'EU signal needed' for investment agreement

EU Trade Commissioner Karel De Gucht said a week ago that while the EU-China investment relationship needed further strengthening, it was a fundamental source of mutual benefit.

"We need to work together to build an economic relationship that is more than the sum of its parts, a relationship that drives growth at home and contributes to growth in the world economy at large," he said in a speech.

De Gucht said the investment agreement was a project that he had high hopes for, but he made no mention of when talks would start.

But he said that there was considerable room for growth in EU-China investment, noting that Europe's investment in China added up to less than 2 percent of its total investments abroad.

"In comparison, 30 percent of our investment stocks are in the United States. China's investments in Europe, while growing, still account for less than 1 percent of total foreign direct investment here. In comparison, 20 percent is American," De Gucht said.

He said bilateral investment would benefit both sides as European investors would have better access to the Chinese market and their Chinese counterparts would be more encouraged to invest in Europe.

"Companies operating in both Europe and China would be able to operate on a more level playing field, no matter what their origin or ownership structures," said De Gucht.

Wolfgang Pape, senior fellow of the Brussels-based Center for European Policy Studies, said that both sides need an investment agreement to protect the interests of investors.

"The agreement will be reached sooner or later as our relationship is so close and important," said Pape. "I also think there will be a possibility of a free trade agreement in the long term between China and the EU."

But Pape said that both sides should go beyond bilateral trade and investment relations to work at the global level for better governance.

"When you have a global agreement for everybody, everybody has the ... same rules to follow."

Li Xiaofei in Brussels contributed to this story.