The emergence of the novel coronavirus pneumonia in 2020, which brought the "black swan" to the world, has brought more adverse currents to economic globalization. The simultaneous contraction of Global trade investment scale and total economic output has aroused concern of all parties. The United Nations Conference on Trade and development called in the trade and development report 2020 that if there is no radical policy to reactivate trade and capital flows, the recovery and development resilience of the global economy will face enormous pressure.

This call has received a strong response by the end of 2020. Following the formal signing of the regional comprehensive economic partnership agreement (RCEP) on November 15, 2020, the leaders of China and the EU jointly announced on December 30 the completion of the China EU investment agreement negotiations on schedule, which undoubtedly injected strong momentum into the post epidemic global economic development.

This will effectively stabilize the economic, trade and investment cooperation between the two major economies in the world.

In recent years, China EU bilateral trade cooperation has been ahead of investment cooperation. In 2019, the EU will surpass the United States as China's largest trading partner. However, in the same year, the stock of EU's direct investment in China only accounted for 5.6% of China's foreign investment stock, and China's direct investment in the EU accounted for 4.3% of the total foreign investment stock.

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

Looking forward to the development trend of the world's major economies in 2021, major institutions are generally worried that inadequate policy support may delay the recovery process of the world's major economies. However, the breakthrough of China EU investment agreement provides more certainty for the global economy full of uncertainty.

From the perspective of the European Union, the American Asia Association believes that through this agreement, European enterprises have gained important business opportunities, especially important market access. In the foreseeable future, Europe will share the open dividend of China's financial services, electric vehicles, telecommunications and other fields. Previous research by the European Union China Chamber of Commerce shows that although the global economic growth has slowed down in recent years, European enterprises with business in China have made considerable profits. 39% of the members said their revenue increased by 20% year on year in 2019, and 11% said their business growth rate in China was even higher. Therefore, the European Union China Chamber of Commerce believes that there is unlimited potential in the Chinese market, and European enterprises hope to share the development dividend. The conclusion of the follow-up agreement will undoubtedly be conducive to the recovery of the EU economy after the epidemic.

Reuters believes that China has made breakthroughs in RCEP and the China EU investment agreement by the end of 2020, which on the one hand reflects China's determination and confidence in promoting high-level opening up, and on the other hand lays a good foundation for China to build a new development pattern. Spain's foreign bank 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 the medium and long-term development of China's economy. More EU enterprises will invest in the Chinese market and the policy agenda of the Chinese government's structural reform will further enhance the international competitiveness of Chinese enterprises.

In particular, it should be emphasized that the spirit of cooperation shown in the investment agreement between China and the EU is exactly what is urgently needed for the global economic recovery after the epidemic.

After the completion of the negotiations, European Union Chinese Chamber of Commerce President wooddock expressed the hope that the two sides would maintain the spirit and attitude of promoting the completion of the negotiations and reach relevant agreements as soon as possible, and said that "a strong agreement will be a strong statement, indicating that constructive contacts can produce results.".

The European Union China Chamber of Commerce has previously said that some people in the market encourage foreign-funded enterprises to take the initiative to "decouple" from China, but European enterprises are looking forward to further consolidating their position 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".

The Spanish bank for Foreign Affairs said that in the post epidemic era, the China EU investment agreement will be a "wrecker", showing that European and Asian countries 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 unremitting efforts of all countries. 

(Wang Chutian)

Source: Economic Daily