The agreement provides European businesses with greater access to the Chinese market, creates a level playing field for companies on both sides and lays the groundwork for more sustainable development.

China commits to open its markets to EU investors more than ever before. EU companies will be given fairer treatment when they compete with state-owned firms. Subsidies will be made transparent, and rules will be put in place against the forced transfer of technologies. What is more, China has for the first time agreed to put into effect provisions on sustainable development. This includes commitments on forced labour and ratification of the relevant fundamental Conventions of the International Labour Organization (ILO).

A video conference on Wednesday was attended, on the EU side, by President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen. The Chinese side was represented by President Xi Jinping. Federal Chancellor Angela Merkel and French President Emmanuel Macron also attended the virtual meeting.

A milestone in relations with China

Commission President von der Leyen described the agreement as an important landmark in the EU’s relations with China. “It will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs,” she commented. She went on to say that it will also commit China to ambitious principles on sustainability, transparency and non-discrimination.

The European Commission has been negotiating an investment agreement with China since 2013. Talks have focused on protection of investments and improved market access, especially for EU companies. The political agreement in principle is an important success for the German Presidency of the Council of the European Union, which has given high priority to relations between the EU and China.