EU-China Comprehensive Agreement on Investment
In addition, new restrictions are already envisaged, or new uncertainties are created. For example, China reserves the right to political leeway in deciding whether the senior management of non-profit organisations must be Chinese citizens in the future (Annex II, Entry 9). Among others, the part of the representative offices of the German business community in China that are registered there as non-governmental organisations could fall under this regulation. The BDI calls for clarification here. New restrictions on the representation of the interests of German and European trade associations in the world's second largest market must be ruled out. Overall, it must be noted that the demands of the industry, which were raised by BusinessEurope and the BDI in the initial phase of the negotiations, have only been met to a small extent. CAI is not an agreement with far-reaching market opening, the opening of the Chinese market for public contracts has not taken place and comprehensive investment protection could not be achieved between the EU and China. These unfinished tasks must remain a priority on the EU Commission's China agenda. It can be assumed that possible positive effects in the areas with improved market access will become apparent rather in the medium to long term for the companies that have already invested in China. The importance of China as an investment location remains high, most of the German companies that have already invested in China are planning further investments and assume a positive development of the Chinese market in their industry. However, it is not expected that new investments from Europe in China or, vice versa, Chinese investments in Europe will increase significantly due to the CAI. The commitments for China set out in the agreement concern only a small part of the manufacturing sector. To a much greater extent, access for European companies in the services sector was part of the negotiations for the first part of the agreement, which is now available.
China's market access commitments to the EU Automotive industry: In the automotive manufacturing sector, the abolition or phasing out of the joint venture requirement for all foreign manufacturers announced by China in 2018 is reaffirmed. This will be done in three steps: since 2018, vehicles with novel powertrains; since 2020, commercial vehicles with conventional powertrains; from 2022, passenger cars with conventional powertrains. With the CAI, China confirms increased market access in the area of new energy vehicles (NEVs, primarily e-cars), with the restriction that the investment must be more than USD 1 billion. The negative list, which has been further reduced in the meantime, has lifted the joint venture requirement for foreign companies in many sectors, 100 percent subsidiaries are increasingly possible, thanks to the 2018 announcement, now also in car manufacturing. However, the amount of investment to be made is high, so investments in this area will be limited to individual large-scale investments. For the automotive suppliers, which are also important from the perspective of German industry, the establishment of a WFOE (Wholly Foreign Owned Enterprise) has always been possible, and there were no restrictions on market access in China.
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