As negotiations continued on an EU-China BIT, competition intensified between member states to attract Chinese investment.
Europe remained a prime destination for Chinese outward investment in 2014. There were a number of big deals involving Chinese companies: large investments in Portugal’s and Italy’s financial sectors; continued investment in the French and British energy sectors, including the nuclear plant at Hinkley Point in the UK; and Dongfeng’s acquisition of 14 percent of French carmaker PSA Peugeot Citroën. These deals were probably encouraged by increased efforts by – and competition between – member state governments to attract Chinese companies and investment and to develop economic relations with China. For example, competition was intense between London, Frankfurt, Luxembourg, and Paris to obtain RMB offshore trading agreements from China.
At the EU level, investment was also high on the agenda, as three negotiation rounds for the EU-China BIT took place in January, March, and June. The EU aims to negotiate a “new generation” BIT, which will include not only investment protection but also other components, such as market access, rules on the role of state-owned enterprises, and sustainable development. However, many member states, such as the UK, continue to prioritise bilateral trade relations with China.
Meanwhile, the environment for European businesses in China has deteriorated. Not only is there a lack of fairness and transparency, as the EU pointed out in its statement on China’s Fifth Trade Policy Review in July, but European companies have also been the targets of anti-monopoly investigations by the Chinese government, which the EU Chamber of Commerce has denounced as discriminatory. While the EU Chamber of Commerce has lobbied on this issue, little seems to have been done at EU or member state level.
The European Commission and China reached an amicable settlement on the telecoms case over alleged illegal Chinese subsidies to Huawei and ZTE in October and an agreement was reached between the European and Chinese wine industries that put an end to China's anti-dumping and anti-subsidy cases. No EU-China High-Level Economic and Trade Dialogue meeting was held in 2014.
