‘China must be open to EU investors’

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China must prove it will open its doors to European Union investors if the bloc is to consider a formal treaty setting out investment rules between the two trading powers, the EU's trade chief said on Tuesday.

“For the EU to engage further and consider a bilateral investment agreement, we need to be firmly convinced that this will produce real added value for EU companies, both in terms of access to the Chinese market and the way their investments are treated in China,” Trade Commissioner Karel De Gucht told a seminar on EU-China business relations.

The EU and China have been considering how to formalise rules governing investment flows between them, and top officials from both sides may raise the issue during meetings in the coming months.

China's growing investment into Europe - it tripled its foreign direct investment into the EU to 900 million euros in 2010, from 300 million euros in 2009 - has raised calls for the EU to negotiate formal investment rules. These could also include restrictions on Chinese acquisitions in strategically important sectors.

However, De Gucht rejected calls for formal vetting of Chinese acquisitions in Europe.

“I believe Europe's open investment regime remains our strongest argument for others to grant us similar access,” he told the seminar, which was attended by European executives and officials.

European investors complain that Chinese restrictions force them into collaborations with Chinese firms and do too little to protect EU interests.

European foreign direct investment into China contracted during to 4.9 billion euros in 2010, from 5.8 billion euros in 2009, according to EU figures.

New Chinese security measures that make investment into the country more difficult are “a retrograde step which risks further aggravating the detrimental effect on our bilateral trade,” De Gucht said.

A 2010 reform of the EU constitution foresees the bloc centralising investment decisions that until now have been governed by the bloc's 27 states individually. An EU-China investment agreement would be the first such stand-alone pact.

The United States has also been considering firming up investment rules through a treaty with China. - Reuters


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