the location of headquarters in most economic fields, according to the Ministry of Commerce.
Although a long time in the making, the China-EU investment deal marks a constructive moment in troubled pandemic times, said Shada Islam, head of the New Horizons Project, a Brussels-based global strategy and advisory firm, and a long time commentator on EU and Asia affairs.
She said the agreement is testimony to the resilience of economic relations between the two sides, the hard work of negotiators and the farsightedness of European and Chinese policymakers who recognize that rebuilding the global economy post-pandemic will require a steady flow of job-creating trade and investments.
As China and the EU will conduct text review, translation and other works in the next step, Joerg Wuttke, president of the European Union Chamber of Commerce in China, said the chamber is eagerly awaiting the release of the details of this agreement, and hopes to find a robust and bold conclusion.
"A strong agreement would be a powerful statement to show that constructive engagement can produce results," he said.
The conclusion of the negotiations marks a victory that China and the EU have achieved for maintaining multilateralism and free trade, set to benefit global economic recovery at a time when COVID-19 is still raging across the world and protectionism is raising its head, according to a statement released by the Brussels-based China Chamber of Commerce to the EU on Wednesday.