China seeks to speed up free trade agreements with European Union

Out-Law News | 17 Mar 2014 | 2:50 pm | 1 min. read

Chinese president Xi Jinping will use his visit to Europe this month to speed up negotiations on a bi-lateral China-EU investment treaty and the development of free trade agreements, China has said.

Increased cooperation in the fields of science, technology, energy and environmental issues will also be on the agenda, Xinhua, the Chinese state press agency reported.

Xi is due to visit four European states later this month in his first visit to Europe since becoming president in March last year. He will also attend the forthcoming Nuclear Security Summit 2014  in The Hague, where world leaders will discuss measures to prevent nuclear terrorism around the world. He is expected to meet EU leaders in Brussels towards the end of his trip.

Xi's diplomatic visit follows a mixed year of trade negotiations between China and the EU. Last summer the two economies finally settled a protracted trade dispute about the price of solar panels in the EU, an issue which led to strained relations between the two powers, according to widespread media reports. And last November, both parties agreed to start negotiations on a bi-lateral investment treaty, designed to increase bilateral trade from about $580 billion in 2012 to $1 trillion by 2020.

Chinese foreign minister Wang Yi said that China and Europe will "work intensively to align their respective development strategies", according to the Xinhua statement, "We also hope to speed up negotiations towards a China-EU investment agreement, with a view to future free trade arrangements between China and Europe."

British prime minister David Cameron has said that such an agreement could be a forerunner to a full free-trade deal, said Reuters in January, however EU Trade Commissioner Karel De Gucht has said that such an agreement could be a long way off.

The EU is China's most important trading partner, while China is the EU's second largest trading partner, after the US. According to the Financial Times, Chinese investment in Europe still accounts for less than 1% of the €3tn total stock of inbound foreign investment to Europe.

European investment in China is 2-4% of Europe’s €4.2 trillion outbound investment, depending on whether Hong Kong is included in calculations. The investment agreement aims to help the EU remain relevant in the face of Beijing’s preference for dealing directly with European capitals, the newspaper said.

According to the Xinhua statement, Wang said that Xi would use his visit to Europe to "strengthen win-win cooperation in priority areas such as science and technology innovation, energy and environmental conservation, a new type of urbanization, connectivity, and people-to-people and cultural exchanges."

China will "enhance strategic communications with its European counterparts in international affairs, and work together with Europe to promote democracy in international relations and a more multi-polar world," the statement said.