China and the European Union announced a long-awaited investment deal confirmed by Chinese president Xi Jinping and European Commission president Ursula von der Leyen, media reported on Wednesday.
The Comprehensive Agreement on Investment (CAI) was agreed in principle and was “most ambitious outcomes that China has ever agreed with a third country”, Valdis Dombrovskis, EU trade commissioner told FT in a statement.
“We expect European businesses will have more certainty and predictability for their operations. We have some very welcome changes to the rules of the game, because for a long period, trade and investment relations with China have been unbalanced,” he said.
The news comes amid accusations from the outgoing Trump administration on alleged human rights abuses in China's Xinjiang Uyghur Autonomous Region (XUAR), with tensions set to continue under President-Elect Joe Biden in January.
Beijing has repeatedly and routinely slammed the accusations as false.
A New Deal in EU-Chinese Relations
The deal is set to remove barriers to EU companies investing in the mainland, namely in joint ventures and caps on foreign equity, according to an EU press statement.
Industries such as automotive, private healthcare, airport transport services and computing would be secured, Dombrovskis told FT, adding it would boost cooperation on electric vehicles and hybrid motors.
Core concerns in EU-China trade talks included transparency on subsidies and protection from forced intellectual property and technology transfers, as well as non-discrimination guarantees compared with state-owned enterprises.
All matters were resolved in the talks, allowing Beijing to lock in market access rights and boost its manufacturing and renewable energy industries, FT added
President Ursula von der Leyen tweeted the EU needed to "engage" China and "not just talk to them from a distance".
The deal would uphold EU interests and promote the bloc's core values and provide a "lever to eradicate forced labour. The agreement would also help both sides reach Paris Agreement targets and promote "rule-based multilateralism", she wrote.