key facts and figures - europa

EU-CHINA COMPREHENSIVE AGREEMENT ON INVESTMENTKEY FACTS AND FIGURES

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2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

*

Cumulative EU FDITransactions in ChinaCumulative Chinese FDITransactions in the EU

THE EU-CHINA COMPREHENSIVE AGREEMENT ON INVESTMENT

KEY FACTS AND FIGURES


China’s economy

China’s economy is now comparable to the EU’s in size. China’s market is ten times what it was in 2000 and fortytimes what it was in 1990. In the last 10 years, it has grown faster than any other major country and it hascontributed to more than 50% of the global growth.

Source: Eurostat and World Bank (2019)

As China continues catching up with more advanced economies, it will contribute to almost 30% of global growthin the next five years and is likely to become the world’s largest economy by the end of the decade.

The Agreement establishes rules for bilateral investment between two of the world’s three largest economies.

EU-China economic relations

EU-China trade ties are the most developed. The EU is the first destination for Chinese exports. China is the EU’sthird largest trade partner and the third destination for EU exports (after the US and the UK).

Source: Eurostat 2019 for goods, Eurostat 2018 for service Source: Rhodium Group

14 000 12 800

19 100

0

5 000

10 000

15 000

20 000

25 000

EU China US

GDP (billion EUR)

Bilateral FDI EU27 2000-2020 (Billion EUR)

0100200300400500600700

Goods Services Goods Services Goods Services

China US UK

EU bilateral trade in goods and services (billion EUR)


CHINA’S ECONOMY

China’s economy is now comparable to the EU’s in size. China’s market is ten times what it was in 2000 and forty times what it was in 1990. In the last 10 years, it has grown faster than any other major country and it has contributed to more than 50% of global growth.

As China continues catching up with more advanced economies, it will contribute to almost 30% of global growth in the next five years and is likely to become the world’s largest economy by the end of the decade.

� The Agreement establishes rules for bilateral investment between two of the world’s three largest economies.

EU-CHINA ECONOMIC RELATIONS

The EU is the first destination for Chinese exports. China is the EU’s third largest trade partner and the third destination for EU exports (after the US and the UK).

wTHE EU-CHINA COMPREHENSIVE AGREEMENT ON INVESTMENT



China’s economy

China’s economy is now comparable to the EU’s in size. China’s market is ten times what it was in 2000 and fortytimes what it was in 1990. In the last 10 years, it has grown faster than any other major country and it has contributed to more than 50% of the global growth.

Source: Eurostat and World Bank (2019)

As China continues catching up with more advanced economies, it will contribute to almost 30% of global growthin the next five years and is likely to become the world’s largest economy by the end of the decade.

The Agreement establishes rules for bilateral investment between two of the world’s three largest economies.

EU-China economic relations

EU-China trade ties are the most developed. The EU is the first destination for Chinese exports. China is the EU’sthird largest trade partner and the third destination for EU exports (after the US and the UK).

Source: Eurostat (2019) Source: Eurostat (2018)

14 000 12 800

19 100

0

5 000

10 000

15 000

20 000

25 000

EU China US

GDP (billion EUR)

0

50

100

150

200

250

EU exports EU imports EU exports EU imports EU exports EU imports

China US UK

Trade in services 2018 (billion EUR)

0

100

200

300

400

500

EU exports EU imports EU exports EU imports EU exports EU imports

China US UK

Trade in goods 2019 (billion EUR)

EU-CHINA COMPREHENSIVE AGREEMENT ON INVESTMENT

Starting from very lows levels, bilateral investment has increased significantly over the last ten years: Between 2000 and 2020, EU companies invested some 148 billion EUR in China and Chinese companies some 117 billion inthe EU.

EU27 FDI in China by sector 2000-2020

Source: Rhodium Group Source: Rhodium Group

Data represents the combined value of direct investment transactions by EU-27 companies, including greenfield projects and acquisitions thatresult in significant ownership control (>10% of equity).

China FDI in EU27 by sector 2000-2020

Source: Rhodium Group


19.7

17.7

16.1

12.58.2

8.8

8.7

7.1

54.7

3.93.7

2.3 0.5

AutomotiveTransport And InfrastructureICTIndustrial Machinery And EquipmentEnergyConsumer Products And ServicesReal Estate And Hospitality

41.7

29.211.2

11.8

9.4

7.8

7.2

6.74.4

4.0

2.8

Automotive Basic MaterialsFinancial and Business Services Agriculture and FoodConsumer Products and Services EnergyIndustrial Machinery and Equipment Health and BiotechICT ElectronicsReal Estate and Hospitality Transport and InfrastructureAviation Entertainment

Starting from very low levels, bilateral investment has increased significantly over the last ten years. Between 2000 and 2020, EU companies invested some 148 billion EUR in China and Chinese companies some 117 billion EUR in the EU.








19.7

17.7

16.1

12.58.2

8.8

8.7

7.1

54.7

3.93.7

2.3 0.5


41.7

29.211.2

11.8

9.4

7.8

7.2

6.74.4

4.0

2.8









19.7

17.7

16.1

12.58.2

8.8

8.7

7.1

54.7

3.93.7

2.3 0.5


41.7

29.211.2

11.8

9.4

7.8

7.2

6.74.4

4.0

2.8









19.7

17.7

16.1

12.58.2

8.8

8.7

7.1

54.7

3.93.7

2.3 0.5

AutomotiveTransport and InfrastructureICTIndustrial M achinery and equipmentEnergyConsumer Products and ServicesReal Estate and Hospitality

41.7

29.211.2

11.8

9.4

7.8

7.2

6.74.4

4.0

2.8





Data represents the combined value of direct investment transactions by EU-27 companies, including greenfield projects and acquisitions that result in significant ownership control (>10% of equity).




19.7

17.7

16.1

12.58.2

8.8

8.7

7.1

54.7

3.93.7

2.3 0.5


41.7

29.211.2

11.8

9.4

7.8

7.2

6.74.4

4.0

2.8


in billions of EUR

in billions of EUR

@Trade_EU #EU

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EU-CHINA COMPREHENSIVE AGREEMENT ON INVESTMENT

KEY ISSUES IN EU-CHINA INVESTMENT AND HOW THE AGREEMENT ADDRESSES THEM

While trade volumes between the EU and China are comparable to those between the EU and the US, bilateral investment volumes remain lower by a factor of about 15.

� Investment is an aspect of the bilateral economic relationship that remains relatively underdeveloped.

� About half of EU FDI to China goes into the manufacturing sector, highlighting the importance of establishing a rules-based relationship with China in this area.

� Financial services, business services and health services are significant for EU FDI in China.

� Bilateral FDI is widely spread across Member States and is broadly in line with the size of their respective economies.

The Agreement will rebalance bilateral investment conditions by legally binding China’s current and future levels of openness, removing joint-venture requirements and lowering equity caps in some sectors.

China’s restrictions to foreign investment in the form of outright prohibition, joint-venture requirements, equity caps or authorisation regimes remain the highest in the world. They are higher than in the EU in all sectors of the economy, with particularly large differences in telecoms and financial services.

The Agreement will prohibit forced technology transfers.

Forced technology transfers are a major issue for European companies investing in China. Overall, one out of six EU companies has felt compelled to transfer technology in order to maintain market access but the figure is as high as one out of three in the most innovative sectors (medical devices, aerospace and aviation, environment).


While trade volumes between the EU and China are comparable to those between EU and the US, bilateralinvestment volumes remain lower by a factor of about 15.

Investment is an aspect of the bilateral economic relationship that remains relatively underdeveloped. About half of EU FDI to China goes into manufacturing sector, highlighting the importance of establishing

rules-based relationship with China in this area. Financial services, business services and health services are significant for EU FDI in China. Bilateral FDI is widely spread across Member States and is broadly in line with the size of their respective

economies.

China’s restrictions to foreign investment in the form of outright prohibition, joint-venture requirements, equitycaps or authorisation regimes remain the highest in the world. They are higher than in the EU in all sectors of theeconomy, with particularly large differences in telecoms and financial services.

Source: OECD (2019)

The Agreement will rebalance bilateral investment conditions by legally binding China’s current and futurelevel of openness, and removing joint-venture requirements and lowering equity caps in some sector.

Forced technology transfers are a major issue for European companies investing in China: Overall, one out of sixEU companies has felt compelled to transfer technology in order to maintain market access but the figure is ashigh as one out of three in the most innovative sectors (medical devices, aerospace and aviation, environment).

Source: EUCCC 2020 Business Confidence Survey

00.05

0.10.15

0.20.25

0.3

OECD's FDI restrictiveness index 2019

16%

24%19%

24%29% 29%

0%5%

10%15%20%25%30%35%

AVERAGE AUTO IT AND TELECOM TRANSPORTATION,LOGISTICS ANDDISTRIBUTION

AEROSPACE ANDAVIATION

ENVIRONMENT

Tech transfer rate per industry 2020


While trade volumes between the EU and China are comparable to those between EU and the US, bilateralinvestment volumes remain lower by a factor of about 15.

Investment is an aspect of the bilateral economic relationship that remains relatively underdeveloped. About half of EU FDI to China goes into manufacturing sector, highlighting the importance of establishing

rules-based relationship with China in this area. Financial services, business services and health services are significant for EU FDI in China. Bilateral FDI is widely spread across Member States and is broadly in line with the size of their respective

economies.

China’s restrictions to foreign investment in the form of outright prohibition, joint-venture requirements, equitycaps or authorisation regimes remain the highest in the world. They are higher than in the EU in all sectors of theeconomy, with particularly large differences in telecoms and financial services.

Source: OECD (2019)

The Agreement will rebalance bilateral investment conditions by legally binding China’s current and futurelevel of openness, and removing joint-venture requirements and lowering equity caps in some sector.

Forced technology transfers are a major issue for European companies investing in China: Overall, one out of sixEU companies has felt compelled to transfer technology in order to maintain market access but the figure is ashigh as one out of three in the most innovative sectors (medical devices, aerospace and aviation, environment).

Source: EUCCC 2020 Business Confidence Survey

00.05

0.10.15

0.20.25

0.3

OECD's FDI restrictiveness index 2019

16%

24%19%

24%29% 29%

0%5%

10%15%20%25%30%35%

AVERAGE AUTO IT AND TELECOM TRANSPORTATION, LOGISTICS AND DISTRIBUTION

AEROSPACE AND AVIATION

ENVIRONMENT

Tech transfer rate per industry 2020

CAI seeks to discipline the behaviour of State owned enterprises (SOEs) by requiring them to act in accordance with commercial considerations and not to discriminate in their purchases and sales of goods or services.

EU investors also often suffer from the unfair behaviour of Chinese SOEs, which make up about 40% of the Chinese economy. Out of China’s ten largest companies, nine are SOEs and Chinese SOEs in China account for about three-quarters of all SOEs present on the Fortune Global 500 list of largest companies by turnover. They are particularly dominant in key sectors such as banking, transport and telecoms, so that EU investors are bound to interact with them either as suppliers or as customers.

Source: Fortune Global 500 (2020)

407 009

383 906

379 130

205 839

184 280

177 069

158 884

147 313

135 091

131 244China Life Insurance (insurance)

Bank of China (bank)

Agricultural Bank of China (bank)

China Construction Bank (bank)

Industrial & Commercial Bank of China (bank)

Ping An Insurance (insurance)

China State Construction Engineering (construction)

China National Petroleum (oil)

State Grid (electricity)

Sinopec Group (oil)

10 largest companies by revenue 2020 (million USD)

State-owned company

Private company

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