By Stewart Paterson
The EU-China Comprehensive Agreement on Investment (CAI) was concluded in principle on 30 December 2020 after seven years of negotiation. It is perhaps a one-of-a-kind deal aimed at balancing the existing asymmetric investment relationship, where Chinese companies enjoy a far greater freedom to invest in Europe than EU companies do in China. But would it be able to achieve its stated goals?
This essay by Stewart Paterson, Research Fellow at the Hinrich Foundation, explores the background to the CAI, the EU’s economic relationship with China, and the prospect of CAI rebalancing and deepening EU-China trade ties. Given past economic interaction with China and the country’s recent geopolitical moves, Paterson poses the challenging question of whether deeper economic linkages with China are sustainable or compatible.