The emergence of the "black swan" of the COVID-19 in 2020 has led to more adverse currents in economic globalization, and the synchronous shrinkage of the scale of Global trade and investment and the total economic volume has attracted attention from all parties. In the 2020 trade and development report, the United Nations Conference on Trade and development called for that without radical policies, trade and capital flows cannot be reactivated, and the recovery and development resilience of the global economy will face enormous pressure.
This call received a strong response at the end of 2020. Following the formal signing of the regional comprehensive economic partnership agreement (RCEP) on November 15, 2020, the leaders of China and the EU jointly announced on December 30 that the negotiation of the China EU investment agreement was completed as scheduled, which undoubtedly injected strong momentum into the global economic development after the epidemic.
This will effectively stabilize the economic, trade and investment cooperation between the two major economies in the world.
In recent years, China EU bilateral trade cooperation has been ahead of investment cooperation. In 2019, the European Union surpassed the United States to become China's largest trading partner. However, in the same year, the EU's direct investment stock in China accounted for only 5.6% of China's foreign investment stock, and China's direct investment stock in the EU accounted for 4.3% of the total foreign investment stock.
The European Union China Chamber of Commerce believes that the technological advantages of China and the EU are complementary, and there is great potential for investment cooperation between the two sides. The EU and China have their own advantages in emerging fields such as artificial intelligence, 5g and cloud computing. At the same time, the two sides have strong demands for cooperation in the field of industrial technology. According to the business confidence survey 2020 of the European Union China Chamber of Commerce, 62% of the members said that if China further expanded market access, they were willing to increase investment in China. Nearly half of the members were ready to reinvest 5% to 10% of their annual income, and nearly one third of the members said that the investment would be greater. A breakthrough in the China EU investment agreement negotiations will help create a transparent, consistent and predictable business environment for both sides.
Looking forward to the development trend of major global economies in 2021, major institutions are generally worried that insufficient policy support may delay the recovery process of major global economies. However, the breakthrough of the China EU investment agreement has provided more certainty for the uncertain global economy.
From the perspective of the European Union, the Asian Association of the United States believes that through this agreement, European enterprises have obtained important business opportunities, especially important market access. In the foreseeable future, Europe will share the opening dividends of China's financial services industry, electric vehicles, telecommunications and other fields. Previous research by the European Chamber of Commerce in China showed that although the global economic growth has slowed in recent years, European enterprises with business in China have made a lot of profits. 39% of the members said that their revenue in 2019 increased by 20% year-on-year; 11% of the members said that the growth rate of their business in China was even higher. Therefore, the European Union China Chamber of Commerce believes that the Chinese market contains unlimited potential, and European enterprises hope to share the development dividends. The subsequent agreement will undoubtedly be conducive to the repair of the EU economy after the epidemic.
Reuters believes that China has made breakthroughs in RCEP and the China EU investment agreement at the end of 2020, which on the one hand reflects China's determination and confidence to promote high-level opening-up, and on the other hand lays a good foundation for China to build a new development pattern. Spain's foreign bank believes that this breakthrough has multiple dividends for China. A more convenient, transparent and open bilateral investment environment will effectively promote bilateral investment and add new momentum to China's medium - and long-term economic development. More EU enterprises will invest in the Chinese market and the Chinese government's policy agenda for structural reform will further enhance the international competitiveness of Chinese enterprises.
In particular, it should be emphasized that the spirit of cooperation shown by the promotion of the investment agreement between China and the EU is urgently needed for the global economic recovery after the epidemic.
After the completion of the negotiations, Woodcock, President of the European Union China Chamber of Commerce, expressed the hope that the two sides would maintain the current spirit and posture of promoting the completion of the negotiations and reach relevant agreements as soon as possible, and said that "a strong agreement will be a strong statement that constructive contacts can produce results".
The European Union China Chamber of Commerce previously said that some people in the market encouraged foreign-funded enterprises to take the initiative to "decouple" from China, but European enterprises were looking forward to further consolidating their position and participating in the competition for market share. The conclusion of a strong China EU investment agreement shows that deepening cooperation is still the best development path, which can also refute the international "zero sum game" noise.
The Spanish bank for Foreign Affairs said that in the post epidemic era, the China EU investment agreement will be a "breaker", showing that countries in Europe and Asia have abandoned the Cold War mentality and are using economic and trade rules to seek to establish closer relations. Under the new bilateral and multilateral trade and investment framework, promoting global recovery requires the perseverance of all countries. (Wang Chutian)
Source: Economic Daily