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Broader access to investment 'key' in EU talks

Updated: 2013-11-15 01:36
By Bao Chang ( China Daily)

Negotiations expected to begin during summit later this month

The European Union sees broader access for investment in China as a key issue in negotiations on an agreement that will consolidate 27 bilateral pacts, the head of the EU Chamber of Commerce in China said.

"The more open the market is, the more European investors enter. European companies are very interested in entering the telecommunications, energy, construction, railway and financial service industries in China, if access can be further eased through a bilateral investment treaty," Davide Cucino, president of the chamber, told China Daily.

In mid-October, the European Commission authorized the EU to launch long-awaited negotiations on the investment agreement with China.

Two weeks later, Shen Danyang, spokesman at the Ministry of Commerce, called for adequate preparations for the negotiations, which are expected to begin during the China-EU Summit later this month.

Currently, 27 out of 28 EU members have signed bilateral investment pacts with China, all of which will be consolidated into a comprehensive agreement between China and the EU.

EU Ambassador to China Markus Ederer said on Thursday that the two sides will discuss topics including regional cooperation, China's urbanization drive, market access, government procurement and export credit.

"The agreement needs to secure existing openness and deliver new liberalization of the conditions for accessing each other's investment market. Crucially, it should also improve the treatment of investors and their assets — including key technologies and intellectual property rights," EU Trade Commissioner Karel De Gucht said.

John Ross, former director of Economic and Business Policy (London), said that European companies see China as one of the most important markets in the world.

EU statistics show that EU companies' investment in China accounted for only 2 percent of the bloc's total overseas direct investment in 2012.

China's investment in the EU accounts for 2.2 percent of its total foreign investment.

"A comprehensive, high-quality bilateral investment treaty is crucial to boost investment between the two large economies," Cucino said.

"Although capital outflow back to developed economies did occur during the financial crisis, China has maintained a business environment that is still very attractive to European investors."

According to a business confidence survey for 2013 conducted by the chamber and Roland Berger Strategy Consultants, of 550 European companies surveyed — all with a presence in the Chinese market for more than five years — 86 percent are considering further investment to expand operations, while 41 percent are planning merger and acquisition deals this year.

As to boosting China's investment in the EU, the chamber said that the bloc welcomes the entry of Chinese investors into diverse sectors in the region, and it will take more steps to facilitate investment.

For the first three quarters, China's investment in the EU surged 108 percent.

Chinese corporate investment in Europe soared in recent years. Prior to 2008, the nation's annual investment in Europe was less than $1 billion, but by 2011 it had increased to $10 billion.

By 2020, China's total investment in the EU is expected to reach $250 billion to $500 billion.

"Promoting investment facilitation is a first step between China and the EU. The government's support in providing services and taking measures to improve the investment environment is essential for leading companies' investment decisions," said Ma She, deputy director-general of the department of European affairs at the Ministry of Commerce.

Chinese companies investing in Europe face tough problems and obstacles. There are technical barriers in many areas, and there is no unified foreign investment approval procedure.

The enthusiasm and motivation of Chinese investors have been seriously affected by the abuse of antitrust investigations, harsh visa conditions and inflexible labor laws, according to the Ministry of Foreign Affairs.

"Protectionism has been rising in Europe in recent years. We hope the EU will pay full attention to these issues, create a good atmosphere and environment for Chinese enterprises to invest and provide the necessary facilities," said Qi Mei, counselor from the department of European affairs at the Ministry of Foreign Affairs.

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