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External Publication

EU-China trade and investment relations in challenging times

In this report, we have focused on trade and investment relations and have not attempted to define the many other policy instruments that the EU can and should pursue to increase its leverage towards China, and to protect its domestic economy while boosting domestic investment and trade.

By: , , , , , , and Date: June 4, 2020 Topic: Global Economics & Governance

This study was prepared for the European Parliament’s Committee on International Trade (INTA). The study is available on the European Parliament’s online database, ‘ThinkTank‘. Copyright remains with the European Parliament at all times. 

This report examines key aspects of the European Union-China economic relationship, including trade, investment and China’s key strategic project overseas, the Belt and Road Initiative (BRI). We conclude that China is, and will continue to be, a major trade and investment partner for EU countries. In this context, it seems clear that regardless of the direction of the United States-China relationship, the EU needs to explore options for fruitful co-existence with China.

Trade continues to be the least problematic aspect of the EU-China economic relationship, although challenges need to be dealt with in a number of areas. There is hardly any EU-China trade in services, and the value added of Chinese exports and competition on third markets is increasing. As for investment, although EU companies have built up more foreign direct investment in China than the other way around, Chinese investment in Europe is growing and has focused strongly on technology. This raises the question of whether the EU should fear losing its technological edge, especially when Chinese state-owned companies might distort competition, not only in China, but also overseas through acquisitions.

Finally, we review the significance of the BRI from the European perspective. The BRI offers potential trade gains for Europe by improving physical connectivity with countries along the route to China, but it also poses challenges for the EU. The main challenge is China’s increasing soft power, which is being felt in the EU’s neighbourhood and even in a growing number of EU countries. A more united approach to managing the EU-China economic relationship is required to improve the bargaining power of EU countries when dealing with China.

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Opinion

Will COVID accelerate productivity growth?

The COVID-19 pandemic has prompted an increasing number of rich-country firms to reduce their reliance on global supply chains and invest more in robots at home. But it is probably too soon to tell whether this switch will increase productivity growth in advanced economies.

By: Dalia Marin Topic: European Macroeconomics & Governance, Global Economics & Governance Date: February 10, 2021
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Past Event

Past Event

Carbon Border Adjustment Mechanism: Greening the EU trade?

Assessing CBAM from a trade perspective.

Speakers: Suman Bery, Luis Garicano, Emily Lydgate and André Sapir Topic: Energy & Climate, Global Economics & Governance Date: February 4, 2021
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Past Event

Past Event

The geopolitics of the Green Deal

Join us to mark the launch of the eponymous paper co-written with the European Council on Foreign Relations.

Speakers: Stefano Grassi, Mark Leonard, Simone Tagliapietra, Jennifer Tollmann, Marc Vanheukelen and Guntram B. Wolff Topic: Energy & Climate Date: February 3, 2021
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External Publication

China and the WTO: Why Multilateralism Still Matters

An examination of China’s participation in the World Trade Organization, the conflicts it has caused, and how WTO reforms could ease them.

By: Petros C. Mavroidis and André Sapir Topic: Global Economics & Governance Date: January 28, 2021
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External Publication

Getting America Back In The Game: A Multilateral Perspective

How can friends of the multilateral system re-engage the United States under President-elect Biden?

By: Richard E. Baldwin, Chad P. Bown, Jonathan T. Fried, Anabel González, André Sapir and Tetsuya Watanabe Topic: Global Economics & Governance Date: January 28, 2021
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Podcast

Podcast

A rushed deal or a rush to judgement?

The Comprehensive Agreement on Investment (CAI) is supposed to improve market access for European companies operating in China and to ensure a level playing field, as well as reciprocity. Does it fulfil such expectations?

By: The Sound of Economics Topic: Global Economics & Governance Date: January 27, 2021
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Opinion

RCEP對亞洲影響積極,無阻價值鏈重組

總體而言,雖然RCEP成員之間在市場准入上實際提升幅度有限(例如中國和澳洲),但這一協定的意義在於讓世界意識到,亞洲仍然依賴中國市場,亞洲國家不能錯過中國放寬市場准入的機會,即使幅度有限。

By: Alicia García-Herrero Topic: Global Economics & Governance Date: January 21, 2021
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Opinion

An EU - China investment deal: a second look

For the moment, it does not look like we have the basis for greater and deeper economic relations with China. However, dismissing China and the opportunities that it creates for global cooperation would also be a mistake.

By: Maria Demertzis Topic: Global Economics & Governance Date: January 19, 2021
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Opinion

Résilience : la nouvelle boussole

Pour surmonter le choc de la pandémie de Covid-19, l’économiste écarte, dans sa chronique, l’idée d’un repli protectionniste, mais suggère de passer d’un objectif de réduction des coûts à celui de la réduction des risques.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: January 18, 2021
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Blog Post

The double irony of the new UK-EU trade relationship

The Trade and Cooperation Agreement signed between the European Union and the United Kingdom goes against six decades of UK efforts to avoid being economically disadvantaged in Europe. Tracking the evolution of the EU-UK relationship over the last 60 years can help in understanding this.

By: André Sapir Topic: European Macroeconomics & Governance Date: January 12, 2021
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Opinion

Europe's disappointing investment deal with China

Why rush a deal that is so inherently complex?

By: Alicia García-Herrero Topic: Global Economics & Governance Date: January 4, 2021
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Policy Contribution

Deglobalisation in the context of United States-China decoupling

After decades of increasing globalisation, there now seems to be a slowing, or even a turn to deglobalisation, meaning decelerating trade and investment and reduced global value chains. This trend seems to have accelerated because of the United States’ push to contain China in the context of their strategic competition. So far, however, there is less evidence of deglobalisation in terms of financial flows.

By: Alicia García-Herrero and Junyun Tan Topic: Global Economics & Governance Date: December 21, 2020
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