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News

Beyond the horizon: EU-China trade and investment

July 2, 2020

The pandemic will not ‘reverse globalisation’, but inevitably, major powers will have to re-evaluate their approach to certain key sectors, writes HCSS expert Richard Ghiasy for Friends of Europe. 

The third decade of the new millennium has begun with incomparable global tumult. Will this impact the long-pending EU-China Comprehensive Agreement on Investment (CAI)? And, will the two parties reach the end of the decade with as much interest in mutual trade and investment as they express today?

Although COVID-19 restrictions will likely delay the CAI timeline to some degree, the need for this agreement is more urgent than ever. In most countries, the pandemic’s peak is —gradually and tentatively — nearing, nonetheless it has caused major setbacks for global trade. Boosters to the economy are even more welcome than before, be it in China or the EU.

However, since the pandemic hit Europe in early 2020, the EU may have developed different views on how to run and protect (sub)industries that are deemed strategic.

This does not mean the pandemic will somehow ‘reverse globalisation’. On the contrary, EU-China trade and investment relations will continue to boom. There should be no doubt about that. Yet, the pandemic has exposed, among other things, the strategic need for indigenous supply chains of pharmaceutical and medical supplies. Inevitably, major powers will have to re-evaluate their approach to certain key sectors. Trade and investment will open up for less strategic industries yet become much more select and protective for strategic sectors.

Read the full article here. 

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Experts

Richard Ghiasy

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