Shiro Armstrong is Director of the Australia–Japan Research Centre and the Asian Bureau of Economic Research at the Crawford School of Public Policy at The Australian National University, and is Editor of the East Asia Forum.
24 January 2021
Authors: Shiro Armstrong and Evgeniia Shannon, ANU
On 30 December 2020, all 27 EU member states agreed to the Comprehensive Agreement on Investment (CAI) with China after seven years of negotiation. The deal should bring new market opportunities and protections to European investors in China and boost China’s reforms. Both China and Europe should benefit from better access to capital, while technology, market links and competition bring impetus to growth. Chinese investors are likely to find more certainty in Europe as much of the industrial world becomes more restrictive towards Chinese investment.
This agreement shows that commitment to investment and services liberalisation and protection for Western companies in China is possible beyond China’s WTO obligations. It also shows that China can commit to disciplines on state-owned enterprises, transparency in subsidies and labour and environmental standards that many previously thought were negotiating non-start