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Ambassador Zhang Ming Takes an Interview with Paul Barber of CGTN on the Conclusion of the China-EU Investment Agreement Negotiation

On December 31, 2020, Ambassador Zhang Ming, Head of the Chinese Mission to the EU, took a TV interview with Paul Barber, host of China Global Television Network (CGTN). Ambassador Zhang answered questions on the conclusion of the negotiation of the China-EU investment agreement. The transcript is as follows:

Q: China and EU have jointly announced the completion of the China-EU investment agreement negotiations as scheduled. How significant is the deal?

A: The China-EU investment agreement negotiation last for 7 years, starting from 2013. After 35 rounds of talks, the negotiation has been finally concluded, as announced by Chinese and EU leaders yesterday. The EU leaders described this achievement as a landmark and milestone in China-EU relations. I fully agree.

This is a balanced, high-level and win-win agreement. President Xi Jinping pointed out that the agreement will widen market access, improve business environment, strengthen institutional safeguards, and create a brighter future of cooperation for both Chinese and EU investors. Ultimately, our citizens will get the benefits.

The agreement demonstrates China’s resolve and confidence to further promote reform andopening-up. It will give a boost to China’s efforts to pursue higher-quality development, and to strengthen links between China's market and global markets.

The agreement is significant not only bilaterally, but also globally. As the COVID-19 is still raging, unilateralism and protectionism are on the rise. Global economy and globalization are meeting headwinds. Yet China and the EU are firm in their commitment to free trade and multilateralism. Concluding the investment agreement is a telling example. The agreement will contribute to global recovery, promote global trade and investment liberalization and facilitation, and boost confidence in globalization and free trade.

Q: What tangible benefits will this deal bring to investors from both sides? In terms of market access, what industries will China open to EU companies?

A:The agreement will further remove barriers to two-way investment. The agreement is much wider in scope than traditional bilateral investment agreement, covering four key areas, namely market access, level-playing field, sustainable development and dispute settlement. Under the agreement, both sides are up to global high-level standards for investment, offering more certainties and facilitation for investors.

On market access, China for the first time commits to a negative-list approach to FDI in all sectors, including service sector. The EU side also commits to high-level market access for Chinese investors. Both sides have agreed to reduce restrictions on enterprises in a wide range of sectors. Both sides commit to fostering a law-based business environment.

The agreement will help unleash potential for two-way investment. Currently, China-EU capital flows are still small. The EU takes up 5% of FDI flowing into China, and China only takes up 3.4% of total FDI in the EU. This does not match the sheer size of Chinese and EU economies. With the agreement in place, two-way investment will be boosted.

The text of the agreement is yet to be published. There will be internal procedures in the coming months before entry into force. The earlier the agreement is ratified, the earlier the companies and citizens will benefit from it. We will continue to work with the EU to make that happen.

Q:The agreement was reached three weeks before the new US administration takes office. It will not help Europe and the United States to form a unified position on China and will affect transatlantic cooperation. What’s your comment on this?

A: The negotiation started 7 years ago. During last year’s China-EU summit, leaders of the two sides agreed to conclude the negotiation by the end of 2020. This year, such commitment was reiterated by our leaders on several occasions. And now we have turned the commitment into reality. As you can see, we are following a roadmap that has been set long time ago. This is not driven by external factors.

China and the EU are two major forces, markets and civilizations. China-EU relationship has a value of its own. It is not attached to any other major-country relations. China and the EU are comprehensive strategic partners and we act independently. We have every good reason to choose to have an investment agreement. In a difficult year of COVID-19, we managed to conclude the negotiation. This is a victory of free trade and win-win cooperation.

The investment agreement is not only beneficial to China and the EU, but also conducive to global recovery. It is good news for all sides and for economic globalization. The agreement is about investment cooperation, not a geopolitical instrument that targets or undermines the interests of a third party. China’s door is open to all. We are keen to develop closer economic ties with all parties.

Q: This year marks the 45th anniversary of the establishment of diplomatic relations between China and Europe, and is a great year for China-EU relations. How do you evaluate the development of China-EU relations this year? What’s the prospect for future development?

A: Indeed, this year marks the 45th anniversary of China-EU diplomatic ties. Looking back, it is fair to say this is a big year for China-EU relations.

Given the COVID-19 and its economic impact, this is a special and difficult year for all. China and the EU opt for mutual support. We work together on the pandemic response and economic policy coordination. This is what partnership is about.

This year, Chinese President Xi Jinping and the EU leaders met via video links for three times. We also held the regular China-EU Summit. We launched the high-level dialogue on environment and climate, and the high-level digital dialogue. We are fostering partnerships for green and digital cooperation.

Despite decline in global trade, China-EU trade has been increasing. China has for the first time become the EU’s largest trading partner. Apart from the investment agreement, we previously signed the GI agreement, offering more opportunities for businesses. We also held the fifth high-level dialogue on people-to-people exchange. We had good discussions on education, science and technology and culture.

Over the past year, China and the EU keep firmly to multilateralism. We support the WHO’s leading role in global response to COVID-19. We both joined COVAX, to ensure vaccine affordability and accessibility. We jointly uphold the Iran nuclear deal, and push for political settlement of global and regional hotspot issues. We both promote cooperation with Africa, and contribute to a more sustainable and safer world.

All this shows that China and the EU are partners, not rivals. Our cooperation and convergence are far more than competition and divergence. As President Xi Jinping said, we need to remain committed to peaceful coexistence, openness, cooperation, multilateralism and dialogue. This is what we have learned in the past decades, and what we should continue to abide by in the future.

Next year, China will start its 14th Five-Year Plan period. The EU will kick off its recovery plan. China-EU relations will embrace huge opportunities. The two sides need to push for early ratification of the investment agreement. We need tocoordinate COVID-19 response, and ensure vaccines are fairly distributed as a global public good. We need to jointly promote global recovery, and uphold an open environment for trade and investment. We need to step up green and digital cooperation, and jointly address global challenges like climate change. We need to promote cooperation under multilateral frameworks, like UN, G20, WTO and WHO. Together, China and the EU can make a big difference for the well-being of mankind.

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