The emergence of the "black swan" of the new crown pneumonia epidemic in 2020 has caused more adverse currents in economic globalization, and the simultaneous shrinkage of global trade and investment scale and economic aggregate has attracted attention from all parties. In the 2020 Trade and Development Report, the United Nations Conference on Trade and Development called for the recovery and development resilience of the global economy to face enormous pressure without radical policies to reactivate trade and capital flows.

This call was vigorously responded to at the end of 2020. Following the formal signing of the Regional Comprehensive Economic Partnership (RCEP) on November 15, 2020, the leaders of China and the EU jointly announced on December 30 that the negotiations on the China-EU investment agreement will be completed as scheduled, which will undoubtedly inject strong momentum into the post-pandemic global economic development.

This will effectively stabilize the economic, trade and investment cooperation between the world's two largest economies.

In recent years, China-EU bilateral trade cooperation has taken the lead in investment cooperation. In 2019, the EU overtook the US to become China's largest trading partner. However, in the same year, the stock of EU direct investment in China only accounted for 5.6% of the stock of foreign investment in China, and the stock of Chinese direct investment in the EU accounted for 4.3% of the total stock of foreign investment.

The EU-China Chamber of Commerce believes that the technological advantages of China and the EU are complementary, and the potential for investment and cooperation between the two sides is huge. The EU and China have their own advantages in emerging fields such as artificial intelligence, 5G and cloud computing. At the same time, the two sides have strong demands for cooperation in the field of industrial technology. According to the "Business Confidence Survey 2020" of the European Union-China Chamber of Commerce, 62% of the members said that if China further expands market access, they are willing to increase investment in China, and nearly half of them are ready to reinvest 5% to 10% of their annual income. A third of members said the investment would be greater. A breakthrough in EU-China investment agreement negotiations will help foster a transparent, consistent and predictable business environment bilaterally.

Looking forward to the development trend of the world's major economies in 2021, major institutions are generally worried that insufficient policy support may delay the recovery process of the world's major economies. However, the breakthrough of the EU-China Investment Agreement has provided more certainty to an uncertain global economy.

From the perspective of the EU, the Asia Society of the United States believes that through this agreement, European companies have obtained important business opportunities, especially important market access. In the foreseeable future, Europe will share the opening dividends of China's financial services industry, electric vehicles, telecommunications and other fields. A previous survey by the EU-China Chamber of Commerce showed that although the global economic growth has slowed down in recent years, European companies with business in China have made substantial profits. Thirty-nine percent of members said their revenue in 2019 increased by 20 percent year-on-year; 11 percent said their business in China grew even higher. Therefore, the EU-China Chamber of Commerce believes that the Chinese market contains unlimited potential, and European companies hope to share the development dividend. The conclusion of a follow-up agreement will undoubtedly be conducive to the recovery of the EU economy after the epidemic.

Reuters believes that China has successively made breakthroughs in RCEP and the China-EU Investment Agreement at the end of 2020, which on the one hand reflects China's determination and confidence in promoting a high level of opening up, and on the other hand, lays a good foundation for China to build a new development pattern. BBVA believes that this breakthrough has multiple dividends for China. A more convenient, transparent and open bilateral investment environment will effectively promote bilateral investment and add new momentum to China’s medium and long-term economic development. More EU companies will invest in the Chinese market and the Chinese government’s policy agenda of structural reform will further enhance the international presence of Chinese companies. Competitiveness.

In particular, the spirit of cooperation shown by China and the EU in promoting the investment agreement is what is urgently needed for the recovery of the global economy after the current epidemic.

After the negotiation was completed, Woodke, chairman of the EU-China Chamber of Commerce, expressed the hope that the two sides will maintain the current spirit and attitude of advancing the negotiation and reach a relevant agreement as soon as possible, and said that "a strong agreement will be a strong statement that constructive engagement can produces result".

The EU-China Chamber of Commerce previously stated that some people in the market are encouraging foreign companies to take the initiative to "decouple" from China, but European companies are looking forward to further consolidating their positions and participating in the competition for market share. The conclusion of a strong China-EU investment agreement shows that deepening cooperation is still the best development path, which can also refute the international noise of "zero-sum game".

BBVA said that in the post-epidemic era, the China-EU investment agreement will be a "game-breaker", showing that countries in Europe and Asia have abandoned the Cold War mentality and are using economic and trade rules to seek closer relations. Under the new bilateral and multilateral trade and investment framework, promoting global recovery requires the persistence of all countries. (Wang Chutian)

Source: Economic Daily