The emergence of the COVID-19 "Black Swan" in 2020 will make economic globalization encounter more countercurrent, and the simultaneous shrinkage of the scale of global trade and investment and the total economic volume has attracted attention from all parties. The United Nations Conference on Trade and Development called in the 2020 Trade and Development Report 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 the completion of the negotiations on the China EU Investment Agreement on December 30, which undoubtedly injected strong momentum into the post epidemic global economic development.
This will strengthen 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 EU overtook the United States to become China's largest trading partner. However, in the same year, the stock of EU direct investment in China accounted for only 5.6% of China's foreign investment stock, while the stock of China's direct investment in EU accounted for 4.3% of the total foreign investment stock.
The European Union China Chamber of Commerce believes that the technical advantages of China and the EU are complementary and the investment cooperation potential of both sides is huge. 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 its market access, they would be willing to increase their investment in China. Nearly half of the members were prepared to reinvest 5% to 10% of their annual income, and nearly one third said that their investment would be greater. The breakthrough in 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 EU, the American Association for Asia studies that European enterprises have obtained important business opportunities, especially important market access, through this agreement. In the foreseeable future, Europe will share the opening dividends of China's financial services, electric vehicles, telecommunications and other fields. Previous research by the European Union China Chamber of Commerce shows that although the global economic growth has slowed down in recent years, European enterprises with business in China have made substantial 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 dividend. The conclusion of the subsequent agreement will undoubtedly be conducive to the rehabilitation of the post epidemic EU economy.
Reuters believes that China has made breakthroughs in the RCEP and 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' investment 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, the spirit of cooperation shown by China and the EU in promoting the investment agreement is what is urgently needed for the post epidemic global economic recovery.
After the negotiation, President Woodke of the European Union China Chamber of Commerce said that he hoped the two sides would maintain the current spirit and attitude of promoting the completion of the negotiation and reach relevant agreements as soon as possible, and said that "a strong agreement would be a powerful statement, indicating that constructive contacts can produce results".
The European Union China Chamber of Commerce previously said that while some people in the market encouraged foreign-funded enterprises to take the initiative to "decouple" from China, European enterprises expected to further consolidate their position and participate 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 Foreign Bank said that in the post epidemic era, the China EU Investment Agreement will be a "breaker", demonstrating 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