EU-China New Investment Treaty

The European Union and China recently signed a New Investment Treaty after seven years of negotiations. The EU-China Comprehensive Agreement in Investment is the most ambitious agreement China has ever concluded with a third country. The treaty is expected to create friction with the US.

What is the New Investment Treaty?

The treaty will ensure that the EU investors achieve better access to the fast-growing consumer market. It binds liberalisation of Chinese investments and prevents backsliding.

What are the commitments made by China under the EU-China New Investment Treaty?

  • China agreed to remove and phase out joint venture requirements.
  • It will liberalise the financial services under the New Investment Treaty.
  • It has agreed to open its Research and Development biological resources. So far China has not opened its R&D markets to any of the foreign investors.
  • The investment ban on cloud services is to be lifted.
  • China will bind market access for computer services.
  • China is to allow investment in cargo-handling and in full range multi-modal door-to-door transport including domestic leg of international maritime transport.
  • China will eliminate joint venture requirements in rental, estate services, leasing services, market research, etc.

What are the major concerns addressed?

China was long criticised over forced labour in the western region of Xinjiang. More than two million Muslim minority members have been detained in re-education camps. This was a major human rights violation and the biggest obstacle in signing the treaty. However, China has agreed to ratify four outstanding International Labour Organization treaties. Also, it is expected that China is to ratify the International Covenant on Civil and Political Rights. It agrees to clauses that no one shall perform forced or compulsory labour.

China had always relented forced labour conventions and had also denied forced labour camps in Xinjiang.

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