The Case for an EU-China Investment Agreement

Trade and investment volumes between the EU and China will continue to grow – but they will also be a source of friction and disputes. Are there ways for the two sides to improve policy conditions for economic integration in order to avoid new tensions and the risk of protectionism escalating? In the absence of other vehicles to improve policy, an investment agreement between the EU and China is the best current strategy for the EU to improve its access to China’s market and resolve sources of tension. China also stands to gain from a strong investment agreement, containing both provisions on market access and protection. Its investment into Europe will increase considerably in the future and Chinese investors will need protection from arbitrary and discriminatory actions by European governments.