Heading in the right direction

Chinese Vice-Premier Ma Kai (left), Vice-President of the European Commission in charge of Economic and Monetary Affairs, Olli Rehn (center), and European Commissioner for Trade, Karel De Gucht, during a news conference at the European Commission headquarters in Brussels, Belgium, on Oct 24. Provided for China Daily

China-EU investment agreement talks to pave the way for better bilateral trade

Though strategic partnerships will be the main focus of the China-EU summit that begins on Nov 21 in Beijing, expectations are rife that the two sides will eventually sign an investment agreement that aims among other things to reduce the simmering trade tensions.

According to experts, this China-EU summit is of "special importance" as it will set the tone for future bilateral engagements. Free trade negotiations between China and the EU had not made much progress in the past, as Brussels has yet to grant market economy status to Beijing.

From a European perspective, the current summit is also a rare opportunity to study and observe the new Chinese leadership, especially after the just-concluded Third Plenary Session of the 18th CPC Central Committee.

"I hope this summit is more of a consolidation effort and less of conflict," says Glyn Ford, a five-time former member of the European Parliament. "The European side will be getting to know the new Chinese leadership from close quarters and there will be incremental, rather than radical, moves in political and economic relations."

The two sides are also expected to discuss trade and investment, human rights, innovation, urbanization, rule of law, people-to-people exchanges, and defense and security at the meeting. Discussions will also center on respective domestic situations and other major global issues such as G20 cooperation.

Jonathan Holslag, a researcher at the Brussels Institute of Contemporary China Studies, says that though the upcoming summit, the highest political dialogue platform since 1998, is of importance, nothing new seems to be on the horizon.

China sent an exhibition group second only in size to Germany for the CeBIT 2013 tech fair in Hanover in April. Provided to China Daily

"The main objective is to get acquainted with the new leadership in China and to probe its priorities toward Europe," Holslag says. "Obviously, special attention will go to trade relations and the investment treaty."

Holslag says it is clear that China considers good relations with Europe a top priority. "Trade relations have normalized somewhat, but it remains to be seen whether the investment treaty will signal a new era in economic partnership," he says.

"Both China and Europe are in the process of diversifying their partnership, something that reflects the increasingly complicated global order."

Bernard Dewit, president of the Brussels-based Belgian-Chinese Chamber of Commerce, says the summit illustrates the need for dialogue between the two sides, especially as the economies are becoming more interdependent. He says the EU is China's biggest trading partner, while China is the EU's largest source of imports.

Beyond the investment agreement negotiations, Dewit hopes that both sides will agree on the feasibility studies for a free trade agreement. The FTA is expected to help Chinese and European companies to invest in and access each other's markets.

"The new Chinese leadership is clearly willing to reinforce the EU-China strategic leadership and has recognized the importance of the EU in the global economy," Dewit says. "On the other hand, the EU is also serious about deepening its political and economic ties with China."

Christopher Dent, professor of East Asia's International Political Economy at University of Leeds in the UK, says that future Sino-EU ties will hinge on closely inter-related issues like energy, resources and climate change.

"Both sides face stiff challenges on these fronts, challenges that will only become more critically important over time," Dent says.